With billions at your disposal, what on Earth is worth buying? The answer might lie more than 238,000 miles away. With a global venture capital conglomerate, multinational banking corporation and Caribbean island between them, Sir Richard Branson and Chase Bank are making headlines for their new partnership to build the first bank on the moon.
Citing the lack of access astronauts visiting the international space station have to their bank accounts -- not to mention the abysmally small ATM network in space -- Branson and Chase are partnering to build a financial institution that will only be increasingly in demand as space exploration advances.
Warren Buffett Casts Doubt on Moonshot Idea
"As an entrepreneur, I've always wanted to adventure into new terrain," Branson told The Associated Press. "I already own an island, I have $5.1 billion to my name. ... I'm not in this for the money. I'm looking for the next way to connect people."
Fellow billionaire and CEO of Berkshire Hathaway Warren Buffett was not as optimistic. "I believe in investing in things I understand," Buffett said. "The sheer cost and technology required for this venture, the huge risk -- it's admirable, sure. But it's a risk I'd rather someone else takes. What's the proven return on an extraterrestrial bank? Nothing."
According to Branson, the moon bank is an estimated $150 million investment, covering $100 million to get to the moon, $1.3 million to build the branch and $49 million dedicated to staffing it and providing essential resources. Experts, however, say the whole production could cost 10 times that amount, given the many possible things that could go wrong while building a Chase bank in outer space.
Branson is undeterred by skeptics. "It's like pitching the Internet in the 1800s," he told The AP. "This idea is too far from the current reality to invest in for most, but at Virgin Group we've never followed the norm. We're innovative." Between Branson's reported $5.1 billion net worth and JPMorgan Chase's estimated $98 billion in annual revenue, the backers have a lot to throw at innovation.
Moon Bank to Feature All Earth Currencies
Of the circulating currencies on Earth, Chase Bank's moon branch will feature everything from Kuwaiti dollars (currently worth 3.5 U.S. dollars) to the Iranian rial (28,000 to the dollar) and the even the Canadian dollar (sometimes more than a U.S. dollar, sometimes less -- it's kind of loonie, isn't it?).
JPMorgan Chase CEO Jamie Dimon told The AP he was practically giddy about the lack of regulation in space. "We'll hold a monopoly over a region with no set rules," he said. "The risk is there of course, but the payoff could be unimaginable if we can provide the only service 100,000 miles."
Rumors are flying over what the bank will be called -- never fear, the most popular guess, Outer Chase Bank, already has its own Twitter account. The bank is expected to offer its full range of services by December 2017, in time for that year's expected supermoon.
This is a satirical article for April Fool's Day. Sir. Branson will not, as far as we know, be launching any outer space ventures in the immediate future, whether or not they're backed by Chase. As of 2015, there is no place you can easily obtain the Canadian dollar in outer space. Warren Buffett was not reached for comment, though we feel certain he would disapprove of extraterrestrial banking, as he hasn't even wrapped his head around Bitcoin yet. If Jaime Dimon is giddy, we don't know why.
Kzenon/Shutterstock
SEATTLE -- Amazon.com is introducing a referral service to help people to get projects and chores done around their homes.
The recommendation system, called Amazon Home Services, marks the e-commerce company's latest attempt to expand its empire beyond online shopping. It debuted Monday across the U.S. after several months of testing in New York, Los Angeles and Amazon.com's home city of Seattle.
Amazon.com's move poses a potential threat to other online referral and business rating services, including Angie's List, Yelp and Thumbtack, a startup that raised $100 million last year from a group of backers led by an investment arm of Google.
About 700 different services in major U.S. cities can be booked through Amazon.com, spanning from housecleaning to goat grazing. Amazon.com isn't charging consumers a fee to use the service. Instead, the company will collect a commission ranging from 10 percent to 20 percent from most of the professionals.
Amazon Vets Listed Professionals
All professionals listed in the service are vetted by Amazon.com, which is also guaranteeing all the work. Amazon.com believes connecting consumers with handymen and home-maintenance specialists will prove to be a logical extension to its e-commerce business because about 85 million of its customers buy products that require installation or periodic servicing.
Investors haven't always approved of Amazon.com's efforts to diversify outside of online shopping, a push that has seen the company branch out into making a variety of gadgets and running an Internet video service. The investments in the other projects have shrunk Amazon.com's profits and sometimes lumped the company with losses to the dismay of its shareholders.
By his mid 30s, Darren Star was already a massive success in television, having created "Beverly Hills, 90210" and "Melrose Place." But his greatest achievement was yet to come: "Sex and the City." In AOL's original series "Inspired," Darren discussed creating the show, what his aspirations were, and how the series and its subsequent films exceeded all of his expectations.
" 'Beverly Hills 90210' and 'Melrose Place' were big popular successes," he told AOL. "But I loved the idea of working at a network where the bar was all about how good the show was, not what your numbers were."
Star also discussed the moment in an early episode when he realized that "Sex in the City" would fulfill its promise. "I remember being in the editing room and watching this episode where all the women were all off on their separate journeys. But at the end of all these separate journeys they all met each other at this movie theater," said Star. "And I thought wow: that to me is the heart of the show. It's about how they can have these struggles, and be beaten up, and have their ups and their downs, but in the end they're just all kind of coming and being there for each other."
NEW YORK -- McDonald's (MCD) says it is simplifying its grilled chicken recipe to remove ingredients people might not recognize, marking the latest sign the company is rethinking its menu to keep up with changing tastes.
The company says it expects the new "Artisan Grilled Chicken" to be in its more than 14,300 U.S. stores by the end of next week, in products including a new sandwich, as well as existing sandwiches, wraps and salads.
It says the biggest change is the removal of sodium phosphates, which it said was used to keep the chicken moist, in favor of vegetable starch. The new recipe also does not use maltodextrin, which McDonald's said is generally used as a sugar to increase browning or as a carrier for seasoning.
Jessica Foust, director of culinary innovation at McDonald's, said the changes were made because customers said they want "simple, clean ingredients" they are familiar with.
"Maltodextrin is just not something they have in their pantries," Foust said.
The change comes as McDonald's fights to hold onto customers amid the growing popularity of places like Chipotle Mexican Grill (CMG) that position themselves as more wholesome alternatives to traditional fast-food.
Already, that "clean label" trend has prompted numerous restaurant chains and packaged food makers to reformulate products, even while standing by the safety and quality of their previous recipes. Subway also introduced a new grilled chicken recipe earlier this year that it said had no artificial flavors or preservatives. And Panera Bread (PNRA) has said it plans to purge artificial colors, flavors and preservatives from its food by 2016.
As ingredient quality becomes a more powerful marketing advantage, executives at McDonald's have also been trying to freshen up the company's image and shake perceptions that it serves junk food. TV ads and signs in stores, for instance, are playing up the fact that Egg McMuffins are made with freshly cracked eggs. And last month, McDonald's announced it would start asking suppliers to curb the use of antibiotics in raising chickens.
It's a very real chicken experience -- something closer to what you make in your own home.
As for the new grilled chicken recipe, McDonald's said it will now also be cooked with a blend of olive oil and canola oil and herb seasoning. Previously, it was cooked with liquid margarine, which included "artificial flavor" and the preservatives sodium benzoate and potassium sorbate as ingredients. Foust said she thinks customers will notice that it has "more of a lemon herb type flavor."
