Getty ImagesA strong dollar makes drinks cheaper at St. Mark's Square Square in Venice, Italy.By Chris Taylor
Jane McManus can hardly believe her luck. The New York-based sportswriter for ESPN.com is planning a summer vacation with her family in Ireland.
Following the strength of the U.S. dollar, McManus upgraded their travel plans, reserving a swankier hotel room in Dublin and booking a couple of days at a 13th-century castle. The overall cost will be about 30 percent less than last summer's vacation to Italy when the dollar was much weaker, McManus estimates. "Wow, it's so different," she marvels.
With the dollar near parity with the euro, airfares to Paris are down 14 percent from a year ago, according to popular travel site Orbitz. Hotel rates have sunk 10 percent from last year. London, Rome and Barcelona are among other popular locales with cheaper hotels and airfares than last year, according to Orbitz data. The Points Guy Brian Kelly also singles out Japan, thanks to the weak yen; Finland, the only Scandinavian country to use the euro; and South Africa, whose currency has sunk by almost half over the last few years.
You do not have to leave North America to feel the impact. Canada's currency has slumped to around 80 cents on the dollar. As a result, travel trends are already shifting: International air traffic for U.S. citizens in January was up 7.2 percent over the previous year, according to the National Travel & Tourism Office.
Of course, it is still only March. Currency markets are famously volatile and could turn at any moment. That is why some travelers are wondering how to lock in these favorable exchange rates, and make sure that they are able to see Europe or Canada or Mexico on the cheap.
What You Can Do
Prepay at current rates -- your flights, hotel rooms and excursions. "Hotels that used to be $160 a night in U.S. dollars are now $130," says Carl O'Donnell, 23, a New York-based reporter for Mergermarket who is planning a summer jaunt with his girlfriend to historic French-Canadian Quebec City. He is thinking about locking in some prices now. O'Donnell is tacking on additional days to their trip, and adding pricey excursions like boat rides. "It feels great to be getting a big discount," he says.
Hedge your cash needs with a foreign-currency bank account. Florida-based EverBank offers a variety, ranging from the Indian rupee to the Chinese renminbi, that you buy at today's rates to hold and spend later. "Usually, most of our clients are investors," says Chris Gaffney, president of world markets for EverBank. "But recently, with the euro hitting multi-year lows, we have seen more people coming to us to lock in travel-related expenses." EverBank's foreign-currency deposit accounts do not charge monthly fees, but they do require a $2,500 minimum. Before you depart, Gaffney suggests buying a bank draft, or having the money wired overseas, so you do not have to convert cash back and forth (and get hit with fees both ways).
Secure traveler's checks now or load some money onto a prepaid card like the Travelex Cash Passport. That comes with a card-purchase fee and foreign ATM withdrawal fees at about $2.50 a pop. You can even buy a few euros at your local bank to spend later, although you have no consumer protections if that cash gets lost or stolen.
Do not blow any exchange-rate windfall by using the wrong credit card, though. With every $100 trinket you buy, you might be getting knocked another $2 or $3 for foreign transaction fees without even realizing it. One card Matt Schulz, senior industry analyst for CreditCards.com, likes: Barclays Arrival Plus World Elite MasterCard, which has no foreign transaction fees.
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There were plenty of winners and losers this week, with the world's largest cruise line operator ordering new ships and the leading taco maker killing off a defining breakfast item.
The world's largest cruise line operator is about to get bigger: Carnival has placed an order for nine cruise ships that will start to be delivered in 2019.
It's important for Carnival to continue to enhance its fleet across several cruise line brands. It may have scored record revenue in its most recent fiscal year, but profitability peaked four years earlier. Carnival's namesake line needs to keep up with its better-reviewed rivals if it wants to charge as much as the competition. New ships help.
Waffle Taco -- Loser
The Waffle Taco is toast. It's been a year since Yum! Brands' (YUM) Taco Bell threw its sombrero into the breakfast ring, but the signature menu item that many associated with the chain's play for morning commuters won't be around for a sophomore year.
Yum! Brands nixed the Waffle Taco, replacing it with the Biscuit Taco and a new boneless chicken that's breaded in tortilla chips. The additions are certainly welcome, and the early reviews are favorable. However, Taco Bell didn't have to kill off its taco-shaped waffle sandwich. It drew attention, and that's something that can't be said now with many burger chains offering biscuit sandwiches for breakfast. It didn't have to kill one product just to add another, and it finds Taco Bell now scrambling to make the A.M. Crunchwrap its signature offering
Analysts are warming up to the market darling in digital streaming. Cantor and Barclays boosted their price targets on Netflix by $50 apiece, with Cantor pushing its goal to $500 and Barclays now perched at $400.
It's been a good week for Netflix, as the premium streaming video service that's expected to have more than 60 million global subscribers by month's end also made its first foray into Asia-Pacific this week by launching its platform in Australia and New Zealand on Tuesday.
It was a rough holiday quarter for Winnebago. The RV maker posted uninspiring financial results this week with profitability declining to 30 cents a share after ringing up 35 cents a share a year earlier. Analysts were holding out for a small increase. Winnebago's revenue also climbed a mere 3 percent, well short of the 11 percent surge that Wall Street was forecasting.
This should be a great time for the RV industry. Gas prices are low, making a rolling house a more viable investment. We're also seeing encouraging growth in the economy and travel industries, making it a bigger shock to see Winnebago fall woefully short of expectations.
The leading social networking website operator hosted its annual F8 powwow for developers, and there were plenty of intriguing announcements including new programs and news on the consumer rollout of its Oculus Rift virtual reality gear.
The nugget that has generated the most interest on Wall Street is that its Messenger platform will be opened up for third parties. There have already been dozens of applications built by bigwig developers. One application would allow Facebook users to interact with online retailers after purchases to communicate and track orders, potentially reinventing e-commerce. A lot of Facebook's monetization these days originated from developments announced at F8, and there's plenty of meat this time around.
Motley Fool contributor Rick Munarriz owns shares of Netflix. The Motley Fool recommends and owns shares of Facebook and Netflix. 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.
Charlie Riedel/APWorkers on the Ford F-150 assembly line at its plant in Claycomo, Mo.By Lucia Mutikani
WASHINGTON -- U.S. economic growth cooled in the fourth quarter as previously reported and after-tax corporate profits took a hit from a strong dollar, which could undermine future business spending.
Gross domestic product expanded at a 2.2 percent annual rate, the Commerce Department said Friday in its third estimate of GDP. That was unrevised from the forecast the government published last month.
Businesses throttled back on inventory and equipment investment, but robust consumer spending limited the slowdown in the pace of activity. The economy grew at a 5 percent rate in the third quarter.
Slower profit growth could mean slower investment in the coming months.
After-tax corporate profits declined at a 1.6 percent rate last quarter after increasing at a 4.7 percent pace in the third quarter. Corporate profits from outside the United States fell at an 8.8 percent rate, the steepest decline since the 2007-2009 recession.
"Slower profit growth could mean slower investment in the coming months," said Thomas Costerg, an economist at Standard Chartered in New York.
Multinationals such as technology giant IBM (IBM), semiconductor maker Intel (INTC), industrial conglomerate Honeywell (HON) and Procter & Gamble (PG), the world's largest household products maker, have warned that the dollar will hurt their profits this year.
The dollar gained 7.8 percent against the currencies of the main U.S. trading partners between June and December.
For all of 2014, after-tax corporate profits fell 8.3 percent, the largest annual drop since 2008.
Economists had expected fourth-quarter GDP growth would be revised up to a 2.4 percent rate and after-tax corporate profits would rise at a 1 percent pace.
U.S. stocks were trading marginally higher, as investors bet that the weak growth data would delay a Federal Reserve interest rate increase until later in 2015. The dollar dipped against a basket of currencies, while prices for U.S. Treasuries rose.
Dollar Headwind
A separate report showed consumer sentiment slipped in March, adding to signs that the moderate pace of economic expansion persisted through the first quarter.
The University of Michigan said its consumer sentiment index fell to 93 this month from a reading of 95.4 in February.
The sturdy dollar, lingering weakness in Europe and Asia, harsh winter weather in the United States and a now-settled labor dispute at busy U.S. West Coast ports dampened activity in the first two months of the year.
With temperatures rising, there are signs of some pick-up in activity. But the dollar will likely provide a challenge for domestic manufacturers. First-quarter growth estimates range between a 0.9 percent and 1.4 percent rate.
"The impact of dollar strength and energy price declines may prove too much for GDP to hit the long-awaited 3 percent threshold in 2015, leaving another year of mid-2 percent growth in its wake," said Jay Morelock, an economist at FTN Financial in New York.
Business Inventories
Businesses accumulated $80 billion worth of inventory in the fourth quarter, less than the $88.4 billion the government had estimated last month.
As a result, inventories subtracted 0.10 percentage point from GDP growth in the fourth quarter. Restocking was previously reported to have added 0.1 percentage point to output.
The weak pace of restocking, however, removes the threat of an inventory overhang, giving businesses scope to place more orders for goods, which should help to stimulate manufacturing.
Business investment on equipment was revised to show it rising at a 0.6 percent rate instead of the previously reported 0.9 percent pace, likely reflecting the impact of the strong dollar and lower crude oil prices, which have caused a drop in drilling and exploration activity.
But consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased at a 4.4 percent rate in the fourth quarter instead of the 4.2 percent rate reported last month. It was the fastest pace since the first quarter of 2006.
Consumer spending, however, moderated early in the first quarter as cold and snowy weather kept shoppers at home. Households also appear to have opted to save the bulk of their savings from lower gasoline prices.
Despite slower global demand, export growth was revised higher. But with consumer spending so strong, more imports than previously estimated flowed into the country, resulting in a trade deficit that weighed on GDP growth.
Trade lopped off 1.03 percentage points instead of the 1.15 points reported last month.
-With additional reporting by Richard Leong in New York.
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After years of study and many reports, the Consumer Financial Protection Bureau this week proposed sweeping changes to the payday lending industry. The bureau has three basic concerns:
It believes that payday lenders do not underwrite borrowers before extending credit. These loans typically come with no credit checks, no verification of income and no analysis of their cash flow. In fact, payday lenders are acutely aware that if such an assessment were completed, most borrowers would fail because they cannot afford the loan.
The products are structured to be a debt trap. Most payday loans do not amortize. Instead, you pay a fee, which is typically $15 to $20 for every $100 you borrow for two weeks. At the end of two week, you have a choice. You can either repay the whole amount, in the form of a balloon payment, or you can extend by paying the fee. Given that product structure, most people extend. According to the bureau, 50 percent of borrower choose to extend the loan, and nearly 20 percent of borrowers end up extending more than seven times. By doing this, they get stuck in a very expensive debt trap.
Payday lenders are incredibly aggressive collectors. But the image of collectors with baseball bats is outdated. Instead, payday lenders are extremely aggressive with payment technology. As many as five times a day, they are debiting customers accounts, trying to find every dollar possible. Not only does this make it difficult for borrowers to manage their limited cash flow, but it also exposes them to overdraft and insufficient funds fees. At large banks, every incident can result in a $35 fee. So, if a payday lender tries to take a payment a few times in a day, it could result in over $100 of fees at the bank.
Underwrite or Cap Your Rate
The CFPB is giving lenders a choice. They can focus on prevention or protection. If a payday lender is willing to do a full underwriting of its borrower, which means a verification of income and a cash flow analysis, then no other major changes are required. This is a bit of a false choice. The CFPB knows quite well that most borrowers would fail a true affordability test.
