NEW YORK -- U.S. stocks ended a volatile session with modest gains on Wednesday after minutes from a U.S. Federal Reserve meeting indicated that the central bank remained on track for a interest rate hike this year.
Major indexes moved between negative territory and session highs after the news as traders parsed the minutes for clues as to when the first rise could occur. Some Fed participants went on record saying they expected upcoming economic data would warrant an initial rate increase in June, while others anticipated a hike later in 2015 due to recent strength in the U.S. dollar.
If the Fed moves monetary policy in an arbitrarily fast manner, that would be a detriment for stocks.
Market participants had been expecting the first rate hike to come in September or later, with last week's much weaker-than-expected March payroll report pointing to slowing growth. The central bank has said it would only raise rates when data suggests the economy is strong enough to withstand it.
"June would come as a surprise," said Alan Gayle, senior investment strategist and director of asset allocation at RidgeWorth Investments in Atlanta, Georgia. "If the Fed moves monetary policy in an arbitrarily fast manner, that would be a detriment for stocks."
Fed officials acknowledged risks from overseas and a weak start to the year at their March meeting but remained confident in the strength of the recovery, the minutes showed.
Markets were supported boosted by merger activity in the health care sector, though the energy sector was weak as crude oil plunged.
Stocks Making Moves
Mylan (MYL) jumped 14.8 percent to $68.36 after the generic drugmaker offered to buy Perrigo (PRGO) for about $29 billion in cash and stock. Perrigo jumped 18.4 percent to $195. The two companies were the biggest percentage gainers on the S&P 500.
U.S. crude futures dropped 6.6 percent to settle at $50.42 a barrel after U.S. Energy Information Administration data showed the largest weekly build in oil inventories since March 2001. The news offset Royal Dutch Shell's (RDS-A) $70 billion bid for rival BG Group.
The S&P Energy index fell 1 percent while Exxon Mobil (XOM) lost 2 percent to $84.06 and Chevron (CVX) shed 1.7 percent to $106.66.
The Dow Jones industrial average (^DJI) rose 27.09 points, or 0.15 percent, to 17,902.51, the Standard & Poor's 500 index (^GSPC) gained 5.57 points, or 0.27 percent, to 2,081.9 and the Nasdaq composite (^IXIC) added 40.59 points, or 0.83 percent, to 4,950.82.
After the market closed, Alcoa (AA) reported first-quarter revenue that was below expectations. The stock, which is viewed as the unofficial kick-off to the earnings season, was flat in extended trading.
Advancing issues outnumbered declining ones on the NYSE by 1,847 to 1,163, for a 1.59-to-1 ratio on the upside; on the Nasdaq, 1,739 issues rose and 979 fell for a 1.78-to-1 ratio favoring advancers.
The benchmark S&P 500 index was posting 12 new 52-week highs and no new lows; the Nasdaq composite was recording 79 new highs and 29 new lows.
About 5.68 billion shares traded on all U.S. platforms, according to BATS exchange data, below the month-to-date average of 6.25 billion.
What to watch Thursday:
Walgreen (WBA) reports quarterly financial results before U.S. markets open.
The Labor Department releases weekly jobless claims at 8:30 a.m. Eastern time.
At 10 a.m., the Commerce Department releases wholesale trade inventories for February, and Freddie Mac releases weekly mortgage rates.
Statements, reminders, updates, forecasts and tax returns: All of these financial records proliferate like spring dandelions. As you're tidying up in the aftermath of income tax season, consider creating a dashboard of key metrics. A dashboard organizes these metrics in one place, usually on a spreadsheet, so you can easily track how your financial life is progressing.
Financial advisers say a useful dashboard should have no more than nine categories (or columns) and should be contained to a single page or screen. If you want to add more detail, add additional pages with supporting calculators and documentation, instead of extending the first page of your spreadsheet into infinity. You'll want to categorize your key headers into these buckets:
Savings and investments.
Debt reduction.
Life goals and transitions.
Short-term savings don't belong. By definition, that pot of money is available as needed, and the point of the dashboard is to track long-term progress. Expect to update the dashboard at least a couple of times a year, probably when you have a pile of statements to review. Alternatively, if you have a major life transition, such as going back to work, getting married or you have medical expenses, you will want to adjust the dashboard accordingly.