"It's a very real chicken experience -- something closer to what you make in your own home," she said.
Roger Clemens, an adjunct professor of pharmaceutical sciences at the University of Southern California's School of Pharmacy and a former president of the Institute of Food Technologists, said sodium phosphates could be used to help chicken keep its moisture and texture when it's being frozen and shipped.
"If you're going to cook a fresh chicken, it's not a big concern. But if you're going to ship a chicken, there's a change in structure," he said.
Maltodextrin, meanwhile, might be used as a coating on chicken to distribute seasonings evenly, he said.
On its website, McDonald's lists ingredients for its new "Artisan Grilled Chicken" including salt, vegetable starch, sugar, garlic powder, lemon juice concentrate, honey and onion powder. Terri Hickey, a McDonald's representative, said the new chicken filet will have 12 ingredients, not including the cooking ingredients. The previous filet recipe had 18 ingredients.
Mike Andres, who took over as president of McDonald's USA last year amid ongoing sales struggles, had said in December the company was looking at shrinking its ingredients lists.
Whether the new grilled chicken recipe helps change perceptions about the food at McDonald's remains to be seen. The change comes after McDonald's Corp. saw sales and customer visits at established U.S. restaurants slip two years in a row. In January, the company named Steve Easterbrook, its chief brand officer, to take over as CEO for Don Thompson. That change took effect in March, right before a "Turnaround Summit" for U.S. franchisees.
When it comes to savings and splurging, there are some items you should never spend extra for. If you're watching your budget, think twice when you're paying for these items.
Fancy name-brand shampoos and moisturizers, for instance, are not worth the price. Advertisers want you to pay big bucks for these items, but there have actually been no studies to support that expensive face creams do better than drugstore brands.
Unless you're attached to a particular scent, there's no real reason to splurge on a top-brand shampoo. Mass brand drugstore products are actually on par with expensive brands because they have millions of dollars to spend on cutting edge research. So, save some dough and stick to drugstore brands.
Designed glasses, the kinds you find in stores, are also not worth splurging on. You'll be paying inflated prices on those fancy specs -- and there's more. It turns out that 90 percent of all designer glasses are manufactured by the same single company, so there's really not that much of a difference between a $40 pair and a $400 pair. It's best to steer clear of designer glasses all together and shop for off-brand glasses online instead.
Ready to shop? Think twice before you pay that price. You can save money just by avoiding brand name items.
NEW YORK -- Walmart (WMT) is asking suppliers to cut back on advertising spending in its stores as it seeks lower prices on goods that it sells to its own customers.
The request comes as the world's largest retailer, with more than 4,500 stores run from Bentonville, Arkansas, looks to reclaim its position as the low-price leader amid stiff competition and perk up sluggish sales in the U.S.
Historically, makers of consumer products like laundry detergent devote a portion of their budget to market their products at Walmart -- whether it's online advertising on social media or store displays. Walmart executives told suppliers in February they would rather have them reinvest some of that money. Walmart's actions were first reported by The Wall Street Journal.
Deisha Barnett, a Walmart spokeswoman, confirmed the strategy and said that the discounter has made that request in the past but described the recent overture as more of a "reinvigorated focus."
Investors Updated on the Plan
Walmart updated investors Wednesday on how it planned to reduce prices while revving up its assortment and improving the experience of shoppers by the holiday 2015 shopping season, the most important period for a retailer. The actions are being spearheaded by Greg Foran, who last summer became CEO of Walmart's U.S. business, which accounts for 60 percent of its total sales. "We want this year to be the year of improving our stores," Foran told investors.
Foran, who had been president and CEO of Walmart Asia, has been dissecting every part of the business, from improving the freshness of the produce to making sure merchandise is being unloaded onto the selling floor, instead of having it pile up in the back room.
Among other measures it outlined Wednesday: reducing the price of products nearing their expiration date, a strategy it believes alone will save $500 million annually. The company said that it's also looking at how it sources it products so it can reduce prices, particularly as commodity prices fall. When asked about the latest development with suppliers, Foran just said that the company has always negotiated the best price and passes those prices to customers.
Wages Going Up
Walmart has acknowledged that it took some steps to increase productivity like reducing labor in the stores that ended up backfiring. But the company is working to rectify that issue. In February, it announced that it was raising the starting wage to at least $10 by February 2016 and improving its training for its hourly workers. It also said it was bringing back the department manager to be in charge of one specific area of merchandise.
Walmart eked out two quarters of consecutive revenue increases at stores opened at least a year in the U.S, after seven quarters of declines. Shares fell $1.44, or nearly 2 percent, to $80.81 in afternoon trading Wednesday.
Spencer Platt/Getty ImagesTraders work on the floor of the New York Stock Exchange on Wednesday as website hosting service GoDaddy makes its IPO.By Caroline Valetkevitch
NEW YORK -- U.S. stocks eased Wednesday as weaker-than-expected economic data spurred concerns over growth ahead of Friday's jobs report and first-quarter earnings.
Leading the day's declines for a second day was the S&P health care sector, which fell 1.2 percent. Health care was the strongest sector in the first quarter, appreciating 6.2 percent.
Shares of automakers also declined after reporting March sales. Shares of General Motors (GM) were down 2 percent at $36.74 while Ford (F) was down 1.4 percent at $15.91 as sales fell at both companies.
People continue to have concerns about earnings weakness and economic weakness.
U.S. private employers added the smallest number of workers in more than a year in March and factory activity hit a near two-year low, fresh signs that economic growth slowed significantly in the first quarter.
The reports precede Friday's jobs data, the most widely watched indicator of the week, though that arrives on Good Friday when the stock market will be closed.
Investors also are anxious ahead of the start of first-quarter earnings, which strategists say could be hurt by the rising dollar's impact on multinational companies. Estimates for first-quarter earnings have fallen sharply since Jan. 1, Thomson Reuters data showed.
"People continue to have concerns about earnings weakness and economic weakness," said Stephen Massocca, chief investment officer at Wedbush Equity Management in San Francisco.
The Dow Jones industrial average (^DJI) fell 77.94 points, or 0.44 percent, to 17,698.18,the Standard & Poor's 500 index (^GSPC) lost 8.2 points, or 0.4 percent, to 2,059.69 and the Nasdaq composite (^IXIC) dropped 20.66 points, or 0.42 percent, to 4,880.23.
The S&P 500 and Nasdaq finished their ninth straight quarter of gains Tuesday, while the Dow dipped for the quarter.
Stocks Making Moves
Shares of Monsanto (MON) were up 3.9 percent at $116.96 and the stock was among the biggest positive influences on the S&P 500 after its results and forecast.
Energy shares also gained along with oil prices. ConocoPhillips (COP) was up 1.2 percent at $63.02.
NYSE advancing issues outnumbered declining ones 1,621 to 1,416, for a 1.14-to-1 ratio; on the Nasdaq, 1,449 issues fell and 1,280 advanced, for a 1.13-to-1 ratio favoring decliners.
The benchmark S&P 500 posted 7 new 52-week highs and 4 new lows; the Nasdaq composite recorded 76 new highs and 59 new lows.
About 6.9 billion shares changed hands on U.S. exchanges, above the 6.5 billion daily average for the last five trading sessions, according to BATS Global Markets.
What to watch Thursday:
CarMax (KMX) releases quarterly financial results before U.S. markets open.