The second option effectively amounts to a rate cap. For short-term loans (of less than 45 days), the CFPB would not allow lenders to make more than three consecutive loans. In other words, this limits the number of rollovers. It would also require that the principal balance goes down over time, rather than up. By forcing loans to become amortizing and payable, they are effectively driving down the price of the loans.
For longer-term loans (greater than 45 days), the CFPB is proposing an explicit rate cap of 28 percent. But it is weighing that against a limit on the monthly payment so that it is not more than 5 percent of the borrowers' monthly income.
But Will It Work?
Payday lenders have such high margins because short-term payday loans today are effectively interest-only loans that never get paid off. Longer term title loans have interest rates well above 28 percent. The CFPB is giving the lenders a choice: you can either underwrite the borrowers, or cut your costs.
The CFPB has proposed actions to limit the abuse of the payment system. It wants any lender to give notice to customers three days before money is deducted from their account. This will help borrowers avoid the surprise. But the bigger change requires that if a lender makes two unsuccessful attempts at taking a payment, they can not make a third attempt unless the borrower gives permission. This is a massive change.
Payday lenders are very good at working through the loopholes of laws. As these guidelines are transformed into rules, there will be thousands of lawyers figuring out ways around them.
Lenders have a choice here. And the most ambiguous part of that choice is around affordability. For years, lenders have been able to document proof of affordability when it doesn't exist. That is my biggest fear with the proposed rule.
The payday industry is long overdue for change. The need for short-term borrowing will always be there. But we can't have an industry that has designed products whose sole purpose is to trap people in debt, rather than to make a decent return and provide a service.
What Can I Do?
If you have debt that you cannot afford to pay off, you need to take time to build a plan to get debt free, rather than going from payday loan to payday loan. A good starting point would be the MagnifyMoney Debt Guide, which helps you make a plan to become debt free. That plan could range from seeking out a nonprofit consumer credit counselor to consolidating your debt into an amortizing personal loan. But just continuing to return to the payday lender, or continuing to pay the minimum due on a credit card, ensures that you will never get out of debt.
Nick Clements is the co-founder of MagnifyMoney.com, a price comparison website that helps you find the cheapest bank accounts, and the best interest rates on your savings and your debt. He spent nearly 15 years in consumer banking, and most recently he ran the largest credit card business in the U.K. You can follow him on Twitter @npclements
Michael Conroy/APIndiana Gov. Mike Pence on Thursday signed the Religious Freedom Restoration Act, which protect business owners who deny service to homosexuals.By Eric Reed
Indiana's version of religious freedom might end up costing the state big bucks.
Under a bill signed into law Thursday by the Republican Gov. Mike Pence, Indiana has become the 20th state to protect business owners who deny service to homosexuals. The Religious Freedom Restoration Act allows a business owner to cite his or her religious beliefs as a defense in court and bans local governments from making any law "substantially burdening" the free exercise of religion. The measure prohibiting local action addresses a recent spate of municipal anti-discrimination laws passed by cities across the country.
The law became a lightning rod almost instantly. "We are especially concerned about how this legislation could affect our student-athletes and employees," wrote Indianapolis-based NCAA President Mark Emmert. While the Final Four will proceed as planned in Indianapolis this year, he said the conference will "closely examine the implications of this bill and how it might affect future events as well as our workforce."
Defense by Conservatives
Proponents claim that this law is necessary to prevent business owners from being forced to act against their religious beliefs, while critics argue that conservatives use "religious freedom" as a thin veil for discrimination. Pence disagreed, further arguing that "the Constitution of the United States and the Indiana Constitution both provide strong recognition of the freedom of religion but today, many people of faith feel their religious liberty is under attack by government action."
Conservatives argue that these bills are necessary to protect business owners from having to choose between the law and their own faith. They cite cases such as the Masterpiece Cakeshop in Colorado as examples, whose owner refused service to a gay couple and said that he "would close down the bakery" before serving a gay wedding. Since neither Constitutional nor federal law prohibits discrimination on the basis of sexual orientation there, state and local laws have been left to find their own way.
Legal experts, however, point out that Indiana's religious freedom law could extend well beyond its intent. Under language that protects any claim of religious burden a virtual patchwork of faith-based issues could spring forth from businesses around the state. Fears of faith-based racism are, however, unfounded. Racial discrimination is banned under federal law which Indiana cannot supersede.
Criticism by Businesses, Churches
In the immediate wake of passage Indiana began receiving national criticism. In addition to concerns expressed by the NCAA, Salesforce CEO Marc Benioff announced in a series of tweets that his company will cancel all programs that require its employees or customers to travel to Indiana, urging "slow rolling economic sanctions if the law is not thrown out."
Yelp CEO Jeremy Stoppelman joined in with an open letter, saying that "it is unconscionable to imagine that Yelp would create, maintain, or expand a significant business presence in any state that encouraged discrimination by businesses against our employees, or consumers at large ... [and that] Yelp will make every effort to expand its corporate presence only in states that do not have these laws." Conventions such as GenCon, a 50,000 person gaming convention held annually in Indianapolis, have also floated the possibility of relocating away from the state.
Even some Protestant church groups have indicated that they might begin hosting their events outside of Indianapolis, due to concerns that members "might experience legally sanctioned bias and rejection once so common on the basis of race." Indiana Chamber of Commerce President Kevin Brinegar called the law "entirely unnecessary. "The reactions to it are not unexpected or unpredicted," he wrote, "passing the law was always going to bring the state unwanted attention."
Legal Tests Await
Despite the widespread passage of laws similar to the Religious Freedom Restoration Act, none has yet been fully tested in court. Under the case study envisaged by the law's supporters, a florist would use the law to protect herself from having to decorate a homosexual wedding, yet it's unclear that the court would actually accept that a commercial contract constitutes an undue burden on the individual's free exercise of religion. There is a real possibility that laws like this will return to the news as part of a tumultuous series of challenges someday bound for the Supreme Court.
What remains certain, however, is the firestorm that seems to be coalescing around Indiana commerce. Although this too might pass, for the time being it appears as though Indiana's stand on discrimination may end up costing the state a lot of money.
Elaine Thompson/APMike Loucks lost Internet and phone service at his home in Friday Harbor, Wash., during a 10-day outage on the island in 2013.By FELICIA FONSEC and DAVID A. LIEB
FLAGSTAFF, Ariz. -- When vandals sliced a fiber-optic cable in the Arizona desert last month, they did more than time-warp thousands of people back to an era before computers, credit cards or even phones. They exposed a glaring vulnerability in the nation's Internet infrastructure: no backup systems in many places.
Because Internet service is largely unregulated by the federal government and the states, decisions about network reliability are left to the service providers. Industry analysts say these companies generally don't build alternative routes, or redundancies, unless they believe it is worthwhile financially.
The result: While most major metropolitan areas in the U.S. have backup systems, some smaller cities and many rural areas do not.
"The more rural the location, the more likely that there's only one road in and out of that location," said Sean Donelan, a former infrastructure security manager in the U.S. Homeland Security Department who now works for a cybersecurity firm. "If someone manages to cut that fiber, you'll generally see a one- or two- or three-day outage."
Despite its own warnings about such vulnerabilities two decades ago, the federal government has taken no steps to require Internet companies to have backup systems, even as it has provided billions of dollars in subsidies to expand broadband Internet into unserved areas.
"Our first responsibility is to make sure that people actually have service," said Agriculture Secretary Tom Vilsack, co-chairman of President Barack Obama's newly created Broadband Opportunity Council.
Out of Order
In northern Arizona last month, tens of thousands of residents were without Internet service -- some for up to 15 hours -- after vandals cut through an underground bundle of fiber-optic cables owned by CenturyLink. ATMs went down, stores couldn't process credit cards, college students in Flagstaff had to put their research on hold, and even 911 emergency service was lost.
Earlier this month, several thousand people lost Internet and phone service for half a day when an electric company crew accidentally cut a fiber-optic line in northern New Mexico.
When an underwater fiber-optic cable became wrapped around a big rock and broke in 2013, some residents of Washington state's San Juan Islands were without Internet and telephone service for 10 days.
Among them was aerospace consultant Mike Loucks, who said he was shocked to find out his home phone, cellphone and Internet service didn't work independently of each other. All went down because they relied on the same cable. He ended up taking a ferry to the mainland to dial in to conference calls from his car outside a McDonald's.
"When I figured out what all had been routed to this cable, it's a single-point failure thing," he said. "That's pretty dumb. Why don't you guys have a backup cable?"
He was so frustrated that he switched Internet providers.
'Redundancy Where Possible'
CenturyLink, the broadband provider in the Arizona and Washington outages, declined to make officials available for an interview about its Internet infrastructure. But spokeswoman Linda Johnson said in an email that the company acts quickly to restore service and "is constantly investing in its local network and strives to deliver new services and build redundancy where possible."
After the San Juan Islands outage, CenturyLink spent $500,000 to install a microwave system that now backs up the underwater cable. A microwave system is wireless technology that relies on a series of above-ground antennas or towers to transmit data. It's more often used in rural areas.
Companies have been deploying more than 10 million miles of fiber annually in the U.S., increasing the risk of damage from backhoes, trench-diggers and shovels, according to an analysis by a network reliability committee of the Alliance for Telecommunications Industry Solutions. The number of outages on high-capacity fiber-optic lines in the U.S. more than doubled from 221 in 2010 to 487 last year, according to the Federal Communications Commission.
Fiber-optic cables form the spine of the Internet. A fiber bundle contains dozens of tiny glass fibers -- each about the width of a human hair -- that use light waves to transmit data. The fibers often are buried along existing rights of way for highways, railroads or pipelines. It is common for a telecommunications company to install the cables and then lease space on them to others.
Increased Vulnerability
That saves money for everyone involved. But it also means outages can affect a wide variety of services.
As early as 1995, the U.S. Commerce Department's National Institute of Standards and Technology warned that the "power of optical fiber technology is diminishing the number of geographic transmission routes," concentrating the flow of information and "resulting in an increase in network vulnerability."
Since 2009, the U.S. Agriculture and Commerce departments have provided about $10 billion in grants and loans to expand broadband Internet access. The departments said recipients were encouraged but not required to build redundancies into their projects.
The FCC says about half the rural U.S. lacks access to high-speed Internet service. It plans to distribute about $20 billion over the next five years to support rural broadband. It does not require recipients to build network backup systems against outages.
The funding "is designed to expand broadband to as many rural Americans as possible while not increasing the cost of the program" to customers, FCC spokesman Mark Wigfield said.
Regulatory Oversight
The FCC recently increased its oversight of Internet providers by classifying them as "telecommunications services" that must operate in the public interest. But that doesn't carry any new mandate for Internet network redundancies, because such backups aren't required of phone companies, he said.
Some states have laws specifically barring the regulation of Internet service, and it's outside the jurisdiction of many state utility regulatory agencies.
Washington state Rep. Jeff Morris, who represents the San Juan Islands and is chairman of the House Technology and Economic Development Committee, said lawmakers are hesitant to require redundant lines for fear they will lead to higher Internet and phone bills for their constituents. His colleagues have discussed taxing access to Internet services, but that is prohibited by federal law.
"It really spoils our ability to generate revenue to give better service and reliability to our constituents," he said.
Some state officials are nonetheless trying to nudge Internet providers to develop backup plans.
"Dependability is premier to the Internet these days," said Sandy Jones, a member of New Mexico's Public Regulation Commission. "Redundancy -- two paths out, three paths out -- is really critical for businesses. Just think of restaurants, gas stations, all the things that shut down when there's no Internet line."