How to Design a Basic Dashboard
Track how much you are saving and how those investments are growing in two columns, advises Robert Laura, president of Synergos Financial Group, in Brighton, Michigan. "Separate out how much you are contributing and how much the portfolio is growing," he says. "If you are contributing 3 percent, but the portfolio is growing by 4 percent, you only have growth of 1 percent and that's a problem."
Create a separate column for your 401(k) contributions and the growth of your 401(k) account. Park other investments in their own columns, grouped by category (one column for mutual funds, another for alternative investments such as gold, and so on). This lets you see how each category is contributing, so you are less likely to fixate on a certain holding within that category.
Integrate a couple of forecasting tools that can help you project the future value of today's portfolio. One to consider is the CoRi Retirement Index offered by BlackRock.
Tools to Measure Your Growth
"The CoRi index tells you the likely cost of retirement so you can forecast consistently," says Chip Castille, BlackRock's chief retirement strategist. "If you want to spend $50,000 a year when you are retired, how much do you need to save now to achieve that? The CoRi tool can help you determine that. Plug in your savings, the current CoRi price and it tells you how much income it will produce and estimates the total portfolio savings outcome."
Castille also recommends using a Social Security calculator so you can track the likely income from that source, and as well as a subtotal so you can see how it all adds up to regular income after you are retired.
Another tool that can help you estimate what you'll need is the "Choose to Save" estimator, recommended by Joseph Montanaro, a certified financial planner on staff with insurance firm USAA.
Tackling Debt
Most people want to eliminate debt before they retire -- typically the mortgage, although consumer and student debt are also targets for elimination. Watching your outstanding debt evaporate is not only satisfying, but it also helps you see how the overall picture is shifting as you can direct more money to saving once certain debts are gone, Montanaro says. Finally, include a couple of columns for professional and life-stage milestones as your circumstances change.
"If you aspire to entrepreneurship, are you making progress with actually getting clients or customers and making money?" Laura asks. "A lot of people spend a boatload of time creating a business plan, but you don't have a business until you cash a check."
Ramping up a side venture to a retirement occupation takes time, effort and money, Laura points out. "A side business or new business is a speculative investment, and you shouldn't have any more than 3 percent to 5 percent of your portfolio in it," he says. "Don't overspend to start it." When you put your entrepreneurial effort in the context of your overall savings goals and likely retirement income, you can see how much you will need that side income and how much effort it requires before you retire.
If you aim to buy a vacation home, get plastic surgery or indulge in another costly retirement-transition expense, save for that separately so you can insulate your core portfolio from your splurge, Laura adds.
Finally, top off your dashboard with some virtual stickers. Montanaro suggests inserting photos of family members or hobbies in the headers -- "whatever triggers your aspirations," he says, to make your dashboard inspirational as well as functional.
One of the biggest challenges of traveling today is traveling safely. The simple act of travel puts your finances at risk, whether from direct theft, identity theft, pickpocketing or other nefarious strategies. You need to be smart, and you need to be careful.
I have traveled throughout the U.S. and to a number of foreign nations on both personal and professional trips. Along the way, I've come to rely on a handful of strategies to keep money safe. Here are five things to do whenever you travel far from home.
1. Inform Your Banks, Credit Card Issuers Before You Go
When you go far away from home, it's always a good idea to inform your bank and your credit card companies.
Why? Your bank may notice that your card is being used for transactions internationally and shut down your card without notice or with minimal notice, leaving you without a card in another part of the country or in a foreign nation. That can be a big problem.
A simple phone call to your banks and credit card companies before you travel can go a long way toward preventing a headache if your cards get canceled due to an unexpected charge from an unusual location.
2. Carry a Minimal Wallet
There's no reason for you to be strolling about in unfamiliar territory with all your credit cards and all your money in your wallet. It's just a bad idea. A simple pickpocket or thief can put you in a seriously compromised position.
A solution to this problem is to only carry one credit card when out and about. Leave a second card -- from another issuer -- in a safe place back at the hotel, ideally in a safe if one is available. If you're not driving, leave your drivers license in a secure place, too. That way, if one item gets stolen, you have backups.
3. Separate Your Money
Another strategy is to separate your cash and not keep all of it in the same place. While traveling, I leave some of my cash in a few different places in my room, vehicle and hotel safe. That way, if I were to get pickpocketed or be the victim of some other kind of theft, I'm not in an immediate disastrous situation. I also often keep a small amount of cash wadded up in the toe of my shoe (like a single $50 bill) in case I need it in an absolute pinch. Sadly, it has come in handy.