At 8:30 a.m. Eastern time, the Labor Department releases weekly jobless claims, and the Commerce Department releases international trade data for February.
At 10 a.m., the Commerce Department releases factory orders for February, and Freddie Mac releases weekly mortgage rates.
I launched my own location-independent business in May of 2013, and I am now unemployable. Don't get me wrong, I've never received more job offers than I have in the past year, but I love working for myself so much that I can never put on a suit, wake up at 6:30 a.m. and commute 30 minutes to an office job ever again.
My life didn't always look this way. And my college degree was definitely not on a clear path to entrepreneurship as a financial planner. I was a theater and choir kid all through high school. (If "Glee" would have been around then, I would have been so cool. But "Glee" was not around, and I was not cool.) In college, I double-majored in theater performance and women's studies.
Today I'm a financial planner for millennials, and I work virtually with clients in their 20s and 30s across the country. When I first started taking my certified financial planner classes, I was so embarrassed to tell people my majors. But my past experience in theater, women's studies and therapy set me apart from all the other financial planners in the world.
How My College Majors Helped My Current Career
The experience, skills and abilities I gained in college all come into play every day in my current career. Any degree can help you develop your career into what you want. Don't lament the degree you earned or feel embarrassed over what your major was. Your college major doesn't matter as much as you think. Managers want to work with people who have great personalities and are easy to train.
So how do you make a big transition -- like going from an actor to a financial planner -- work for you? Start by understanding what you can do with the skills you have right now. What abilities do you have that are needed on your dream job? I never thought I'd be asked to be on the local news to speak about first-time home buying tips, but you better believe I was glad that four years of theater training prepared me for a three-minute segment.
Dig through your own experience and identify what you had to do to earn that degree you now feel can be used to develop your career. I use my writing skills -- which I honed in my women's studies classes -- to communicate with my clients via email, create financial articles for DailyFinance and send out my Gen Y Planning newsletter. In one of my early jobs in financial planning, I edited all of the other advisers' quarterly newsletters. This was a valuable skill that I brought to the company.
Take Action to Gain the Experience You Lack
Understanding what you already know provides you with a starting point. But you won't develop your career and land your dream job simply by saying, "look at what I know." You also need some level of experience in the area you're looking to break into. This isn't easy.
If lack of experience in the field is what you need, don't wait for permission to get it. In other words, don't apply for job after job and give up when no one wants to take a chance to hire a graphic designer who majored in accounting and has no proof of what they can do. Start doing graphic design for friends and family and build a portfolio of your work so you can start getting paid projects.
You need to show you're a creative mastermind who produces amazing work. Set up your own platform (like a website, blog or online portfolio) and show off what you can do. Get on Odesk or Fiverr and do some work at low rates to get you started, until you start building that portfolio, experience, reputation, recommendations and so on.
You must take the initiative to get out there and demonstrate what you know. Then come back to that career in a new industry that you really want. You'll have the experience to back up the skills you're bringing in from that unrelated degree.
I would sit in the personal finance section of Barnes & Noble and read every personal finance and business book that I could get my hands on. I started off helping answer my friends' money questions. I learned there was a whole world of financial planning that existed and I could earn a living helping others with their money, so I decided to enroll in classes to become a certified financial planner.
Never Stop Learning
You also may need to continue your education, either before you grab that dream job or as you progress through your new career. Show your willingness to learn new things at any job you work. Take on roles outside of your set responsibilities. Or learn on your own. There are a number of online options to continue your education that are free or really cheap:
Watch how-to videos and tutorials on YouTube.
Take a class on Skillshare or Udemy.
Sign up for actual college classes -- for free -- through a program like Academy Earth or Coursera.
Enroll in a local or online program for an additional certification like I did.
You can also volunteer in your spare time or continue doing some freelance work to learn as you go. If you're willing to be resourceful, there are countless options out there and available to you.
You can develop your career no matter what your college major if you're willing to work to get there. It's not an easy road, and it's not always a fast-paced one. But your college major does not decide your career. You have the power to do that.
A fast-growing portion of Americans depend only on smartphones for Internet access, but nearly half of that group faces high rates of service interruption for financial reasons, according to a Pew Research Center study released Wednesday. This "smartphone-dependent" group tends to be poor and non-white, Pew says, raising the possibility of a new kind of digital divide.
Pew's survey found that 10 percent of Americans own a smartphone but do not have broadband at home, and 15 percent own a smartphone but say that they have a limited number of options for going online, aside from their cellphone. In all, 19 percent of American adults indicate that at least one of those conditions applies to them -- making them dependent on smartphones for participating in the digital world. Critically, 13 percent of those with an annual household income of less than $30,000 per year are smartphone dependent, while just 1 percent of Americans from households earning more than $75,000 per year depend on their smartphones.
Tenuous, Intermittent Access
"For a fairly substantial proportion of the population, smartphones are definitely serving as a key utility for accessing all sorts of important information and services -- and it's quite clear that this access is often most tenuous or intermittent for those users who rely on that access the most," said Aaron Smith, who co-authored the study.
The smartphone dependent group faces disconnection rates that are more than double the general population. And 48 percent of the smartphone-dependent group said they have had to cancel or suspend service due to "financial constraints," compared to 21 percent of the general population, Pew found.
And those lower income households are far more likely to need smartphones to perform basic Internet tasks such as hunting for a job. Those earning less than $30,000 annually are nearly twice as likely to use a smartphone to look for information about a job -- and more than four times as likely to use their phone to submit a job application, Pew said.
Less Likely to Have a Bank Account, Health Insurance
Trouble with smartphone bills occurs across economic and racial divides -- 23 percent of smartphone owners overall have had to cancel or suspend their service for a period of time because the cost was a financial hardship, Pew says, and 7 percent said they "frequently" experience higher-than-expected utility bills. Meanwhile, 15 percent said they frequently reach their data maximums.
But service interruptions are obviously a bigger hardship on those who rely on smartphones as their only connection to the Internet, a group Pew is dubbing "smartphone-dependent." Pew found that 12 percent percent percent of African Americans and 13 percent of Latinos are smartphone-dependent, compared with 4 percent of whites.
"Compared with smartphone owners who are less reliant on their mobile devices, the smartphone-dependent users are less likely to own some other type of computing device, less likely to have a bank account, less likely to be covered by health insurance, and more likely to rent or to live with a friend or family member rather than own their own home," Pew found.
Part of Everyday Life
The results come at a time when overall smartphone ownership has exploded. Fully 64% of American adults own a smartphone, up from 31 percent in 2011, Pew says. Smartphones are taking over as the main tool for Internet access for many users. Pew found that smartphones are now routinely used for critical everyday tasks:
62 percent of smartphone owners have used their phone in the past year to look up information about a health condition.
44 percent have used their phone to look up real estate listings or other information about a place to live.
43 percent to look up information about a job.
40 percent to look up government services or information.
30 percent to take a class or get educational content.
18 percent to submit a job application.
With growing ranks of smartphone dependents, and the increased notion that smartphones are required for participation in the economy, do consumers need better protections from service interruption, as users of utilities like electricity and land-line telephone service do?
"As an organization we aren't in the business of promoting particular policy outcomes so we don't have a formal position on whether additional regulation is necessary to help that group ... or what those regulations might look like," Smith said. "But we do hope that these findings can help inform the broader debate that's happening over broadband expansion and other digital divide issues, by giving a more thorough view into the day-to-day lives of that 'smartphone dependent' group."