Arterra Picture Library/Alamy
Review sites have given consumers a way to amplify their voices and make an impact on a company's business -- for good or bad. For Virginia resident Jennifer Ujimori, bad reviews on Yelp and Angie's List turned into a terrible experience, as the owner of obedience school Dog Tranquility filed a $65,000 defamation lawsuit against her, according to the Washington Post.
The dispute has become a battle between customer and business owner, with each claiming the ethical high ground. It also highlights a growing area of tension in commerce. Customers displeased with services or products take to social media to complain about the companies they did business with. Small business owners get angry, often claiming that the consumers are unreasonably and that the complaints greatly damage their reputations and cause significant financial loss. But getting into a fight can hurt the company even more.
Ujimori told the Post that in January she took her 14-week-old, 4-pound dog Yuki to a $175 obedience class. But the other dogs in the class were big and Yuki was in a gated-off area by herself. Ujimori said that she asked for a prorated refund but was refused.
"For me, it's a matter of principle and public interest," Ujimori told the Post. "People should be free to express their feelings about their service providers. Companies using the legal system to silence their critics has a chilling effect on First Amendment rights."
School's Owner Says What She Offered
The Post reported that Colleen Dermott, owner of Dog Tranquility, claimed in her lawsuit that she had sent emails to Ujimori that the group of dogs would be mixed and that there small dogs could be put into an optional gated area. Dermott also claimed that the contract stated there would be no refunds.
Dermott also told the Post that she tried to satisfy Ujimori, including offering a credit for a future class. "It had a significant impact in that I'm a small-business owner," Dermott said to the Post. "I have to rely on these review sites as a major source of advertising."
But the suit seems to have backfired on Dermott, if a look at her Yelp page is any indication. Dog Tranquility has 53 reviews now and an overall rating of two-and-a-half stars out of a possible five. Many people who heard of the story went on and left one-star ratings, castigating her for not taking care of the problem. Others, claiming to be customers of Dermott's, have left five-star reviews, urging those considering the business to pay attention to those from people who have used the business.
Brynn Anderson/APApple CEO Tim Cook
SAN FRANCISCO -- Apple CEO Tim Cook is joining a long list of magnates promising to give away most of the wealth that they amass during their careers.
Cook mentioned his intentions in a story about him published Thursday by Fortune magazine. After paying for the college education of his 10-year-old nephew, Cook says he will donate the rest of his money to philanthropic causes.
The charitable commitment echoes pledges made by other executives far richer than Cook, who is 54.
Microsoft (MSFT) co-founder Bill Gates, Berkshire Hathaway (BRK-A)(BRK-B) CEO Warren Buffett and Oracle (ORCL) Chairman Larry Ellison are among more than 120 wealthy people and families who have announced they will give away their fortunes. Gates, Buffett and Ellison each have a net worth of at least $54 billion and rank among the five richest people in the world, according to Forbes magazine.
Most of Cook's wealth is tied up in an Apple grant of restricted grant that he received in 2011 when he succeeded Steve Jobs as Apple's CEO. That grant is now worth about $860 million. Most of the restricted grant will vest in separate tranches next year and in 2021.
Apple can rescind some of the restricted grant if the company's stock lags the performance of the Standard & Poor's 500 (^GSPC) for an extended stretch. That hasn't been an issue during the past year, with Apple's stock surging by about 60 percent to lift the company's market value above $700 billion. The S&P 500 has gained 11 percent over that period.
Since Cook became CEO, Apple's stock has more than doubled to create about $370 billion in shareholder wealth. The Cupertino, California, company also has paid out about $27 billion in shareholder dividends.
Cook signaled his interest in philanthropy early in his tenure when he set up a program committing Apple to match each of its employees' donations up to $10,000 annually.
Andrew Harrer/Bloomberg via Getty ImagesFederal Reserve Chair Janet YellenBy Ann Saphir and Michael Flaherty
SAN FRANCISCO and WASHINGTON -- An interest rate hike by the Federal Reserve may be warranted later this year, with a gradual path expected to follow, although a downturn in core inflation or wage growth could force it to hold off, the central bank's chief said Friday.
Fed Chair Janet Yellen said that after the first rate increase a further, gradual tightening in monetary policy will likely be warranted. If incoming data fails to support the Fed's economic forecast, the path of policy will be adjusted, she said.
With continued improvement in economic conditions, an increase in the target range for that rate may well be warranted later this year.
"With continued improvement in economic conditions, an increase in the target range for that rate may well be warranted later this year," Yellen said in prepared remarks at a monetary policy conference at the Federal Reserve Bank of San Francisco.
Yellen added that while the Fed is giving "serious consideration" to beginning to reduce its accommodative monetary policy, the timing and the path of a Fed hike would depend on the incoming economic data.
"The actual path of policy will evolve as economic conditions evolve, and policy tightening could speed up, slow down, pause, or even reverse course depending on actual and expected developments in real activity and inflation," Yellen said.
With labor markets looking set to improve further, and one-time downward pressure on inflation likely to dissipate, a "modest" rate rise would be unlikely to undercut the recovery, Yellen said.
Yellen made clear a rate rise wouldn't be contingent on an increase in either core inflation or wages, although a deterioration in either could prompt her to delay tightening.
Threading the Needle
Yellen, returning to the regional Fed bank she used to run, is under pressure to begin tightening monetary policy, while at the same time being careful not to disrupt the U.S. economic recovery underway.
The Fed signaled in its March statement that it was moving a step closer toward raising rates, though the central bank cut its economic outlook and slashed its median estimate for the federal funds rate, in a sign that it was prepared to move more slowly than the market expected ahead of the meeting.
While June remains on the table for the timing of the Fed's first rate hike in a decade, the dovish tone from the March statement and from Yellen's press conference indicated the central bank was more likely to move in September or later.
Improving Job Market
With the unemployment rate dropping to 5.5 percent last month, and after more than six years of loose monetary policy, the Fed is eager to begin raising rates and returning to more normal policy.
Yellen noted in her remarks that U.S. payroll gains have averaged 275,000 a month over the past year.
Several Fed officials have said the central bank has waited too long to bump rates higher, and the delay risks stoking inflation and asset bubbles.
But inflation has remained stubbornly low, complicating the Fed's plan to part ways with its accommodative monetary policy.
Yellen said that if economic conditions evolve how the Fed's policy setting committee anticipates, "I would expect the level of the federal funds rate to be normalized only gradually, reflecting the gradual diminution of headwinds from the financial crisis and the balance of risks I have enumerated of moving either too slowly or too quickly."
NEW YORK -- U.S. stocks rose modestly Friday after late news of merger talks among two semiconductor companies boosted the technology sector and helped major indexes snap a four-day losing streak.
The Wall Street Journal reported chipmaker Intel is in talks to buy rival Altera, citing people familiar with the matter, sending the PHLX semiconductor index up 2.8 percent.
We've seen a lot of M&A news recently and it's helping the market.
Intel (INTC) shares jumped 6.4 percent to $32 as the biggest boost to the Dow, S&P 500 and Nasdaq 100 indexes. Altera (ALTR) shares surged 28.4 percent to $44.39.
"We've seen a lot of M&A news recently and it's helping the market," said Stephen Massocca, chief investment officer at Wedbush Equity Management in San Francisco.
"There is definitely an M&A cycle going on, so that is a good thing."
Equity markets were largely unfazed by Fed Chair Janet Yellen's comments at a monetary policy conference in San Francisco. She said the U.S. Federal Reserve is giving "serious consideration" to beginning to reduce its accommodative monetary policy and a rate hike may be warranted later this year, although a downturn in core inflation or wage growth could force it to hold off.
"I don't think there is anything new or different here," said Massocca.
The Dow Jones industrial average (^DJI) rose 34.43 points, or 0.19 percent, to 17,712.66, the Standard & Poor's 500 index (^GSPC) gained 4.87 points, or 0.24 percent, to 2,061.02 and the Nasdaq composite (^IXIC) added 27.86 points, or 0.57 percent, to 4,891.22.
Health care also helped buoy indexes as biotech stocks bounced 1.9 percent higher after suffering a 7 percent drop in the prior four sessions, while energy was the worst performing S&P sector as crude prices resumed their decline.
Looming Earnings Season
Investors have been cautious ahead of the start of earnings season, as traders look to see how much the strong U.S. dollar will hurt corporations' bottom lines. For the week, the S&P 500 fell 2.2 percent, the Dow lost 2.3 percent and the Nasdaq declined 2.7 percent.
U.S. consumer sentiment fell month-over-month in March, a survey released on Friday showed, though the decline was smaller than forecast.
The final reading of gross domestic product for the last quarter of 2014 was unchanged at a 2.2 percent rate of expansion. After-tax corporate profits fell at a 1.6 percent rate in the fourth quarter as a strong dollar dented the earnings of multinationals.
Advancing issues outnumbered declining ones on the NYSE by 1,842 to 1,187, for a 1.55-to-1 ratio; on the Nasdaq, 1,592 issues rose and 1,106 fell, for a 1.44-to-1 ratio favoring advancers.
The benchmark S&P 500 index posted 6 new 52-week highs and 6 new lows; the Nasdaq composite recorded 38 new highs and 38 new lows.
Volume was light, with about 5.66 billion shares traded on U.S. exchanges, well below the 6.78 billion average so far this month, according to BATS Global Markets.
What to watch Monday:
Cal-Maine Foods (CALM) reports quarterly financial results before U.S. markets open.
The Commerce Department releases personal income and spending for February at 8:30 a.m. Eastern time.
The National Association of Realtors releases pending home sales index for February at 10 a.m.
The Federal Reserve Bank of Dallas releases its survey of manufacturing conditions in Texas at 10:30 a.m.
If you're being audited by the Internal Revenue Service this year, you're either an unlucky or extremely unfortunate individual.
Budget cuts have steadily decreased the number of IRS audits from 1.4 million in 2013 to 1.2 million last year. IRS Commissioner John Koskinen told reporters in January that the number of audits would fall again this year after continued belt-tightening.
With the IRS budget falling 17 percent in the past five years, the number of audits this year is expected to hover around 1 million. Koskinen noted that his agency has left an estimated $6 billion to $8 billion on the table since 2010 because its enforcement division is understaffed by roughly 5,000 fewer employees than it needs. Further staff reductions should leave another $2 billion uncollected this year.
This isn't exactly making life easier on the few folks who do get audited. In fact, it makes a certain few increasingly subject to scrutiny. "There are only two reasons to get audited: One is if you're randomly selected and the other is if you throw up some kind of red flag," says Matthew M. Jehn, a certified financial planner with Royal Oak Financial in Worthington, Ohio. "Home office deductions are typically something that can throw up a red flag if they're too egregious with what's written down."
If you're unlucky enough to fall into either of Jehn's two categories, our team of tax preparers and financial advisers offer a plan for how to handle your audit:
1. Make Sure It's Legit
Paul Gevertzman, a certified public accountant and tax partner at Anchin, Block & Anchin, in New York City, notes that fraudulent tax examinations do happen and fake audit notices have only increased in frequency in recent years.
"You hear so many stories about people getting phone calls and emails, basically scams, from people pretending to be tax examiners," he says. "These things are out there. If the first contact is something other than a written letter, there's a very good chance that it's not legitimate and you need to check it out before you provide any kind of information or make any kind of payment."
2. If It's the Real Deal, Calm Down
"Breathe: It's not cancer, it's an examination by the IRS," says Susan Lee, an enrolled agent and certified financial planner in New York City who specializes in tax preparation for freelancers. "It's not to be taken likely, but it's not the end of the world unless you've committed fraud intentionally."