4. Use a Money Belt
Still, none of these strategies actually keep your pockets safe from prospective thieves. The solution to that is to use a money belt. A money belt is a pouch that wraps around your torso underneath your shirt, keeping your key belongings in a safe place that's difficult for anyone to get to. A thief can't touch a well-placed money belt.
I use the Eagle Creek money belt. If I'm going to need a credit card, I'll excuse myself to a restroom before a purchase, remove the card from the money belt, use the card, then return to the restroom to restore it. I also keep most of my cash in there, extracting any shortly before a purchase might occur.
5. Use a Credit Card for Purchases, Not a Debit Card
A credit card offers many financial advantages for purchases over a debit card in any situation, but that's never quite so true as when traveling.
For starters, a credit card is not linked to your savings or checking account, so a fraudster couldn't gain any direct access to your personal banking accounts. Credit cards also offer consumer protections against fraud that often do not extend to debit cards, even ones with a Visa or a MasterCard logo on them. This includes things like fraudulent charge protection, which can really help if your bank can't contact you when you're traveling.
When you return home, don't forget to pay off the balance in full. That way, you won't pay interest and you can accrue credit rewards if you have a rewards program.
Trent Hamm is the founder of the personal finance website TheSimpleDollar.com, which provides consumers with resources and tools to make informed financial decisions.
Jay-Z is banking on a Tidal wave to kick off a new music revolution. The rapper and producer has relaunched a digital streaming service called Tidal that's part of his $56.2 million purchase of Swedish streaming specialist Aspiro, best known as the parent of European music hub WiMP.
Before Jay-Z's arrival, Tidal amassed a mere 17,000 paying subscribers. However, Jay-Z has lined up an army of famous recording artists to help make it stand out in a very crowded marketplace. Rihanna, Kanye West, Madonna, Coldplay and Jay-Z's squeeze Beyoncéwere part of the relaunch, providing some serious star-power ammo to a business dominated by tech giants and well-entrenched leaders.
Tidal may have celebrities, buzz and even exclusive content, but it's not going to be easy to topple Pandora (P) and Spotify.
New Wave
The relaunched service costs $9.99 a month, in line with Spotify's premium offering and twice as much as Pandora One. Tidal also offers higher-quality music clips for $19.99 a month, making it the priciest platform on the market.
Jay-Z realizes that you can't charge more than existing services without offering more, and in that pursuit Tidal has lined up content that music buffs can't find anywhere else. It's offering exclusive music and videos. Exclusive content by Beyoncé and Rihanna popped up on Tidal over the weekend, and now Bloomberg reports that Jay-Z's breakthrough album -- "Reasonable Doubt" -- is no longer available on Spotify.
This should come as terrible news for consumers. The leading music platforms today offer tens of millions of tracks, but if services convince celebrities to make their best tunes available through just a single platform, it could force users to pay more to get all that they want, resort to piracy or give up on premium music sites altogether.
They Sit at the Bar and Put Bread in My Jar
A big problem with music fans is that they tend to be pretty cheap. Spotify is considered the most successful premium service, with 15 million paying subscribers worldwide, but that's just a quarter of its user base. The vast majority of Spotify users put up with ads and usage restrictions to enjoy the service for free. The divide between payers and freeloaders is even more pronounced at Pandora, where less than 5 percent of its 81.5 million active listeners pay less than $5 a month to strip ads out of the streams.
Folks just don't like to pay for music when it's streamed. They don't have a problem paying up for a concert, but it's a different story online, where it's too tempting to download pirated tracks or settle for legal ad-based streaming sites.
It's not just that most of the Pandora and Spotify users aren't paying. Others that have preceded Tidal in only offering premium services have struggled. Google (GOOG)(GOOGL) hasn't made waves with Google Play Music at $9.99 a month (it's also owned Songza since July, and what's happened since then?), and even Apple (AAPL) hasn't been able to turn Beats Music -- also $9.99 a month -- into a Pandora or Spotify killer.
If the two biggest names in tech and mobile platforms have failed to make a dent in Spotify and Pandora, why would Jay-Z fare any better? Offering exclusives may seem like a good idea on paper, but it will only infuriate music fans in the long run. Instead of getting folks to pay up, Tidal may wind up convincing folks to stop patronizing all premium streaming sites, since they will all be incomplete.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Apple, Google (A and C shares), and Pandora Media. Try any of our Foolish newsletter services free for 30 days. Check out our free report on the Apple Watch to learn where the real money is to be made for early investors.