Andresr/Shutterstock
Many people think that becoming a millionaire is a result of a major event, like selling a company in Silicon Valley. In reality, you can make $1 million without any special skills, knowledge or luck, just by following basic investment advice.
That's right -- the Average Joe can become a millionaire. You can even do it on a salary of $40,000 per year.
You don't need to start and sell a major company. You don't need to pick amazing stocks. All you need to do is follow tried and true advice, and you can make $1 million by doing nothing more than investing in basic broad market index funds, such as the S&P 500 (^GSPC). Here's how it works.
How to Invest Like a Millionaire
Let's say at age 25, you begin earning $40,000 annually. This provides you with an income of $3,333 per month before taxes. Set aside $600 per month (18 percent of your gross income). Invest that $600 in a tax-advantaged retirement account, such as a 401(k) or an IRA. From there, select a passively managed index fund that tracks the Dow Jones industrial average (^DJI). It's that simple.
You don't have to do anything fancy like day trading or stock picking. You don't have to flip houses or chase the latest fad. You just track the overall stock market through a low-fee index fund that tracks the Dow Jones. This gives you access to the 30 of the biggest publicly traded companies in the U.S.
Let's assume your money will grow at 7 percent annually. That's a conservative estimate, but it's one Warren Buffett agrees with. Stocks have historically grown at a rate of about 8 percent to 9 percnt annually. However, the precise number varies depending on which range of years you're looking at, so we'll assume a 7 percent annualized average as a conservative estimate.
The Power of Compound Growth
Continue to contribute $600 per month into this fund every year. Don't withdraw it; let it remain in the market. It will reinvest its own dividends and capital gains. You'll reap the benefits of compound growth. After 34 years, this will grow into $1 million.
In other words, if you begin investing at age 25, you'll be a millionaire by age 60. Pause and think about that for a second. You can earn $40,000 per year, save 18 percent of your gross income, and retire a millionaire. Just $600 per month, invested conservatively over 34 years, with an annual growth of 7 percent, is powerful enough to change your life.
We're not talking about mega returns. We're not talking about saving 50 percent to 60 percent of your income. We're not talking about doing anything extreme.
Imagine that you bumped your savings rate by another 2 percent. Now you're saving $667 per month, instead of $600. This one move shaves two years off of your timeline. If you start investing at age 25, you'll retire a millionaire at age 58 instead of 60.
Yes, a mere $67 a month -- the price of cable -- can help you achieve your goals two years earlier. That's all thanks to the power of compound growth over time.
How to Combat Inflation
Thanks to inflation, $1 million in 30 years won't be worth the same as $1 million today. However, if inflation continues to run 3 percent annually and your investments gain at 7 percent annually, you're still outpacing inflation by more than double its rate.
Want to protect yourself against inflation even more? I recommend using the investment strategy we just reviewed, coupled with also paying off your mortgage. Eliminating your mortgage gives you the following benefits:
You'll retire with a guaranteed place to live.
You won't have to worry about making mortgage payments in retirement.
The value of your home will keep pace with inflation over time, assuming it's not in a severely declining market (such as Detroit).
The Math Still Works
Further, in our example, your salary remains $40,000 from age 25 to 55. It's declining with inflation, yet the math still works out to $1 million.
We're also assuming you'll continue contributing the same $600 per month to your investments, an amount that declines with inflation over time.
It's likely you'll grow your salary and retirement contributions at the rate of inflation. This puts you much further ahead than if you were to continue contributing the same raw $600 over 34 years.
Any way you put it, you'll be able to retire a millionaire just by starting early, being diligent, and riding out the ups and downs of the market.
Paula Pant quit her 9-to-5 job, traveled to 32 countries, launched her own business and became a successful real estate investor. She's the founder of Afford Anything, an online movement against tired old financial advice that says you should skip lattes and chain yourself to a desk for 40 years. Afford Anything helps you crush limits, build wealth and maximize life.
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On average and across the nation, American banks pay their customers about 0.09 percent interest on bank deposits, according to Bankrate.com (RATE). There's little we can do to get banks to pay us more, but there is a way to ensure you get paid the very best interest rate available on any given day.
You see, 0.09 percent is just the average. Some banks pay more, while others pay less. And banks that pay more today may pay less tomorrow. The key to maximizing your interest rate isn't so much having a lot of money in the bank, but making sure your money is in the right bank -- or banks.
Introducing MyMaxInterest
That's where a new service called MyMaxInterest.com comes in. Started last year by a former banker who was tired of manually tracking which banks paid him the most interest, "Max," as it's affectionately referred to, automates the process of searching out the best-paying banks and directing your deposits to them. It works like this:
First, you open up (or already have) accounts at more than one bank. The current list of banks Max "maximizes" includes brick-and-mortar giants:
These five don't pay a whole lot of interest, though. Interest checking and savings accounts at Citibank, for example, mostly pay 0.01 percent. Although if you can scrape together $500,000 to deposit at Citibank, they'll pay you a whopping 0.12 percent. So to earn better returns, Max encourages its clients to also open accounts at leading FDIC-insured online banks including:
Capital One 360, currently the stingiest of these online banks, still pays customers 0.90 percent on deposits of $100,000 and up -- seven times more than Citibank's best rate, but on a deposit five times smaller. Once these accounts are open, you can link them to MyMaxInterest.com, and instruct Max to:
Maintain minimum amounts at each bank to satisfy your "minimum account balance" and also have enough money available for day-to-day bill payments.
Set the maximum amount of money you want sitting at any one bank -- so as to not exceed the $250,000 limit insurable by the FDIC.
And within these lower and upper limits, to shuffle your money among your several banks automatically, so that you always have the most money at the banks paying the most interest.
Wait! Is That Safe?
Short answer: Yes. Well, it's at least as safe as using your existing bank accounts. This is because Max works as an electronic agent for you, and one able to conduct only very restricted tasks.
In particular, Max is only authorized to transfer money from one of your bank accounts to another of your bank accounts. It can't send money anywhere else. So even if hacked, Max couldn't be used to send money to the account of, say, Internet Fraudsters 'R' Us, Inc. in Ulyanovsk, Russia. That would automatically be an unauthorized transaction.
What's more, Max never takes custody of your money. It's always in one of your own bank accounts. And according to founder and CEO Gary Zimmerman, Max doesn't track your Web browsing with cookies or collect other personal information about you for use in marketing (or selling to marketers). Not so much as a Social Security number does it collect.
Safe ... and Profitable
So who might want to use Max, and what would they use it for? Zimmerman notes that the average Max customer keeps between $500,000 and $700,000 in cash, but some have as little as $50,000, and there is no minimum account size needed to sign up for Max.
That still sounds like a lot of money -- and it is. But remember that this service is designed primarily for folks looking to (a) spread money among multiple banks, so as to keep under the $250,000 FDIC-insurance limit at each, while (b) maximizing profit.
And how much profit are we talking about? Let's take a simple example: A customer with $500,000 in cash (average for Max), currently all kept at Citibank earning 0.12 percent -- and only half of it FDIC-insured. If that customer had an account with Citibank and Capital One 360 (paying 0.9 percent), Max would instantly recognize that the money was misallocated and split it evenly between Citi and Capital One 360 -- into two pots, $250,000 each, all FDIC-insured.