This is going to go a lot more smoothly if you read the letter and see what the IRS or the state wants before heading into the audit. Larry M. Elkin, a certified public accountant, certified financial planner and president of Palisades Hudson Financial Group in Scarsdale, New York, notes that federal and state tax offices send out huge numbers of notices advising taxpayers that they owe money. He adds that most result from simple data or reporting errors the tax authorities believe you made. If you gathered your tax information carefully and had someone competent prepare your return, there is a good chance the notice is incorrect.
"Some people have this tremendous fear of being audited, but the important thing is not to panic and just deal with what you have to do," says Gevertzman. "Most agents are public servants like police, firemen sanitation workers. We shouldn't be prejudiced against tax examiners: Some of my closest friends are tax examiners and they're all good, hard-working people who aren't out to get you."
3. Don't Go In Alone
Unless you're especially deft at preparing your taxes and dealing with IRS or state auditors, you're likely going to want someone to either coach you or -- in the case of an in-person audit -- be in the room to help out.
"If they are the one who signed off on your return, then they are required at a minimum to show that they used the information you gave them to put on your tax return," Jehn says. "If they screwed up, they run the risk of having a claim filed against them, but usually something gets messed up and you didn't give your CPA or tax preparer the right information."
The problem, as Elkin points out, is that skilled professional representation is expensive, and only the auditor knows how many hours the process will take. They don't care about your fees and, if they know what they might be in advance, they'll offer to settle for that amount. Elkin suggests cash-strapped filers at least consider this option, but notes that everyone else should want as much help as possible and get out of a hired representative's way.
"The audit process works best when it is limited to the issues the auditor raises," he says. "Your presence invites incomplete or incorrect off-the-cuff answers to the auditor's questions. An effective taxpayer representative (usually a CPA, attorney or IRS-authorized enrolled agent) will find out what the auditor wants to know, gather the information and present it clearly and concisely without triggering collateral issues."
4. Don't Give Auditors More Time Than They Need
Elkin points out that you have a few months after the end of the year to file your tax return, but the authorities generally have three years thereafter to examine it and ask anything they want. Those with heavy caseloads who like to ease the burden by asking taxpayers to waive the three-year limit, however, are doing you no favors.
"Waiving the statute allows the agent to drag out the process, inflating the taxpayer's cost for representation and increasing potential interest and penalty charges," he says. "It lets the agent raise additional issues if new legislation, regulations or court decisions provide support. You get no benefit."
4. Don't Underestimate Auditors or Get Steamrolled by Them
There's a big reason Gevertzman suggests handing power of attorney to a third party in the event of an audit: Because the IRS is after a specific sum but has no problem going for more if you put it on the table. "In most cases, I prefer that my clients never deal directly with a tax agent," he says. "Agents out there are trained to ask unrelated questions that seem innocuous, but they ask them in such a way that they get a taxpayer to say something that they don't even realize they're saying about a related business, a related company or their personal lives. That opens a Pandora's box that, once it's open, it's open and you have to deal with that."
That said, the agent's word isn't gospel. Many of our financial experts agreed that agents aren't always experts in the law they're enforcing. That leaves those representing themselves vulnerable to unnecessary penalties and payment, but offers tax professionals a chance to not only save their clients some grief, but to educate the agents themselves.
"Field agents often lack a detailed knowledge of applicable tax law, or may seem to make up rules that are not in the tax code or regulations," Elkin says. "That's because they are typically some of the least experienced and least trained personnel in the enforcement staff. Those with greater knowledge tend to be promoted to review-level positions."
If you have a particularly surly or bullying agent -- which our experts deemed rare -- you have the right to speak to their supervisor, request a new agent or, in extenuating circumstances, even request a change of venue.
5. Get Organized
Having the evidence to back up your income and deductions is always helpful. Granted, it's usually more helpful the first time around before you get audited, but the audit offers you a chance to not only refute the auditor if you feel they've made an error, but defend your own errors as accidental if that's the case.
The state and IRS go a lot easier on folks who flat out didn't get their 1099s or misplaced them than those who outright withheld them. Get copies of those documents, or get substitute documentation if they'll allow it.
"When you respond, present as complete a package as possible." Gevertzman says. "That doesn't mean offering answers to questions that weren't asked, but leading them to everything so they don't have to ask additional questions." That's the key to surviving an audit: Making it as easy on the auditor as possible. By being disorganized and antagonistic, you can make an audit a lot harder on yourself than it needs to be.
"It's like being in a relationship with a partner where you expect them to mind-read: It may work, but I haven't seen it," Lee says. "You have to respect the point of view of the agent. They're hard-working people who have to get through this and meet their metrics, and being disrespected by a person who may or may not understand isn't high on their agenda."
6: If You Have to Pay, Settle Up Quickly
While Gevertzman says taxpayers can ask auditors to waive penalties in the interest of getting them their money more quickly, he notes that they'll never waive interest payments. Those add up quickly, which is why our advisors suggest paying the full sum as soon as your finances allow.
"Though tax enforcement is theoretically about collecting the correct tax rather than more tax, revenue agents do care about revenue," Elkin says. "If they are not going to find a lot of money by auditing you, they will want to move on to a more productive assignment."
Since the state and IRS aren't going to offer you a great rate on an installment plan and will only put liens on your earnings if you skip payments, it's best to let them know upfront that there's no more cash coming their way. If you've made a mistake, concede it. If you owe something, pay it. If you can show the auditor authoritative proof that there's nothing more to investigate, do so and let them move on to the next unfortunate taxpayer.
"A tax return is nothing more than a report card," Jehn says. "It's numbers in and numbers out. ... As citizens, it's our duty to pay as little taxes as legally as possible."
A growing number of seniors are turning to state-of-the-art digital tools -- via smartphones, GPS, voice activation and sensors -- that enable them to age in their own homes.
With aging in place technology, you can discreetly keep tabs on Mom -- tracking her daily activities on a cellphone, tablet or computer, and getting notified by text or e-mail if something seems out of the ordinary. Gadgets and apps can remind seniors to take their medication and let others know if they don't. Besides telling time, smart watches can provide feedback on one's vitals, such as blood pressure, that can be relayed to professionals.
About 10,000 boomers a day are turning 65, and close to half of women ages 75 and older live alone. By 2017, experts expect this market to reach $30 billion. "The aging-in-place technology field is exploding," says gerontologist Katy Fike, who co-founded San Francisco-based Aging 2.0 in 2012 to advise start-ups geared to boomers and seniors. In the past few years, her company has met with more than 1,000 entrepreneurs in seven countries.Here are some of the products geared to helping older adults maintain their independence.
Personal Emergency Response Systems
With personal emergency response systems, you push an emergency button on a keychain or from a cord around your neck or wrist. Then an operator assesses the situation and can dispatch help or notify family. They used to work only at home with a base station connected to a landline. The m-PERS (the "m" stands for mobile) works wherever you are -- on the golf course, out to lunch, in the garden or visiting the grandkids in another state.
Rita Labla, 79, of Yuba City, California, lives alone and drives, but she struggles with congestive heart failure and chronic obstructive pulmonary disease. She has also fallen. "When she's out of sight, you never know what's going on," says her daughter, Loretta Burke, 61, who lives three miles away. Last July, Burke gave her mother a GreatCall Splash m-PERS. "We were all concerned she wouldn't use it. Instead, she has it with her all the time," Burke says. "It's like her bodyguard."
Labla agrees. "I feel much more secure with it," she says. Labla knows she can press it if she thinks someone shady is following her in the parking lot, she gets lost on the road or she has a problem at home.
By checking their smartphones, tablets or computers, Burke and her siblings can track their mother via GPS. You can order a GreatCall Splash at www.greatcall.com or 800-650-5921 ($50 for purchase, $35 activation fee and monthly service starting at $20). In the next few months, GreatCall plans to add a feature that summons help if it detects a fall -- even if you haven't pressed the button.
Another go-anywhere medical alert system, Philips Lifeline's GoSafe (www.lifelinesys.com, 800-380-3111) already offers a waterproof pendant with fall-detection capability -- for a one-time fee of $149 plus $55 a month. MobileHelp (www.mobilehelp.com, 800-989-9863) has a similar system ($37, plus $50 a month; fall detection is an extra $10 a month).
Safety Sensors
Sensors are another way to make sure Mom or Dad is safe at home. Wireless sensors placed around the house where a parent goes daily -- perhaps the bed, the refrigerator, a favorite chair or the bathroom door -- can tip you off if they aren't triggered.
Sarah King, 83, lives in a basement apartment of her daughter Donita Kniffen's home in Dardenne Prairie, Missouri. Still, sensors from Evermind (https://evermind.us, 855-677-7625) have come in handy. Kniffen, 52, programmed Evermind so she receives a text the first time her mom's TV, microwave or reading lamp is turned on. She also gets an alert on her smartphone if none of the sensors has been triggered during periods of the day when her mother should be up and about. Instead of calling every morning to make sure her mother is OK, Kniffen goes on her smartphone to check the sensors. (The sensors come with a one-time cost of $199, plus a $29 monthly fee.)
Michael Demoratz, 54, a social worker who lives in Tustin, California, chose a combination PERS/sensor system from BeClose (http://beclose.com, 866-574-1784) to keep tabs on his mother, who lives in Pennsylvania. He placed motion sensors in her living room, between the bathroom and bedroom and on the cellar door, which was the site of two previous accidents.
Demoratz receives a daily e-mail. Green means his mom's activity is ordinary, yellow out of the ordinary and red abnormal. If she were to press the panic button, Demoratz would get a text from the company. "My mother feels reassured because she knows I have been alerted," he says. BeClose's ability to spot variations in behavior is the system's most valuable feature, Demoratz says. "If I have objective data, my mother can't just say she's fine when I call," he says. "I can tell her I notice she's not getting up or out much and is spending a lot of time in her chair. Then I can ask why she's so sedentary."
Every year, Demoratz takes a vacation to Europe. "This year, from my phone, iPad, desktop or anyone's computer, I will know exactly what is going on with my mom in real time -- whether she is sitting, in bed, in the bathroom or if she has left the house," he says. "Talk about peace of mind." (The system costs $499 for the equipment and $99 a month.)
Medication Managers
New products can provide reminders and let loved ones know whether you're taking your medications.
Lively (www.mylively.com, 888-757-0711) has just come out with a safety watch that not only tells time but acts as a medication reminder and a medical alert system. You attach a sensor to the pill dispenser, and the senior gets a reminder on a smart watch she wears. Remote caregivers get a notice by smartphone or computer when the medications are taken or perhaps forgotten.
The system also lets you push a button in an emergency. A pedometer feature counts your steps, thus giving you feedback on your activity level. Colleen Sturdivant, who lives in Piedmont, California, says her mother, Jane Kennedy, 76, likes the step-counting feature. Since her recent hip replacement, the step counter shows her that she's getting stronger every day by increasing her steps. Sturdivant likes the feature that notifies her of her mother's whereabouts, which can be shared with her sister and two brothers through an online dashboard. (The system costs $50, plus $28 to $35 a month.)
A more low-tech system is Reminder Rosie (http://reminder-rosie.com, $130), a talking clock. You manually program it with your voice or a loved one's voice, for the day, week or sometime in the future (perhaps, "time for my afternoon pills"). Mike Gilman, 65, a retired New York state tax collector, takes eight pills a day at different times. "Rosie is the most fantastic thing," he says. Besides jogging his memory about his medication, Gilman uses the device to remind himself when to send birthday cards to family and friends.