According to the Tax Policy Center, 77 percent of U.S. households faced a tax increase as a result of a budget deal passed in 2013. This increase means the temptation to treat certain items as non-taxable income on a tax return is higher than before.
For the majority of people receiving disability, Social Security or child support benefits, the answer of whether it's taxable is no -- but consulting a tax professional is the best move to be sure when determining taxable income. However, other items are often overlooked, whether in the interest of saving money or otherwise. Here are some sources of taxable income to keep in mind when filing your tax return.
Contract Work
As a contractor, you are self-employed. With this comes both a standard income tax and a self-employment tax. The self-employed tax is a Social Security and Medicare tax that is assessed on contractors and other self-employed individuals.
Note that you'll claim income generated from contract work whether you do so as your primary occupation or a side business, provided that you have a net income of at least $400 or meet one of the other Form 1040 filing requirements. You'll also have to pay quarterly taxes.
Gambling Winnings
According to the IRS, gambling winnings are fully taxable income. These include winnings from bingo, casinos, dog races, horse races, poker tournaments, raffles and more. Also included are cash prizes such as lottery winnings.
One that would be easy to overlook is a non-cash prize. If you win a prize such as a car or vacation, you must report the fair market value of it on your taxes.
Note that you may deduct gambling losses, but only enough to offset your winnings. So, if you hit the Atlantic City casinos and win $500 and lose $700 next time around, you could cancel out your winnings and pay no taxes on them. However, the remaining $200 will be treated as money spent and is still taxable.
Gifts
Gifts that you give to someone else could be taxable. The good news it that you can give up to $13,000 worth of gifts to an unlimited amount of recipients tax-free. That's $14,000 per person, so you could, for instance, buy each of your four grandchildren a $14,000 car without giving a "gift" to Uncle Sam.
Additionally, certain gifts are considered non-taxable income altogether. These include:
Tuition expenses.
Medical expenses.
Gifts to your spouse.
Gifts to political organizations.
Note that gifts to charities are tax-deductible.
Inheritance
If you inherit an estate that is worth $5 million or more, it will be taxed. To pay this inheritance tax, you'll need to complete Form 706. This is a 31-page form that, at first glance, might make you reconsider accepting the estate to begin with - but if you have to file this form in the first place, the wealth you've obtained should offset the hassle. Note that you must file Form 706 within nine months of inheriting the estate.
Mutual Fund Gains
The sale of mutual funds could be taxable, depending on whether you incurred a gain. When determining taxable income on a mutual fund sale, you'll need to figure out the basis (how much you paid) for the shares you sold. Unfortunately, there are plenty of what-ifs and potential snags when attempting this calculation.
There are two methods of determining basis: Cost basis and average basis. As an example, let's go with the "easier" route of cost basis. Within the cost basis approach, there are two options: Specific share identification and first in, first out. Specific share identification involves identifying the specific shares you sold, which can be cumbersome if you have made multiple purchases at various times. The FIFO method is a bit less complicated, so let's go with that. For example, suppose you made the following purchases into your mutual fund account in 2013:
March 3: $5,000 purchase of 200 shares at $25 a share.
May 5: $6,000 purchase of 300 shares at $20 a share.
Aug. 9: $3,000 purchase of 100 shares at $30 a share.
Then, in 2014, you sold 350 shares at $27 a share for a total of $9,450. Did you incur a gain? To figure this out under the FIFO method, you'd calculate the total purchase price of the first 350 shares you purchased. We know you paid $5,000 for the first 200 shares, so now we have 150 shares left to calculate. Take half (150 shares) of the second purchase, multiply by the share price of $20, and we arrive at $3,000. So, the basis is as follows:
$5,000 + $3,000 = $8,000
Now, to figure out your gain, the calculation is as follows:
$9,450 - $8,000 = $1,450
So, you'd have to pay taxes on the $1,450 gain on your mutual fund sale.
It's easy to overlook the mentioned items, but doing so is a risky move and could get you in hot water for tax fraud. If you feel overwhelmed with these or any other items on your tax return, seek the assistance of a tax professional. That way, after the filing deadline, you won't have to cross your fingers every time you open your mailbox.
Yoon S. Byun/The Boston Globe via Getty ImagesBy Mitch Lipka
When it comes to hotel stays, Gary Burris is loyal to a fault.
In about 20 years of traveling, he has stayed 1,079 nights in Marriott International (MAR) hotels, where he expects -- and receives -- a certain level of service, says the 51-year-old sales manager for Oregon-based Tec Laboratories.