Doing so would raise the annual interest earned on the deposit from $600 (at Citi only) to $250 (from Citi at 0.1 percent) plus $2,250 (from Capital One at 0.9 percent) equals $2,500 -- a 315 percent increase.
Caveats to Consider
Nothing in life comes free, and Max does charge a small fee: 0.08 percent per year. Applied to $500,000, that would be $400, reducing the net profit to $2,100. But that's still 3.5 times what the cash was earning at Citibank.
What's more, if a customer had accounts at, say, Citibank, Capital One 360 and Barclays (paying 1 percent), Max would be able to do even better -- shifting essentially all the cash away from Citi to capture the better interest rates at Capital One 360 and Barclays, keeping it all FDIC-insured and generating annual interest of perhaps $4,700. After Max's fee, that would be $4,300 a year -- a 615 percent improvement.
And if next year, Citi surprisingly decided to offer 1.1 percent, while Capital One 360 or Barclays cut their rates? Max would move the money back again -- without you even needing to lift a finger to capture the better rates.
A lazy man at heart, Motley Fool contributor Rich Smith likes the idea of more money for less work. He owns no stock in any company named above. The Motley Fool recommends American Express, Bank of America, and Wells Fargo. The Motley Fool owns shares of Bank of America, Capital One Financial, Citigroup, General Electric, JPMorgan Chase and Wells Fargo, and it has options on Wells Fargo.
Jeffrey Phelps/APKnow this building? It dominates America's best city for successful aging, a report concludes.
If you Google the phrase "best places to retire in the U.S.," you'll find dozens of articles and surveys, often recommending places in the Sun Belt. But a new report -- measuring 352 metropolitan areas on 84 indicators -- fills eight of its top 10 spots from the north.
The Milken Institute report looked at the infrastructure for successful aging -- such as health care, housing, transportation, cost of living, crime rate, employment opportunities for older workers, intellectual stimulation and weather. Anusuya Chatterjee, a managing economist at Milken, said successful aging is about more than avoiding snowy winters. "Even very cold cities turned out the be great cities for older adults to age. People have to decide if their cities have the other things that are important."
America is aging at an unprecedented rate. By 2040, 80 million Americans will be 65 or older, nearly double the number from 2010. The overwhelming majority live in or near urban areas, and the report finds they want to continue to do so. Many are also interested in aging in place and not uprooting themselves.
Aging in Place
Snowy Madison, Wisconsin -- a state capital that's home to a major university -- came out on top. The report calls it "a hub of innovation and intellectual stimulation," with a great health care system, lots of healthy lifestyle choices and plenty of culture and recreation.
Also in the top 10 for larger metro areas: Omaha, Nebraska; Provo-Orem, Utah; Boston-Cambridge, Massachusetts; Salt Lake City; Jackson, Mississippi; Des Moines, Iowa; Toledo, Ohio; Austin-Round Rock, Texas; and Bridgeport-Stamford-Norwalk, Connecticut. Others in the top 20 include some unglamorous places, such as Syracuse, New York, and Cleveland.
Rankings for smaller cities were dominated by places in the Midwest, such as Iowa City, Iowa; Sioux Falls, South Dakota; Columbia, Missouri; Bismarck, North Dakota; Rapid City, South Dakota; Ames, Iowa; Rochester, Minnesota; Ann Arbor, Michigan; Cheyenne, Wyoming; and Fargo, North Dakota.
One common link for the cities on both lists is many are university towns, and they all offer "purposeful aging," which includes areas with robust economies and a wealth of health care assets. Chatterjee notes that "a flourishing economy makes everybody's life better, and there's a better chance that their children and grandchildren will stay nearby, and that's a big advantage."
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My wife and I finally received an offer on our home. We had been trying to sell our home, after failing as landlords, for about six months now. Looking back over the time we've owned the home, there have been quite a few lessons we've learned along the way.
Becoming a landlord had been my idea. My wife didn't want to rent out our home after we had to move to a new state thanks to my job. I had dreams of having a real estate portfolio that threw off thousands of dollars in passive income in retirement. It was part of my grand scheme, buckets of passive income in retirement. I had dreams of becoming the next Donald Trump.
Becoming a landlord isn't for everyone. It takes guts, especially in this economy, although the housing market is starting come back in many regions across the United States. I thought that I could stomach swings in the stock market and in real estate prices because of my long time horizon until retirement. I'm only in my mid-thirties. I have another 30 years of working, saving and investing before the gold watch of retirement calls my name. But, I was wrong.
Being a landlord really opened my eyes, and my wife's eyes too, as to what our risk tolerance truly is. We found that we didn't have the appetite that we thought.
A Good Realtor Makes All the Difference
I cannot stress enough the importance of having a great real estate agent. I've always said that you don't want to pick professionals like a real estate agent, lawyer, doctor from the Yellow Pages. You need to get recommendations from your friends, family and coworkers. You also want to interview these professionals to ensure that you're both the right fit for each other. Your personal finance team, in which a real estate agent will be a prime player, will help to lay the foundation for your financial life and the moves you make now and in the future. Think of your real estate agent, lawyer, certified public accountant and certified financial planner to be members of your own board of directors.
My wife and I found our first real estate agent from a mutual friend. My wife and I were moving to a new town, and one of her girlfriends knew an excellent real estate agent that specialized in working with first-time home buyers. It was a match made in heaven. It was a great experience when my wife and I purchased our first home in the spring of 2009.
So, it only made sense for us to call the same agent again when we were looking to sell the home six years later. But she was no longer in the business, having stopped to raise a family. Thankfully she recommended another agent who she would personally use to sell her home if it came to that. That's a great endorsement. I was sold.
It's been a great experience working with our new real estate agent selling our home this year. If you do nothing else, making this one choice can set you up for success and make all the difference in the world.
Don't Accept the First Offer
The first offer that you receive from a buyer is just a starting point. It's their "going in position." It's the buyers shooting for the moon. The offer that we received on our house wasn't what we had hoped for after six months on the market.
The buyers had a few other surprises For example, they asked for a 60-day due diligence period. This would take our home off the market for two months while they thought about it some more, and they had very little incentive to stay in the deal with next to no earnest money.
We went back and forth for almost four days before we settled on an agreement that worked for both parties. When I look back at buying the house six years earlier, I can't help but kick myself mentally for not asking for more concessions from the buildern. For example, I always wished that I had asked for garage door openers and window blinds. These two additions alone were the bane of my existence for the first two weeks that we lived in our new home. The builder accepted our first offer outright because we didn't "shoot for the moon."
So, I will never forget that the first offer isn't always the best offer for the other party. It should be more of wishful thinking. It pays to negotiate a little. You can see this in popular television shows like "Pawn Stars" and "American Pickers." The first person goes in high, the next goes low, and then they meet in the middle. Buying and selling a home is similar. Of course, you don't want to scare a buyer off by too much back and forth. There's the fine art to getting what you want and keeping them on the hook.
Think Outside the Box -- Leverage Craigslist and Friends
I was semi-forced into renting out my home after relocating to another state for my job. I'm still not going to sell the house for what my wife and I bought it for six years ago. The market just won't sustain that now where we lived. We've lost about 15 percent of my home's equity.
If I had sold when we moved away in 2012, I would have lost much more than that amount. So, I became an accidental landlord. For the most part, the renters were kind to our home. We escaped with only having to paint, re-carpet a portion of the living room and make a few minor repairs before selling it. But, the last tenants left trash in the yard. And, the jungle gym swing set that I built for my children hadn't been touched in years.