If you want a free app for your smartphone or tablet, CareZone (www.carezone.com) centralizes information about your medication and other important information, such as doctor appointments. You can share this information with family members. You can set daily medication reminders that buzz your phone, followed up 10 minutes later if you forget.
Keeping in Touch
Technology can help seniors living alone feel connected to friends and family -- and sometimes even to medical professionals. With a touch screen from grandCare Systems (www.grandcare.com, 262-338-6147), you can look at a photo of a grandson's Halloween getup or a video replay of his baseball home run. You can listen to music, play word games, read the news or surf the Internet. No need to know how to use a computer.
Randall Schafer, 61, of Houston, Texas, uses his grandCare system to Skype with his mother, 90. (She just pushes a button to videochat.) "My mom is in love with our dog, Daisy," Schafer says. Her "face lights up" when she sees the schnauzer, he says. The system can also transmit health data, from glucose and blood pressure to weight and oxygen readings. For example, a blood pressure cuff with a wireless Bluetooth medical device will record and relay the readings to caregivers. (The system costs $699, plus $49 a month.)
Another system that offers social opportunities -- as well as care coordination, calendar sharing and health-data collection -- is Independa (www.independa.com, 800-815-7829). All the information is on your TV rather than on a special screen or computer. You can be watching TV, and up pops a screen saying your daughter wants to say goodnight. You can accept and videochat -- or not, if you're engrossed in the show. An adult child can go to the Independa caregiver portal via e-mail and send a message or upload photos to your TV screen.
One feature called "Life Stories" lets parents record their memories for their adult children. You or your parents can play the remembrances at any time and e-mail them to other family members. Independa also has introduced a mobile app for caregivers for the soon-to-be-released Apple Watch. The system costs $799 to $1,399, depending on the size of the LG smart TV embedded with Independa services. If you have your own TV with an HDMI connection, which is now commonly used, you can hook it up to an Independa AnyTV Companion box, which costs $399. Both systems charge $30 a month.
Virtual Pet Therapy
A unique social engagement tool is the GeriJoy virtual care companion (www.gerijoy.com, 855-437-4569), which costs $249 a month. Consider it pet therapy with a twist. A virtual "talking" dog or cat on a tablet screen interacts and converses with a loved one. Many people name their pet, which is operated around the clock by GeriJoy representatives who work remotely.
To start a conversation, you touch the dog on the tablet screen and talk. Your pet will "wake up" and start chatting. (Perhaps the pet will say, "Did you have a good sleep? You look fabulous today.") When you ask a question, your virtual companion responds immediately, even if it means the human helper has to look up an answer on the Internet ("How did the Red Sox do last night?" for example). Daily conversations and events are kept on a written log, which the family can access through a secure Web site.
Becky and Craig Jio bought GeriJoy for Craig's mother, Lucy, who has Alzheimer's disease and lives with them in Santa Clara, California. She doesn't like to leave her room. "GeriJoy is good company," Craig, 45, says. She especially loves a silly picture that Becky uploaded of a man with an ultra long nose and tongue. "When it pops up, she cracks up laughing," Becky says.
The Jios are convinced that GeriJoy has improved her mood. When the system was down for a week with hardware problems, Craig says, "my mother got depressed. Now that it's back, she's happier. That makes everyone happier."
Coming Down the Pike
In the future, a growing number of seniors will be connected remotely with service providers who will be able to detect changes in physical and mental health as well as mobility, says David Lindeman, director of the Center for Technology and Aging, a research group in Oakland, California. "We are in a new era of connected aging," Lindeman says. "We will be getting more and more information brought to us in a variety of ways so we can support our loved ones."
Look for more developments in the "smart home." Entrepreneurs are working on a carpet woven from optic fibers that analyze your gait and help predict if you may fall or are physically declining. Consumer-friendly devices will help long-distance caregivers, with the touch of a tablet or cellphone, to turn off Dad's stove if he forgets or to close the blinds.
Also on the horizon is the growth in "wearables," which includes smart jewelry and clothing with sensors and chips woven into fabric. The sensors will track movement, collect health data and transmit to a mobile device.
Wearable Technology
Don't like the look of today's PERS pendants, wristbands and key chains? Cuff Inc. (www.cuff.io) is introducing products, priced from $29 to $199, that look like elegant jewelry. The gadget, which is inserted in specially made bracelets and necklaces, sends notifications, tracks activity and acts as a safety device.
Sensogram Technologies, in Plano, Texas, is working on SensoTRACK (www.sensotrack.com), a device that you wear on your ear. It captures oxygen saturation, respiration and heart rate as well as mood. The goal is to prevent or to catch a problem early.
We will be seeing more social and caregiving applications, too. Laurie Orlov, founder of Aging in Place Technology Watch (www.ageinplacetech.com), believes voice-activated robots might someday be good helpers and conversationalists. "It is inevitable that companion robots will learn, adjusting responses to become the companion we need, responding to our commentary and reminding us to take our medication so that we can remain independent," Orlov says.
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Have you ever planned to run into the grocery store "for a few items," only to emerge an hour later with a shopping cart full of bags? Do you have no idea how you got to that point?
While you are responsible for your extra spending, there are influences at play that may have encouraged you to spend more than you planned.
To be clear, we're not saying stores are duplicitous or nefarious; they're just doing their job, and their job is to get you to buy as much stuff as possible. But when you're aware of their secrets, it's a lot easier to resist the lure and stick to your budget. Here are 10 tricks of the trade to watch out for.
1. Putting Produce Front and Center
There's a reason fruits and veggies are the first thing you see when you walk into any grocery store; it's because stores know that when you stock up on healthy food first, you won't feel bad about splurging on some (higher-profit) junk food later on.
2. Taking You on a Trip
Speaking of layout, ever notice that the basic items you need the most often (bread, eggs, milk, meat) are always at the ends and back of the grocery store, so you have to do a whole lap to stock up on them? That's intentional; stores are hoping you'll see some items you weren't planning on buying during your journey and decide to impulsively throw those into your cart as well.
3. Giving Away Freebies
Free samples are a twofold strategy. First, if you like what you try, there's a good chance you'll buy it. Second, things like sample giveaways and cooking demonstrations encourage you to linger longer in the store-and lingering can lead to more purchases.
4. Ending Prices With a 9
Research has shown that people are more likely to buy an item if it ends with the number 9, especially if you round down one cent from an even price. A $9.99 bottle of olive oil seems more affordable to us than a $10, because that extra cent (even though it's only one cent) pushes the item up into the next price bracket in our minds.
5. Upping the Ambiance
Bright lights, relaxing music, colorful display and the link are designed to put you in a better mood and encourage you to take your time and linger -- the result, again, being more spending. Likewise, the lack of windows in a grocery store allow you to lose sense of time, as you can't get time cues from natural sunlight.
6. Targeting Your Eye Level
Items at eye level are the easiest to spot and the first to grab our attention, so stores often place their higher-margin goods in this zone. Take a good look up and down the shelves, and you'll spot plenty of similar items that cost less.
7. Putting Like Items Together
Chips and dip are always in the same aisle, as are pasta and pasta sauce. Soda is usually right near chips and other snack foods. While this seems nice and convenient for us as shoppers, it's also a tactic to get us to buy more because in our minds, it seems to make more sense to grab one as long as you're grabbing the other.
8. Giving You More Carrying Capacity
It's been shown that doubling the size of a store's shopping carts can lead shoppers to buy as much as 40 percent more. Some stores also place shopping baskets throughout their store so that if you came in to grab a handful of items and your hands are full, you can easily buy more just by picking up a basket.
9. Seemingly Hot Sales
Colorful stickers on shelves draw your eye to items that are currently on sale, and it's hard to resist the pull of a good bargain. But those items aren't necessarily the best deal. Just because something is half-off or "buy one, get one," that doesn't mean you can't find a similar item (especially a generic) that's cheaper, even though it's full-price.
10. Tempting You at the Checkout Line
When you're waiting in line for the cashier, your eye naturally wanders over the gum, candy and snacks along the checkout line. They're small things, and they seem cheap enough, so it's easy to toss them into your cart without thinking much of it. They're almost always discretionary items and impulse purchases.
How to Resist Temptation
With this said, how can savvy shoppers resist the well-planned lure of temptation? Here are a few tips to make your grocery store shopping a success.
1. Shop With a List
Don't enter a store unless you're armed with a list of things you plan to buy during that trip. Don't deviate from that list, even if you see a tempting sale or notice something along an aisle that makes you think, "Hmm, I could probably use that..." If you spot an item that you want to buy, force yourself to return to the store on a future trip to get the item. There's a good chance you won't want it anymore.
2. Do the Math
Use the calculator on your smartphone to figure out the unit price of an item. (Some stores will display it in the corner of the price sticker on the shelf.) This will help you determine if a sale item is really a good deal or not.
3. Limit Your Carrying Capacity
If you only need three things, don't get a basket. If you only need 10 things, get a basket or one of those small two-tier miniature carts. Don't give yourself the ability to buy more; when you've reached your carrying capacity, it's time to check out.
4. Stay Laser-Focused
Head straight for the things on your list, and don't let your eyes wander at flashy end caps or nearby items on the shelves. Imagine you're on a mission to see how little time you can spend in the store. Get in, get what you need, and go home.
Paula Pant is an entrepreneur and real estate investor who has traveled to 32 countries. Her blog Afford Anything is not the same tired, stodgy, uninspired financial advice that you'll find on other websites. Afford Anything shows you how to crush limits, create wealth and maximize life.
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Kids might know money doesn't grow on trees, but many still think it's free. Almost half of the 5-year-olds in an Australian survey of 500 children "thought their parents got free money from a machine in the wall after inserting a card," reports Essential Mums.
Even stranger, 18 percent of 7-year-olds surveyed thought buying something online meant it was free. Since the average cost of raising a child is already more than $245,000, you'll want to quash any ideas of magic, free-money-dispensing machines or free online shopping sprees.
The good news is that it doesn't take much to put kids on the path toward a healthy relationship with money, and that starts with communication.
1. Talk to Kids About Money
Yes, even the stuff you'd rather not admit to yourself, like your savings and debt, as well as what you earn from your job.
"Part of being a good role model includes being open about money (especially as kids get older) and not being afraid to share your money mistakes, in hopes that they won't repeat them," Citi personal finance expert Linda Descano told DailyFinance. Talking to kids about your salary, your grocery budget, even your student loans helps them understand family financial decisions in context.
In my family, we talked about money often, and my sister and I were involved in the family finances from a young age. My mom would let us take turns tracking the electricity meter to see how much we used, and each month we'd color in a chart showing how much we had saved on our bill that month.
If you're saving for something special as a family, involve kids in the planning and budgeting process -- a trip to Disney World might mean more to your children if they see you putting money away. They can also help suggest ways to help save more money toward the trip, like returning bottles and cans, finding grocery coupons or walking the neighbors' dog.
As for when to begin this conversation, financial expert Susan Beacham suggests starting pretty young. "Children as young as age 4 associate the visible accumulation of coins with the abstract concept of saving," she notes. You may not want to share your salary with your 4-year-old, but consider having her help you plan your grocery list.
2. Give Kids an Allowance and Offer Goals
A classic approach to teach kids about money is to pay them to do work around the house or other tasks to earn a regular allowance. This money can motivate children and help them learn about their spending priorities.
Leisha Kelsey, a mother of two, revolutionized the chore-allowance model by adding a "home store" of toys and games coveted by her young kids, with dollar amounts attached. "I was being tortured patiently waiting for them to choose something [at the store with their allowance] when I thought, it would be so much easier for them to work for what they want if they know exactly how much it would cost and how hard they would have to work for it."
Instead, she purchased a few items she knew her kids would love and put them on display at home. When her kids get their allowance every week, they count up their money to see if they've earned enough to buy their desired toy from "the store."
This innovative technique has also led to great discussions with her kids about shopping around. "[It] has also started discussions like, 'I can, but also know that I can get it for $5 less at the other store, do you still want me to get it here or should I wait and pick it up next time I go there?'" explains Kelsey. "Of course they want the best price possible because it makes it easier to earn."
3. Let Children Play Money-Focused Games
If your kids are always grabbing your smartphone or tablet, why not offer them a game that combines financial literacy with a fun challenge?
Renegade Buggies, a free app for kids, launched in February for iOS and Android. "In Renegade Buggies, players navigate a digital course and make real-world decisions in the midst of addictive fun: grab items from a shopping list, collect coins and coupons and watch out for obstacles -- all with the goal of saving as much money as possible," explains the press release.
Looking for more options? You'll find a dozen other games and resources to help kids grasp major financial lessons on the popular blog The Pragmatic Mom. One game, Bite Club, allows teens to learn to save for retirement while running a vampire nightclub after graduating from Vampire University. (Thanks, Twilight!)
4. Teach Them Extreme Couponing -- Kid-Style
One mom gave her second- to sixth-grade kids a great incentive to clip coupons: For every coupon of theirs she used during her grocery shopping, she added that amount to their allowance.
"The kids quickly learned which coupons were used most frequently and could sometimes earn $5 a week or more in spending money," she wrote to Hints From Heloise. "The cutting helped their fine motor skills, and they learned about the calendar, counting, shopping habits (bad and good) and brand recognition. They also gained an awareness of budgeting and the prices of household goods."
5. Let Kids Invest in Stocks
Kids may be able to understand the stock market around age 13 or even earlier. Have them select one or several stocks in which to invest, and consider using cold-hard cash from their allowances rather than make-believe money to help them fully grasp their investment's potential growth or decline.
When you're ready to pick stocks, experts suggest picking names familiar to your children, such as McDonald's, Coca-Cola, Chipotle Mexican Grill or other favorite companies. Get started by asking them a few questions: What are they interested in? What has potential? Teach them to check out each stock's recent performance online.
The Next Steps
Once you're confident in your kids' financial skills, consider KiDebit, a smartphone app that creates a virtual debit card for kids. Parents can add to (or subtract from) the balance as their children earn or spend money, eliminating the need to keep cash on hand for allowances and helping kids learn about the true value of their money and how to spend it well.
What's your favorite strategy for teaching kids about personal finance?
Anthony Harvey/Getty ImagesBeyonce is concerned about the pressure to keep up.By Morgan Quinn
Being your own boss might sound like a dream come true, but starting your own business isn't an easy path. The reality is it takes a lot of sweat, tears, hard work and discipline to be a successful entrepreneur. We found out what some of today's most successful entrepreneurs have to say about the most difficult parts of their jobs.
1. Beyonce: Pressure to Keep Up
Beyonce might seem flawless, but even she struggles to stay calm and collected. "The pressure to keep up the pace can be unbearable, but I try to take it all in stride," she told Island Connections. "I don't think about it. I just do my own thing. I love what I do and there are certain things that come along with it that I don't like, but it's a part of my job."
2. Mark Zuckerberg: Inexperience
One of the world's most recognized entrepreneurs and owner of the largest social media network in history knows you can't find success on your own. "When I was getting started, I didn't want to build a company and I didn't know anything about building companies," he said in a public Q-and-A on Facebook. "The thing that got me through it and I think gets a lot of people through it is the people around them."
3. Larry Page: Being a Manager
Larry Page, cofounder of Google, understands his strengths and weaknesses and says the challenge comes in making up for the difference. "Certainly, I think, the things that I'm missing are more things that you acquire with time," Page said in an interview with the Academy of Achievement. "If you manage people for 20 years, or something like that, you pick up things. So I certainly lack experience there, and that's an issue. But I sort of make up for that, I think, in terms of understanding where things are going to go, having a vision about the future, and really understanding the industry I am in, and what the company does, and also sort of the unique position of starting a company and working on it for three years before starting the company. Then working on it pretty hard, whatever, 24 hours a day. So I understand a lot of the aspects pretty well. I guess that compensates a little bit for lack of skills in other areas."
4. Sergey Brin: Scaling the Company
Google's other cofounder, Sergey Brin, said in the same interview there are many challenges to being an entrepreneur but "one is providing a service that's going to serve millions of people. When we were at Stanford, we had about 10,000 searches per day. Now we serve over 50 million searches per day. That scaling of an infrastructure, that is pretty challenging."
5. Lori Greiner: Dealing With Unethical People
When asked about her biggest challenge in her career in a recent Reddit AMA, this "Shark Tank" investor wrote, "Dealing with unscrupulous people. P.S. -- I have triumphed. Remember, karma is a bitch -- I believe in karma, and I have seen what goes around come back around."
6. Bill Gates: Getting Overwhelmed by Technology
When you run a company like Microsoft, you understand the power of innovation. But small businesses that are just starting out might neglect this critical component of success. "Large companies recognize that effective use of technology is a strategic weapon," Bill Gates told Entrepreneur magazine in a 1999 interview. "This is an area where small business can be overwhelmed and, as a result, may not take advantage of the power of technology available to them."
7. Travis Kalanick: Getting Too Passionate
Entrepreneurs should be careful not to let their passion take over. Uber founder Travis Kalanick knows his intensity can send him down the rabbit hole, as he explained in an interview with Vanity Fair. "Look, I'm a passionate entrepreneur. I'm like fire and brimstone sometimes," he said. "And so there are times when I'll go-I'll get too into the weeds and too into the debate, because I'm so passionate about it." Passion is something all entrepreneurs need -- just be sure to keep it in check.
8. J.K. Rowling: Failure
It's hard to believe one of the most successful authors of all time struggles with failure, but she revealed this in an interview with Oprah Winfrey. "Failure. Failure ... doesn't get spoken about enough," Rowling said. "We speak about success all the time, but, you know, I do not know any -- I haven't met -- and I've been so fortunate and met extraordinary people through Harry Potter, and not one of them didn't have their failure, more than one failure. And it's the ability to resist failure, in many ways, or use failure that often leads to the greatest success, isn't it?"
9. Dr. Dre: Building the Right Team
It took Dr. Dre some time to build the right team to propel him to superstardom. "I'm a perfectionist, but it has a lot to do with the people that are around you," he told Scratch Magazine. "They have to have the same vision, the same motivation. It takes a while to get the right people around you; it takes a long time. But I think I've finally done it, I think this is going to be my crew for a while." Considering Dr. Dre is one of the world's richest hip hop artists, we'd say he's finally done it, too.
10. Mark Cuban: The Word 'No'
Mark Cuban just won't take "no" for an answer. As he told Dave Ramsey, "Every no gets you closer to a yes. It's a numbers game. ... It's just a question of making the calls." With a net worth of $3 billion, we shudder at the thought of his phone bill.
11. Jack Dorsey: Bookkeeping
You've got to love Twitter cofounder Jack Dorsey's total honesty. In an interview with USA Today, he described the panic of starting his new company, Square: "I had no idea what I was doing! I learned as I went, working every shift, every day," he said. "My biggest hurdle was bookkeeping. [I learned by] trial and error. I learned from my mistakes and really listened to customer suggestions. Some of our best-selling items were created by employees and customers."
12. Tory Burch: Confidence
Tory Burch made her fortune helping women feel stylish and glamorous, so it's surprising she would struggle with self-esteem. "Gaining confidence to really believe in myself was a big [challenge]," the designer told Charlie Rose. "I had an article written on our company, the first article. And a great friend called and said, 'It was a great article, but you shied away from the word ambition.' When I thought about it, she was absolutely right."
13. Barbara Corcoran: Fear
"Shark Tank" investor Barbara Corcoran said the biggest enemy of an entrepreneur is fear. "By the time you have 10 years under your belt, you start to realize how many near-death experiences you actually lived through, and it gets scary," Corcoran told Leaders Magazine. "And it gets scarier the longer you go, because you know what you have to lose and that fear becomes your enemy. You're no longer open to the universe and willing to trying a dozen things at once."
14. Charles Schwab: Continuing to Innovate
Charles Schwab might be well into his seventies, but he's not letting anything slow him down. In an interview with USA Today, he said, "The innovation that goes on is just profoundly important -- it continues to be the engine that drives our future. If you're not innovating, you're going to go out of business fairly quickly." In this fast-paced world, you've got to stay nimble and inventive if you want to survive.
15. Oprah Winfrey: Detractors
The queen of daytime television says one of the hardest weeks of her life was starting her new network, OWN -- especially with detractors waiting for her to fail. "I certainly did not expect the velocity of schadenfreude -- meaning people sort of lying in wait for you to fail, or make a mistake," Oprah told ABC News. "I knew from the time I stepped in as CEO, the only way through is that you're either going to have to end it, or you're going to have to make some cutbacks now so you'll be able to go forward."
16. Michelle Phan: Sudden Fame
YouTube star Michelle Phan was an overnight success -- and as you can imagine, she was a little unprepared for her newfound stardom. "Being overwhelmed was my biggest challenge. Growing up, I moved around a lot and didn't make many friends," she told Personal Branding Blog. "I was always the new girl, quiet and doodling all day in my notebooks. Now I had 10,000 friends overnight. I felt this incredible connection with people I had never met nor probably would never meet. But I felt like I knew them and it was both exciting and overwhelming." With over 7.5 million YouTube subscribers, she certainly doesn't have a hard time making friends now.
17. Diane von Furstenberg: Every Day Brings New Challenges
Fashion designer Diane von Furstenberg learned early in life to roll with the punches. She told the Telegraph, "One thing that my mother did, and that is a habit in my life, is that when something unpleasant happens, somehow I deal with it, and then, because I deal with it, I've transformed it into something good," she told The Telegraph. "People ask, 'What are the biggest challenges in your life?' I never know what to say, because every day's a challenge and you just have to embrace it."
18. Kevin O'Leary: Your First Business
Future venture capitalists take note: "To be a successful venture capitalist, you have to have started a business in the past," "Shark Tank" investor Kevin O'Leary told Fast Company. "You need to have gone through the utter terror of getting started. I try to get my entrepreneurs to not make the mistakes that I've made in the past."
19. George Foreman: Starting From the Bottom
George Foreman, the former heavyweight boxer-turned-entrepreneur, described making the transition in an interview with Personal Branding Blog. "The biggest challenge in anyone's life in making yourself a success is understanding that you are at the bottom," Foreman said. "It doesn't matter what business you come into. You start at the bottom and then you can go all the way to the top. But most people are afraid, especially celebrities and people that are already known. So many of us don't want to start from the bottom because that is admitting that you have a long ways to go. The toughest step is to say, 'I'm at the bottom and I got to go up.' Even if you have a lot of money in your pocket, start at the bottom and you can only go up."
20. Wolfgang Puck: Multitasking
A chef doesn't just have to know his way around the kitchen. According to Wolfgang Puck, "A good chef has to be a manager, a businessman and a great cook. To marry all three together is sometimes difficult."