Our real estate agent recommended getting the swing set and debris out of the yard before agents started showing the house. That was easy for him to say from across town. It was much harder for my wife and me to do from two states away. I didn't have the time off from work or the extra cash to head back to take care of it personally.
So, my wife and I turned to friends who needed extra cash. And, when that hit a snag, we then looked to Craigslist to finish the job. A couple of days and a few hundred dollars exchanged through PayPal and the swing set and debris were gone, hauled to the dump.
Keep Moving Forward
My wife hates car shopping with me. No matter how much research I do and how well I negotiate, I always leave the dealership feeling like I paid too much. In the back of my mind, I always think that the seller has taken advantage of me. It eats at me, and I have buyer's remorse more times than I'd like to admit.
The same was true when my wife and I were going back and forth with the buyer for our home. I wanted the best deal and to protect as much of my equity as I could. I don't want to be taken advantage of by anyone, and I hate haggling.
But, at some point, you have to let it go. You have say that you gave it your best effort and then move on. Moving on seems to be the hardest for me most of the times. But, I'm working on it. You have to eventually stop haggling.
You have to move forward. Don't look back. That's what my wife and I are doing now. We've taken our lumps with purchasing this house six years ago. It was a good house though, filled with a lot of great memories. We've learned a lot too. And, now we're on to the next adventure, the next learning experience. But, for now, we're also moving on as renters for a nice long while. We're out of the landlord and homeowner game.
What about you? What did you learn from selling your home? Were there some surprises along the way? Are you like me and feel like someone else always has the upper hand and is taking advantage of you in these negotiations?
Hank Coleman is the publisher of the popular personal finance blog Money Q&A, where he answers readers' tough money questions. Follow him on Twitter @MoneyQandA.
Have you ever received one of those letters from the Internal Revenue Service that says you owe them more money? No doubt you're worried. But the truth may be that the IRS owes you money.
I am a certified financial planner and financial adviser in Las Vegas. Most of the letters I have seen are due to the client or the tax preparer forgetting to include the sale of a stock or mutual fund on their tax return. Unfortunately, the IRS letter often overstates the amount of tax owed.
This is a fairly common mistake and is being caught more frequently thanks to computers. The IRS gets some details of stock and mutual fund sales from the brokerage company or the mutual fund company. Let's say the IRS is told that John Doe, with a Social Security Number 123-45-6789, sold XYZ mutual fund for $10,000. The IRS does not know the cost basis, or what you paid for that investment. This is a very important piece of information, because you don't pay taxes on your principal.
The IRS will take this information and compare it to your tax return. If it doesn't see mention of the XYZ sale, there is a good chance that you will receive an automated letter. These days, the letter will list the security sold, how much it was sold for, and say you owe tax on how much it was sold for. In these letters, the IRS assumes you put $0 into the investment and you got $10,000 out. I like to think I'm a pretty good financial planner, but even I can't turn zero into any amount of money. The IRS then calculates your tax based on a $10,000 gain.
Cost Basis
Now, the IRS does tell you that it has assumed a zero cost basis and you can calculate your own. That is really good advice, because it will save you money. If you originally invested $8,000 in the mutual fund or stock and then sold it for $10,000, then you only have a $2,000 gain. Tax on a $2,000 gain would obviously be smaller than tax on a $10,000 gain. But what if you invested $14,000 and sold the investment for $10,000. Now you have a $4,000 loss, which might mean the IRS owes you money.
I had a widowed client worried that the big bad IRS was going to come after her because she owed around $4,000. I read her letter and sure enough, her tax preparer forgot to note a mutual fund sale and the IRS taxed her on the whole amount. She was so scared that her hands were shaking. I took her shaking hands in mine and said she did have a mistake, but it wasn't a $4,000 mistake. I asked her to wait while I looked up her account.
When I returned, I had a big smile on my face. Because the stock market was down, she had a loss on her account. I got to tell this nice woman that the IRS would have to send her a check. (It turned out to be for about $200.)
The good news is eventually these letters will contain all the correct information. The Emergency Economic Stabilization Act of 2008 mandated that cost basis information (what you paid for the investment) be tracked and given to the IRS when the stock or mutual fund is sold. This data will be tracked only for stocks bought after Jan. 1, 2011 and for mutual funds bought after Jan. 1, 2012.
If you're like many of my clients who have held some stock or mutual fund positions for years and years, your cost basis information is considered "non-covered" and is not transmitted to the IRS. So if you sell stock or mutual funds bought before those dates, you need to make sure you give the cost basis information to the IRS on your tax return to avoid one of these nasty letters.
Bebeto Matthews/APNew York Attorney General Eric SchneidermanBy MARY ESCH
ALBANY, N.Y. -- A group of 14 attorneys general has asked Congress to launch an investigation of the herbal supplements industry and to consider giving the U.S. Food and Drug Administration stronger oversight of the industry, New York Attorney General Eric Schneiderman announced.
"When consumers take an herbal supplement, they should be able to do so with full knowledge of what is in that product and confidence that every precaution was taken to ensure its authenticity and purity," Schneiderman said Thursday.
Schneiderman alleged in February that DNA tests on certain store-brand supplements found none of the herbs on the labels. Industry groups and some consumer advocates have criticized Schneiderman's test method, saying DNA testing is unable to identify highly processed plant material.
GNC, one of the retailers targeted by Schneiderman, said last week that it has provided him test results from independent labs showing its products were safe and properly labeled, and has agreed to add DNA testing to its quality control procedures.
Under federal law, herbal supplements, vitamins and other dietary supplements are subject to far less rigorous oversight than pharmaceutical products.
Schneiderman noted research that has found some herbal supplements to contain high levels of heavy metals like lead, mercury, and arsenic, and a study that found a popular herbal supplement designed to reduce menopause symptoms may have caused severe liver damage in certain women.
"The FDA has long been aware of problems in the dietary and herbal supplement supply chain, from dubious ingredient sourcing to a failure to carry out proper testing on finished products," the attorneys general said in their letter sent Thursday to Kansas Sen. Jerry Moran and Pennsylvania Rep. Joe Pitts, chairmen of the subcommittees dealing with product safety and health.
Schneiderman's letter is co-signed by the attorneys general of Connecticut, District of Columbia, Hawaii, Idaho, Indiana, Iowa, Kentucky, Massachusetts, Mississippi, New Hampshire, Northern Mariana Islands, Pennsylvania and Rhode Island.
WASHINGTON -- The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, suggesting the labor market continues to expand at a solid clip even as economic growth has stalled.
Sustained labor market strength supports views that the sharp slowdown in activity is probably temporary. A host of factors ranging from bad weather to a strong dollar has sucked momentum from the economy in the first quarter.
Today's report reinforces our view that labor market conditions continue to improve despite recent disappointments in a number of indicators related to GDP growth.
"Today's report reinforces our view that labor market conditions continue to improve despite recent disappointments in a number of indicators related to GDP growth," said Daniel Silver, an economist at JPMorgan (JPM) in New York.
Initial claims for state unemployment benefits dropped 20,000 to a seasonally adjusted 268,000 for the week ended March 28, the Labor Department said Thursday. That was the lowest level since January.
The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 14,750 to 285,500 last week.
The bullish labor market tone was also underscored by signs that more people are coming off the unemployment benefits rolls.