21. Larry Ellison: Outgrowing Your Team
Larry Ellison, CEO of Oracle, explained that one of the hardest parts of his entrepreneurial career was letting go of some of the people that helped him build his billion-dollar company. "Suddenly we hit a wall. We reached a billion dollars in revenue, and we were having serious management problems all over the place," he told the Academy of Achievement. "The people who were running the company, the billion-dollar company, were the same people that had run the company when we were a 15 million dollar company, one-twentieth the size. I had an incredible sense of loyalty to those people who had worked with me to build Oracle. It was a very painful realization in 1990 that I was going to have to change the management team. The company had outgrown the management."
22. Robert Herjavec: Inspiring Your Team
Like other entrepreneurs on our list, "Shark Tank" investor Robert Herjavec is a strong believer in the power of teamwork and leadership. He told Business Insider, "If you can't inspire the people around you, you are going to fail. If you can't inspire the people around you, you should go sell real estate, because that is probably one of the only businesses where you could make a lot of money working completely on your own. But I think if you want to build a great business, you've got to bring other people along, and nobody wants to be managed. People want to be led."
23. Arianna Huffington: A Work-Life Balance
Arianna Huffington may run one of the largest and most successful media groups in the U.S., but she still understands the importance of a work-life balance. "At this point, success, money, and power have practically become synonymous in the minds of many. This idea of success can work -- or at least appear to work -- in the short term," she said. "But over the long term, money and power by themselves are like a two-legged stool -- you can balance on them for a while, but eventually you're going to topple over. And more and more people -- very successful people -- are toppling over. To live the lives we truly want and deserve, and not just the lives we settle for, we need a third metric, a third measure of success that goes beyond the two metrics of money and power, and consists of four pillars: well-being, wisdom, wonder and giving."
Doug McSchooler/APThousands of opponents of Indiana Senate Bill 101, the Religious Freedom Restoration Act, gathered for a protest Saturday on the lawn of the Indiana State House.
INDIANAPOLIS -- Indiana Gov. Mike Pence defended the new state law that's garnered widespread criticism over concerns it could foster discrimination and said Sunday it wasn't a mistake to have enacted it. Pence appeared on ABC's "This Week with George Stephanopoulos" to discuss the measure he signed last week prohibiting state laws that "substantially burden" a person's ability to follow his or her religious beliefs. The definition of "person" includes religious institutions, businesses and associations.
Since the Republican governor signed the bill into law Thursday, Indiana has been widely criticized by businesses and organizations around the nation, as well as on social media with the hashtag #boycottindiana. Already, consumer review service Angie's List has said it will suspend a planned expansion in Indianapolis because of the new law.
The Same Question Asked Six Times
Pence did not answer directly when asked six times whether under the law it would be legal for a merchant to refuse to serve gay customers. "This is not about discrimination, this is about empowering people to confront government overreach," he said. Asked again, he said, "Look, the issue here is still is tolerance a two-way street or not."
Michael Conroy/APIndiana Gov. Mike Pence.
Pence told the Indianapolis Star on Saturday that he was in discussions with legislative leaders over the weekend and expects a clarification bill to be introduced in the coming week. He addressed that Sunday, saying, "if the General Assembly ... sends me a bill that adds a section that reiterates and amplifies and clarifies what the law really is and what it has been for the last 20 years, then I'm open to that." But Pence was adamant that the measure, slated to take effect in July, will stick. "We're not going to change this law," Pence said.
Some national gay-rights groups say it's a way for lawmakers in Indiana and several others states where such bills have been proposed this year to essentially grant a state-sanctioned waiver for discrimination as the nation's highest court prepares to mull the gay marriage question.
Supporters of the law, including Pence, contend discrimination claims are overblown and insist it will keep the government from compelling people to provide services they find objectionable on religious grounds. They also maintain courts haven't allowed discrimination under similar laws covering the federal government and 19 other states. Arkansas is poised to follow in Indiana's footsteps, with a final vote expected next week in the House on legislation that Republican Gov. Asa Hutchinson has said he'll sign.
Obama Spokesman Cites Damage Control
Josh Earnest, President Barack Obama's spokesman, appeared on "This Week" just after Pence, and said the debate isn't a political argument. "If you have to go back two decades to try to justify what you're doing today, it may raise questions," Earnest said, referring to the 1993 federal law Pence brought up. He added that Pence "is in damage-control mode this morning, and he's got some damage to fix."
State Rep. Ed DeLaney, an Indianapolis Democrat, told a large, boisterous crowd Saturday gathered outside of the Statehouse to protest that the law creates "a road map, a path to discrimination." Rally attendees chanted "Pence must go!" several times and held signs that read "No hate in our state."
Pence addressed the critics Sunday, saying: "This avalanche of intolerance that's been poured on our state is just outrageous." Asked if he would be willing to add sexual orientation to the list of characteristics against which discrimination is illegal, he said, "I will not push for that. That's not on my agenda, and that's not been an objective of the people of the state of Indiana."
Reaction From Politicians, Businesses
U.S. Sen. Joe Donnelly, a Democrat, released a video statement on his Facebook page Saturday, saying: "We'll work together to reverse SB101 and we'll stand together to make sure that here in Indiana, we welcome everyone, every day."
Indianapolis Mayor Greg Ballard, a Republican who opposed the law, has said he and other city officials will talk with businesses and convention planners to counter the uproar.
Angie's List had sought an $18.5 million incentive package from Indianapolis' City-County Council to add 1,000 jobs over five years. But founder and CEO Bill Oseterle said in a statement Saturday that the expansion was on hold "until we fully understand the implications of the freedom restoration act on our employees."
The Indianapolis-based NCAA has expressed concerns about the law and has suggested it could move future events elsewhere; the men's Final Four will be held in the city next weekend.
Associated Press writers Tom Davies and Rick Callahan contributed to this report.
Every so often, you read about someone hitting it big on eBay. They've somehow stumbled upon the secret recipe to success, one that lets them shop garage sales for a living and spend most of their days in their pajamas.
While these stories seem almost as unlikely as people making millions off YouTube videos, they are real. Some people do, in fact, make enough money on eBay, Amazon and other online shops to live well. Here are some ways to make it work for you.
Decide What to Sell
Deciding where to sell and what to sell is a bit of a chicken-or-the-egg conundrum. Different venues are better for certain items. So do you decide where you want to sell and then pick an item that works well on that platform? Or do you decide what you want to sell and then find a website well-suited to that item?
For this article, we'll start by discussing what to sell first. Essentially, you have two choices: collector arbitrage and retail arbitrage. Don't let the word arbitrage throw you off. It simply means buying something in one place and then turning around and selling it right away somewhere else, hopefully for a profit.
Collector arbitrage: This category refers to buying and selling items from private sources. Those sources could be garage sales, thrift stores, flea markets and local auctions. While you could certainly sell collectibles for profit, collector arbitrage doesn't refer exclusively to them. You could buy and sell clothes, movies, music, household goods or anything else you find that's in demand.
Retail arbitrage: This is the same idea as collector arbitrage, except you'll be buying from retail stores rather than third parties. If you live for clearance sales and going out of business liquidation events, this type of arbitrage is for you.
While you could buy and sell items of every kind, your life may be easier and your profits greater if you focus on a specific category. By specializing, you can gain expertise on what items are in demand and what prices they fetch. Then you can quickly zero in on products that will be money-makers and bypass those that will probably sell for a loss.
Where You Can Sell Online
Once you have a good idea of what you want to sell, you need to pick the right venue. Here are four websites you may want to consider.
eBay:Ebay offers a huge market with lots of potential customers, but that can also translate into more competition. Items can be sold as auctions or in fixed-price listings.
Amazon: Virtually anything can be sold on Amazon nowadays. Third-party listings may not get the same visibility as they would on other sites though. On the plus side, Fulfillment by Amazon lets you ship most items to the company and have them pack and ship products for you when individual orders come through.
Half: Owned by eBay, Half.com can be an easy way to sell books, music and movies. There's no need to take photos or write long descriptions. However, the traffic on this site may not be as good as what you'd get at eBay or Amazon.
Etsy: It used to be that only handmade items could be sold on Etsy, but it has since expanded to allow the sale of items that are at least 20 years old. If you decide to buy and sell antiques or older collectibles, Etsy might be a good venue for your sales.
Finding Items That Sell Best Online
As you're scouting out local finds, you want to be careful not to overpay. To make it worth your time, ideally you only want to pay 10-20 percent of what an item is selling for on eBay or whatever online venue you've chosen.
Hopefully you've done enough research that you know, off the top of your head, the going prices in your niche. But if you run across something new or get stumped, don't hesitate to pull out your smart phone and do some on-the-spot research.
Also, test drive new items by only buying a couple to start. The pressure cookers at your discount store may be a steal, but you don't want to clear the shelf until you know there's a market for them online. Finally, don't overlook an item's dimensions and weight. Excessive shipping charges can scare away potential customers. In addition, delicate items that are prone to break may be more trouble than they're worth.
Special Considerations for Electronics
With technology changing rapidly, you may assume last generation's devices are worthless. That may be true sometimes, but there is a market for old, and even broken, electronics.
What do you think about buying locally and selling globally? Or do you do it already? Tell us all about it in the comments below or on our Facebook page. Like this article? Sign up for our newsletter and we'll send you a regular digest of our newest stories, full of money saving tips and advice, free! We'll also email you a PDF of Stacy Johnson's "205 Ways to Save Money" as soon as you've subscribed. It's full of great tips that'll help you save a ton of extra cash.
In my early 20s, I made a ton of financial mistakes. From maxing out credit cards, to delaying my savings, I got off to a rocky start. You don't have to get off to a rocky start, though. These 20 rules for finances in your 20s should help you get things in order before you head into your 30s:
1. Avoid Credit Card Debt
One of the best things you can do for your finances long term is to avoid credit card debt. Make it a point to have the money in your account before you charge something. High-interest credit card debt can ruin your finances over time, leaching away your wealth.
2. Only Borrow What You Need for an Education
I had a full-tuition scholarship (because I joined the National Guard) and a cushy job in the mall at GNC. With all of my resources, there was no reason for me to take out the maximum in student loans. But I did anyway.
While you you might need to borrow to fund your education, don't take more than you need to make it work. The smaller your debts, the better.
Then, when you're done with school and looking to repay your loans, make sure you understand what you're getting into. Too many people are getting caught up in student loan consolidation scams, and just wasting money that could have been spent on their student loan debt. Remember, once you graduate you have to pay back the loans.
3. Be Careful about Borrowing for Anything Else
Whether it's a house or a car, be careful about borrowing. The rule about only getting what you need applies for all your loans. Yes, you will probably need to borrow if you want to pay for a house. But you don't need to go overboard. Modest homes and modest cars, bought with solid down payments, are your best choice.
4. Pay Attention to Your Credit
Just because you shouldn't rack up credit card debt doesn't mean that you should ignore credit cards and other forms of credit. Building a good credit history can help you in a number of ways. Good credit is about more than getting the best interest rate on a loan (something that can save you thousands of dollars over your lifetime). Your credit is used to determine insurance rates and security deposits. A version of your credit report might also be part of your background check for a job. The fastest way to establish good credit habits is to get a credit card and use it once or twice a month for items you can pay off.
5. Pay All Your Bills On Time
As a fledgling adult, you are now responsible for many of your own costs. It's vital that you pay all your bills on time. You don't want miss payments for utilities, your phone plan or other items. Missed payments can have far-reaching consequences.
6. Open a Checking Account on Your Own
At some point in your 20s, you should open a checking account on your own. This means that you ditch the old join account with your parents and start managing your own finances. Look for a free checking account (many banks and credit unions offer student accounts that come with benefits), so you don't have to worry about fees.
7. Open a Savings Account
While you're at it, open a savings account. Look for a high-yield account. Set up a regular schedule for adding money to your savings account. Even if it's only a few dollars a week, the important thing is to get in the habit of saving.
8. Open a Retirement Account
The sooner you start saving for retirement, the better off you'll be. You can end up with thousands more in your nest egg if you start investing in your 20s, rather than waiting until you are in your 30s. As soon as you start earning income, open a retirement account. If you can't get a retirement account through your job (perhaps it's part-time), open an Individual Retirement Account. Anyone with earned income can contribute to an IRA.
9. Learn about Investing
Now is a great time to learn about investing. Find out how you can use money to improve your returns. Get the basics of how to invest in low-cost funds, as well as how you can use dividend stocks to your advantage. When you understand the basics of investing, you are better able to build wealth over time. Learn how you can use a taxable investment account -- in addition to your tax-advantaged retirement account -- to boost your wealth.
10. Purchase Life Insurance
Probably the last thing on your mind in your 20s is life insurance. Ewwww! That's something that only old people need to talk about.
But the truth is, you can get a much better rate on life insurance while you are young and (probably) healthy. If you plan to start a family sometime in the next decade or so, getting life insurance now can be a good way to lay the foundation for financial protection for your family. It's possible to find inexpensive term life insurance that provides adequate coverage for 20 to 40 years, depending on the length of term you choose.
And just because you take out a 30-year term policy today doesn't mean you have to continue to pay on it. Since life insurance is an unlilateral contract, you can stop it at any time. But remember, since most policies are super cheap (around $15 per month for $250,000 of coverage), it would be silly to ever stop paying on the policy.
11. Develop Marketable Skills
It's not necessary to go to college if you want a good job. However, you do need marketable skills. Consider which skills you can develop that might be in demand. There are plenty of certifications that can provide you with a good job -- and you don't have to go to school for four years. Make yourself marketable, and you'll be more likely to find a job, even in a down economy.
12. Consider a Side Hustle
Even the most marketable of us run the risk of being jobless if economic conditions are especially difficult. A side hustle can help you diversify your income. Consider starting up a small side business that can help you cultivate an alternative income stream so that you don't have to rely too heavily on a single source of income.
A side hustle I failed at was real estate. I could have given up, but that led to me starting my blog, which has been a great side hustle. Don't give up after one attempt.
13. Give to Others
Well-rounded finances include efforts to help others. Whether you give money to your church, donate to charity or volunteer, you can give of yourself. Efforts to give to others generally result in better financial management, and can even expose you to new opportunities.
14. Start Building a Network
Developing people skills is an important part of marketing yourself for future career and financial opportunities. Take advantage of internships, campus organizations, community organizations and other opportunities to meet people. Build relationships now, and you might be surprised at how helpful they can be later. But whatever you do, do not make these networking mistakes.
15. Establish Your Priorities
Think about what you value, and what is important to you. Now is a great time to establish your spending priorities. Consider how you want to use your money, and what you want your money to accomplish on your behalf. Then, instead of wasting money on the things that don't matter to you, you can use your money to purchase things and experiences that are important.
16. Create a Spending Plan or Budget
Put together a plan for your money. Base your spending plan or budget on your priorities. Understand your cash flow so that you know how much money you have coming in each month, and what expenses need to be paid as well. You don't need to account for every dollar (although that can help), but you do need a plan that helps you stay on track, and that allows you to meet your goals.
17. Talk Finances with Your Significant Other
Chances are that you will meet a life partner while you are in your 20s. When things start getting serious, you need to talk finances. Whether you plan to move in together or get married, you need to talk about your money habits, share the realities of your situation and make plans. If you are sharing your life with someone, you also need to figure out how you will manage your finances together (even if you keep separate accounts).
18. Get Used to Saving Up for Big Purchases
Now is a great time to develop the habit of saving up for major purchases. Rather than buying things on credit, practice saving up for things like computers, vacations and even your wedding. While you can benefit by buying things with a credit card, make sure that you have the money saved up in advance so that you can pay off your card and avoid carrying a balance.
19. Learn to Cook
I would never suggest that you eschew eating out altogether. After all, I enjoy eating out. However, eating out all the time can lead to health problems and can drain your finances. Learn how to plan meals,and how to cook, and you'll be healthier and saving money. Good health is one of the best money-savers (plus, you get to enjoy your money), and learning to plan and cook healthy meals can go a long way toward maintaining a good quality of life.
20. Learn to Say No
Know how to say no. This means that you might have to say no to a purchase you want (or at least put it off). Sometimes it means saying no to loved ones as you attempt to make time for yourself and your job. Sometimes, it even means saying no to a job that isn't working for you. Learning how to say no -- and knowing when to use this word -- can help you use your financial resources more effectively.
Several years ago I had to say no to my mom when she was trying to get me to go into a real estate investment deal with her. Even though I didn't have a good feeling about it, it was so difficult to say no to her. I was fortunate that I did, especially since the deal went south and would have ruined my credit.
Steve Helber/AP
From the leader in agricultural chemicals stepping up to post its latest earnings report to analysts expecting another strong quarter out of used-car seller CarMax, here are some of the things that will help shape the week that lies ahead on Wall Street.
Monday -- Book It
The new trading weeks kicks off with Books-a-Million (BAMM) posting quarterly results. The book-selling superstore chain outlasted Border, and it surprisingly hasn't had to follow niche leader Barnes & Noble (BKS) into e-readers, digital bookstores and even college campuses.
This doesn't mean that things are going well for the chain of 257 stores. Folks aren't buying physical books the way that they used to, and Books-a-Million has posted declining sales in five of the past six fiscal years. It also has clocked in with losses in six of the past seven quarters. The silver lining here is that this is the holiday quarter that's being reported, and the chain has historically turned a profit during the one time of year when folks actually buy books and other lit-minded products as gifts.
Tuesday -- DISH It Out
There will be a change at the helm of DISH Network (DISH) on Tuesday, but the new CEO is a familiar one. Chairman and co-founder Charlie Ergen will return to lead the country's second-largest provider of satellite television at the end of March.
Ergen stepped down four years ago, choosing to focus his efforts on DISH Network's spectrum purchases and forays into wireless. Joe Clayton took over as CEO in 2011, and now Clayton will hand that hat back to Ergen on Tuesday.
Wednesday -- GMO-a-Go-Go
Monsanto (MON) has its fair share of critics, so why not have some fun and report quarterly results on April Fools' Day? The agricultural chemicals giant is expected to post a slightly lower profit on slightly lower sales for the period than it earned a year earlier.
Monsanto is naturally a polarizing company. Bears will argue that genetically modified organisms pose potential health risks in our food supply. Bulls will counter that major health groups haven't confirmed those health risks, and that modified seed traits create more bountiful harvests that help feed more of the world. It's a controversial name, and it will get a chance to turn heads ahead of the market open on Wednesday.
Thursday -- Brakes and Accelerators
It will be CarMax (KMX) reporting on Thursday. The leading seller of used cars has helped clean up the negative connotations that have plagued dealers peddling secondhand automobiles. CarMax offers large and clean showrooms, backing that up with haggle-free pricing.
Drivers are gravitating to the value of well-maintained used cars. Wall Street's holding out for a quarterly profit of 60 cents a share out of CarMax, well ahead of the 52 cents a share it posted a year earlier. They also see a double-digit uptick in revenue.
Friday -- Last Call for Peeps
The major trading exchanges in the U.S. are closed in observance of Good Friday, and naturally, stateside companies won't be stepping up with fresh financials. Some people will use the holiday to head out to the corner multiplex, where the big premiere on Friday will be "Furious 7." The "Fast and Furious" muscle-car franchise has revved up box office sales through its first six incarnations, and the latest and likely final installment -- with star Paul Walker dying in 2013 -- should also have a big run during its theatrical release.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends CarMax. The Motley Fool owns shares of Barnes & Noble and CarMax. Try any of our Foolish newsletter services free for 30 days. Is your portfolio ready for what 2015 has to offer? Check out our free report for one great stock to buy for this year and beyond.
Mercedes-BenzThe F 015 concept car shows Mercedes-Benz's vision of a self-driving luxury car.
Is Apple (AAPL) really preparing to build a car? Reports in the Wall Street Journal, the Financial Times and elsewhere have suggested that the Silicon Valley trend-setter is at least researching the possibility.
If Apple were to build a car, it's a safe bet that it would be a technological wonder, with cutting-edge self-driving technology and smooth electric drive. It might even be the basis of a car service, one that could change the way many of us interact with cars.
It might very well take the world by storm, and leave most of the global automakers scrambling to catch up. But at least one automaker plans to be ready: Mercedes-Benz is already showing off a technological wonder-car of its own.
Mercedes-Benz
A Very Different Kind of Mercedes-Benz Luxury Sedan
German luxury-car giant Mercedes-Benz surprised industry-watchers when it unveiled its F 015 "Luxury in Motion" concept car at the Consumer Electronics Show in Las Vegas back in January.
The F 015 is Mercedes' vision of what a self-driving luxury car might look like once the technology is mature. The company is convinced that the advent of autonomous cars will "bring about major changes" and that "the car is growing beyond its role as a mere means of transport and will ultimately become a private retreating space," as it said in a recent statement.
That idea drove the design of the battery-electric F 015, which doesn't look like any car you've ever seen. In fact, it's more like a luxurious private lounge on wheels than it is a conventional car.
The car's side doors open wide to reveal an interior lined in wood and rich leather, with four lounge chairs that can rotate to allow the passengers to sit face-to-face. The car's settings are controlled by big touchscreens set in the doors and dash, And while the car is clearly intended to drive itself, a steering wheel and pedals are provided so that a driver can take manual control.
The F 015 Is a Show Car, but Some of Its Technology Is Already Here
Of course, the F 015 is a show car, and many of its details are designers' flights of fancy. But think of it this way: It's an expert's view of how cars might evolve over the next 10 or 15 years.
Parent company Daimler (DDAIF) has made big investments to ensure that Mercedes is a leader in the self-driving revolution, if and when it comes. In fact, there's already a Mercedes on the market that can drive itself -- albeit only in limited circumstances, for now.
Called "Intelligent Drive," the Mercedes system consists of a variety of "smart" safety features. Many are familiar to new-car buyers: blind-spot warnings, parking assist and so forth. But under limited circumstances -- stop-and-go highway traffic -- some versions of Mercedes' big S-Class sedan can drive themselves: The system can be set to maintain a safe distance from the car in front of you and to keep itself from wandering out of the highway lane. All by itself.
Automakers, Regulators Carefully Step Toward Self-Driving World
For now, the biggest challenge facing self-driving technology is the law. It's not yet legal to run a self-driving car on most U.S. roads. That's why Tesla Motors (TSLA), which is releasing an "autopilot" feature for its cars this summer, will limit it to highway driving, much like Mercedes' system -- at least, for now.
More automakers are planning to jump in with similarly limited self-driving features soon. Both Audi and Cadillac are expected to release automated highway-driving systems like Mercedes' within the next year or two, and most other automakers have similar products under development.
Once perfected, self-driving technology could make car accidents much less common. But the risks of a less-than-perfect system are obvious, and nobody wants the imperfections exposed on, say, a busy highway at rush hour. That's why automakers (and lawmakers) are taking baby steps for now. And that's why, for now, a car like the F 015 is just an idea. But it's not quite science fiction: The technology to build such a car is not very far away. The big question is, will consumers -- and lawmakers -- want it?
Motley Fool contributor John Rosevear owns shares of Apple. The Motley Fool recommends and owns shares of Apple and Tesla Motors. Try any of our Foolish newsletter services free for 30 days.