The number of people still receiving benefits after an initial week of aid fell 88,000 to 2.33 million in the week ended March 21, the lowest reading since December 2000.
The strong labor market should keep the Federal Reserve on track to start raising interest rates this year.
The dollar was weaker against a basket of currencies, while prices for U.S. Treasury debt fell. U.S. stocks opened higher.
Allaying Fears
While the claims data has no bearing on Friday's March employment report as it falls outside the survey period, it should help allay fears of a long-lasting moderation in growth.
Nonfarm payrolls likely increased 245,000 last month, with the unemployment rate holding steady at a more than 6½-year low of 5.5 percent, according to a Reuters survey of economists.
The economy, which has been hampered by weaker global demand and a now-settled labor dispute at the West Coast ports, as well as a strong dollar and a harsh winter, also got a boost from an unexpected rise in factory orders in February.
In a separate report, the Commerce Department said new orders for manufactured goods increased 0.2 percent, ending six straight months of declines. Orders excluding transportation rose 0.8 percent, the biggest rise in eight months.
First-quarter growth estimates range between a 0.6 percent and 1.7 percent annual pace. The economy grew at a 2.2 percent pace in the fourth quarter.
Trade Gap Narrows
The growth estimates, however, could be raised as another report from the Commerce Department showed the trade deficit narrowed 16.9 percent to $35.4 billion in February, the smallest since October 2009.
Economists had forecast the trade deficit slipping to $41.2 billion. When adjusted for inflation, the deficit narrowed to $50.8 billion in February from $54.6 billion the prior month.
But the smaller trade deficit is probably temporary given a bullish dollar and weaker global demand.
"We will be looking for imports to pick up in the coming months, as consumer spending gains some momentum in the midst of rising employment levels," said Anthony Karydakis, chief economic strategist at Miller Tabak in New York.
The West Coast ports dispute appears to have slowed the flow of imports and exports. The buoyant dollar, sluggish global demand as well as lower crude oil prices also likely impacted the trade balance in February.
In February, imports tumbled 4.4 percent to $221.7 billion, the lowest since April 2011. Imports of petroleum products were the lowest since September 2004, with the average import price for crude oil at a near six-year low.
Exports fell 1.6 percent to $186.2 billion in February, the smallest since October 2012.
Exports to Canada and Mexico -- the main U.S. trading partners -- fell in February. Exports to China tumbled 8.9 percent, while those to the European Union were unchanged.
Imports from China plunged 18.1 percent, pushing the politically sensitive U.S.-China trade deficit down 21.2 percent to $22.5 billion.
Justin Sullivan/Getty ImagesFederal Reserve Chair Janet YellenBy Michael Flaherty
WASHINGTON -- More research is needed to understand what policies allow people to move up the economic ladder and what holds them back, Federal Reserve Chair Janet Yellen said Thursday, returning to a controversial topic for the U.S. central bank.
Yellen said that research may provide evidence of what allows people to get ahead, and to predict how individual circumstances impact income inequality.
It would also be beneficial to understand whether any policies may hold people back or discourage upward mobility.
"It would also be beneficial to understand whether any policies may hold people back or discourage upward mobility," Yellen said in prepared remarks for a speech to a Fed research conference here on economic mobility.
Yellen tackled the issue of income inequality in a speech in Boston last October, saying she was "greatly concerned" about income disparity in the United States.
Republican lawmakers seized on that speech, saying it was a partisan view meant to help Democrats in the November elections, with little relevance to the central bank's responsibility.
That view resurfaced during Yellen's semi-annual appearance in front of Congress in February, with Republican lawmakers in the House of Representatives accusing the Fed chief of using the inequality issue to side with Democrats.
Yellen fiercely defended her stance, saying that previous Fed leaders had addressed the issue of wealth inequality and that it remained an important economic view.
"I am not making political statements. I am discussing a significant problem that faces America," Yellen said during the House hearing.
On Thursday, she struck a more delicate tone.
"Research could help us better understand how much mobility at the individual level matters for overall growth in productivity and economic output," Yellen said in her remarks.
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Nearly one-third of American employers expect to take on new full-time employees over the next three months and, as the job market tightens, most plan to start handing out pay raises.
That's the bottom line of a new CareerBuilder survey of more than 2,000 employers across the U.S. The poll measures the hiring expectations of American bosses for the three-month period that just began.
Particularly noteworthy is the increasing numbers of small business owners who intend to hire additional full-time employees. That figure had lagged, as they remained cautious about their prospects for business growth.
The pick-up in small business hiring has been showing up gradually over the past few months, according to Matt Ferguson, CEO of CareerBuilder and co-author of The Talent Equation. "Small businesses have been playing a larger part in the solid stretch of job growth the U.S. has experienced over several months," he said. "When you pair that with the fact that hiring has increased in a variety of industries and regional areas, it bodes well for workers seeking new and better-paying employment prospects."
Now, 24 percent of small businesses say they plan to expand full-time headcount by the end of June, compared to 18 percent in the same period a year ago.
Overall, 32 percent of the people who make hiring decisions at businesses of all sizes said they intend to hire additional full-time permanent employees in the next few months. The biggest businesses were most likely to be in expansion mode. Fully 38 percent of businesses with more than 500 employees expect to hire in the current quarter, compared to 32 percent in the same period a year ago.
Inevitably, there are signs that employers are feeling the pressure to raise salaries to attract the best candidates. Forty-three percent of employers said that they have job vacancies that have been open for 12 weeks or longer.
A majority of those surveyed said they plan to reward employees with raises during the present quarter. About 24 percent said they'll increase salaries by at least five percent. Another 44 percent anticipate increasing salaries by four percent or less. In the hottest field, information technology, about 37 percent of employers expect to raise salaries.
In fact, information technology is one of four industries whose employers are most likely to be in new-hiring mode. More than 40 percent of bosses in the transportation and financial services industries said they would be hiring, as did 32 percent of mid-sized health care companies.
Temporary or contract employment also is showing an upswing. Thirty-seven percent of employers plan to hire temporary or contract workers in the second quarter, up from 33 percent a year ago. And, 31 percent plan to offer a permanent job to some contract or temporary staffers in the second quarter, up from 26 percent last year.
The upbeat hiring projections follow equally positive numbers for the quarter that just ended. In the same survey, 35 percent of employers said they had hired full-time, permanent employees during the quarter that just ended, up from 29 percent the year before.
"The brisk hiring anticipated for the second quarter comes against the backdrop of stronger sales, new product development and market expansion among companies of all sizes," said Ferguson.
The nationwide survey was conducted for CareerBuilder by Harris Poll between Feb. 11 and March 6, 2015. It included a representative sample of more than 2,000 hiring managers and human resource professionals across industries. CareerBuilder is the operator of CareerBuilder.com, the nation's largest jobs database.
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The already slim number of cable television providers continues to thin out. Charter Communications (CHTR) announced Tuesday that it will be acquiring the smaller Bright House Networks in a $10.4 billion deal that will combine Charter's 4.16 million video customers with the roughly 2 million homes that Bright House is presently servicing.
The deal shouldn't have a problem clearing regulatory hurdles. Bright House is a small player, operating primarily through Central Florida with a slight presence in four other states. Charter is the country's fourth-largest cable provider, and snapping up the sixth-largest player in Bright House will only find the combined company in a tight race with privately held Cox Communications and its roughly 6 million accounts for a distant third place.
The wedding snapshot isn't as pretty at the other end of the cable television market. Comcast (CMCSK) (CMCSA) and Time Warner Cable (TWC) are trying to hook up, and there's more than just a little public and regulatory resistance to the pairing up of the country's two largest providers. That deal isn't a lock to go through, and just a few days ago we had Comcast announcing that the original early 2015 closing date for the merger is being pushed back to the middle of 2015.
The market is clanging silverware against champagne glasses as it toasts the proposed pairing of Charter and Bright House, but there too many people waiting to shout "I object" at the top of their lungs as Comcast and Time Warner Cable try to tie the knot.
Big Deal Means Big Problems
It's now been more than a year since Comcast announced that it would be joining forces with Time Warner Cable. The proposed pairing drew groans from the beginning. Unlike Tuesday's Charter-Bright House match, which would create a cable provider servicing a little more than 6 million customers, Comcast's 22.4 million video accounts and Time Warner Cable's 10.8 million cable TV homes would create an even bigger juggernaut.
Comcast promised to address competitive concerns by divesting 3 million of the combined company's managed subscribers, but that would still create a monster with more than 30 million cable television accounts. It also leaves us to question how the transaction would inconvenience the 3 million customers that would be handed over to a smaller provider.
Comcast tried to promote the benefits of the combination for residential consumers, corporate accounts, and advertisers. It points to the deployment and development of advance services possible with a larger footprint, also singling out how Time Warner Cable customers would benefit from Comcast's speedy broadband, enterprise offerings and marketing tools. The public wasn't buying it. All that many people see is the biggest cable television provider getting bigger, and the cable bills that seem to get fatter with every passing year widening even faster.
It's not a surprise that the FCC hasn't given the deal the green light despite the deal being announced nearly 14 months ago.
You Already Hated Cable Television Providers
The market rewards success, and Comcast and Time Warner Cable have certainly been successful. However, it doesn't help that folks generally don't like their cable companies. Comcast won top honors in Consumerist's annual Worst Company in America poll last year. Time Warner Cable made it all the way to the Elite Eight, getting bumped out of being in the Final Four by the notorious Monsanto (MON).
Between the outages and escalating monthly ransoms, it's hard for Comcast and to a lesser extent Time Warner Cable to make friends. If they combine, forming a cable giant that will be five times larger than its nearest cable television rival -- whether that is Cox or Charter-Bright House at 6 million apiece -- the buckets of venom will overfill.
Comcast can point to satellite television and the cord-cutters eating away at its empire. Comcast itself has posted sequential declines in subscribers for 28 of the past 31 quarters, and the four largest publicly traded cable television companies combined to lose 751,000 net video customers in 2014.
However, trying to buy its way out of organic declines instead of tackling the value propositions and service setbacks that have resulted in the migration away from cable television isn't the answer. Getting better -- not bigger -- is what will give Comcast a shot at restoring its brand image.
Staff, AFP/Getty Images
April is upon us -- tax month. In just two weeks, on April 15, Uncle Sam is going to ask you to "Show me the money!" But here's a question for you: After we send in our income tax checks, what will we get for our money?
Social Security? Repair of our crumbling roads and bridges? Maybe even ... a space program? It's not always easy to see just exactly how the government is spending your tax dollars. But there's one arm of the U.S. government that does a particularly bang-up job of keeping taxpayers in the loop, relaying up-to-the-minute reports not only of how much money it spends, but what it spends this money on -- down to the penny.
Believe it or not, we're talking about the Pentagon.
Despite its reputation as a somewhat secretive organization, the Pentagon is actually one of our most "open" government agencies. Every day of the week, the Department of Defense tells U.S. taxpayers what contracts it's issued, to whom and for how much -- all right out in the open on its website. Whether it's Jeeps or fighter jets, rifles or robots that the Pentagon's buying, they tell you about it openly.
And now we're going to tell you about it, too.
What Your Tax Dollars Bought in March
In the month just ended, the Pentagon reported awarding contracts totaling $13.81 billion. (Surprisingly, that was actually a bit less than the Pentagon spent in the shorter month of February.) And what did they get for their (read: your) money?
Look! Up In the Sky!
Well, for one thing, a whole lot of aircraft -- of all shapes, sizes, and piloting configurations. For example, on March 16, the Army placed an order for 19 Gray Eagle unmanned aerial vehicles. They got a good deal on these upgraded "Predators," too, paying manufacturer General Atomics only $132 million for the lot. (In contrast, military tech website Deagel.com puts the average purchase price of Gray Eagle at $14 million a unit.)
In other aerial acquisition news, the Air Force bought a single King Air 350 surveillance aircraft from Beechcraft for $27 million, and one HC-130J Combat King II for $73 million.
And to upgrade the aircraft we've already got, late in the month, the Air Force placed a monster $485 million with Lockheed Martin (LMT) to supply its fighter jets with new "Sniper" advanced targeting pods.
160 Humvees -- but Not for Us
The Pentagon buys weapons not just for us, but for our allies, too. Case in point: On March 12, the Defense Department announced it will be spending $32 million to acquire 160 Humvees for the Iraqi Army. (Let's hope they can hang on to this batch a bit longer.)
Hovercraft. Honest-to-Goodness Hovercraft
We do, however, tend to keep the coolest toys for ourselves. Things like... hovercraft. Just before the month was out, the Pentagon awarded defense contractor Textron (TXT) an $84 million contract to build it a pair of "Landing Craft, Air Cushions," generally referred to by their acronym: LCAC.
Whether you knew it or not, we actually already have hovercraft in the inventory. (The Marines use them for amphibious assaults on beaches.) But the ones we've got are wearing out, so now it's time to order some replacements.
Robots for the Army -- but Not the Kind of Robots You Think
And speaking of cool toys, one of the biggest contracts awarded all month went to the purchase of... robots.
No, not those kinds of robots. Not Terminators, but Army medics. Specifically, the Defense Logistics Agency placed an order with robotic-assisted surgery specialist Intuitive Surgical (ISRG) to supply it with a whopping $430 million worth of "surgical robotic systems, instruments, accessories and upgrades" over the next five years. With that single order, the U.S. Department of Defense became one of Intuitive Surgical's biggest customers -- worth 4 percent of the company's annual revenue stream.
And last but not least...
Shhh! Top Secret!
Mind you, the Pentagon does keep some secrets. National security dictates that when vagueness is called for, vagueness is what we'll get. And that's the case with the final contract we'll highlight for you today:
On March 3, the U.S. Special Operations Command signed a five-year contract with Johns Hopkins University Applied Physics Laboratory to perform research into "theoretical analyses, exploratory studies, and/or experiments in various fields of science and technology... and engineering."
We know how much the Pentagon is spending on this one: $405 million. What we don't know is what they're cooking up. (Ray guns and cloaking devices, perhaps?) One thing's for sure, though. If the research pans out and turns into real products that can be bought, you'll be able to read all about them on the Pentagon's website. Eventually.
Stay tuned.
Motley Fool contributor Rich Smith is keeping an eagle eye out for news that the Army's buying a Terminator robot -- but he hasn't seen it yet.Follow him on Facebook for more defense news. He has no position in any stocks mentioned, but The Motley Fool recommends Intuitive Surgical and owns shares of Textron. Try any of our Foolish newsletter services free for 30 days. Check out our free report on one great stock to buy for 2015 and beyond.
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