Hotels covet loyalty from customers like Burris. More than two-thirds of frequent travelers stay with the same hotel company more than half their days on the road, according to a 2014 study on hotel loyalty by Deloitte Consulting.
The drive to keep them coming is creating a kind of loyalty program escalation, just ahead of the busy summer travel season. Hilton (HLT) and Marriott have by far the most popular hotel loyalty programs, according to a 2014 study by MMGY Global, and Wyndham (WYN) unveiled a plan for its hotels in early April that it hopes will jump it ahead in market share.
The idea Wyndham claims will be transformative is awarding a free room-night for 15,000 accumulated points (you get 10 points per dollar spent) at any of the chain's 7,500 properties on any day without blackouts. In other words, you could earn your reward staying at the chain's lower-end Super 8 or Microtel motels and get your free room at one of its top-end properties.
By comparison, Hilton and Marriott have the standard tiered system of reward redemption: The higher the level hotel, and the busier the season, the more points it takes to get a room. Marriott has five tiers; Hilton has 10.
Wyndham Chief Marketing Officer Josh Lesnick says travelers have complained about all the complexities of earning free stays -- with numerous levels to sort out. Instead, in Wyndham's plan, all 7,500 hotels are in the same bucket.
Points Last
Busy travelers say that their loyalty is less about earning points and more about how they are treated. Especially good treatment warrants an especially deep loyalty.
Leora Lanz, for one, is particularly devoted to The Lenox Hotel for her frequent stays in Boston.
"The staff knows me and my family already, and treat us like we're in our home away from home," Lanz, 50, says. While she is a consultant to hospitality companies, based in Long Island, The Lenox isn't a client. The hotel earned her respect the old-fashioned way -- through good service.
You want to hear your name. You want to know the company knows you're a loyal customer.
When Hurricane Sandy knocked out power on Long Island and Lanz sought an escape from the devastation, she called The Lenox. After her family's 10-hour drive to get there, she says they were warmly welcomed, given snacks and led to a room set up to accommodate all five of them and even their dog.
"You want to hear your name. You want to know the company knows you're a loyal customer," says Matthew D'Uva, president and chief executive officer of the Society of Consumer Affairs Professionals.
Extra-special service includes running routes mapped out for a frequent jogger, allowing repeat guests to leave things behind or having a treat awaiting a known foodie. "Use the data to create unique experiences," D'Uva says.
Road warriors who have experienced an extraordinary level of service explain that loyalty is a two-way street. Making one-on-one connections with staff you see on each stay is key. Those relationships, they say, can be the entree to having the hotel call a sister property you're going to stay at and extend that same red carpet.
"By building relationships with the property and key staff, expressing your personal gratitude, and most of all, being a friend, not a guest, you'll find that being loyal to the property far outweighs being simply brand loyal," says Andy Abramson, CEO of the marketing firm Comunicano Inc.
(The author is a Reuters contributor. The opinions expressed are his own.)
Bebeto Matthews/APThe Honda Civic concept car debuted at the New York International Auto Show last week.By TOM KRISHER
DETROIT -- When auto companies roll out exciting new models like they did at last week's New York auto show, the unveilings can sometimes push down the price of cars already on sale.
Usually the immediate impact is small, according to industry analysts, but the deals can get a whole lot better once the new models hit the showrooms and the automakers try to clear the old models from dealer lots. And the extent of the impact depends on whether the latest models are significantly more appealing than the old ones because of new features or styling changes.
Last week in New York, Honda unveiled a new Civic compact that looks like a European sports car, and Chevrolet showed off a new Malibu midsize car that looks like a coupe, with more legroom better gas mileage and other features that one-up the current model. Analysts say it's too early to tell if prices will drop on the current Civics and Malibus.
Car buyers recognize the value when there's a major redesign if it's feature-rich, said Alec Gutierrez, senior analyst with Kelley Blue Book.
Here are some questions and answers about what to expect when new models are introduced:
When new cars are unveiled, do prices immediately fall on existing models?
This varies by whether media coverage of the new model is unexpectedly positive or negative, and by how well automakers manage their inventories during the year, says David Wagner, senior manager for analytics with the NADA Used Car Guide. If publicity is good and customers are excited, then values on outgoing models can fall. But the decline usually is small, around 2 or 3 percent in the first several weeks of media coverage. Higher inventories also can reduce prices.
Wagner saw prices fall a small amount after recent redesigns of the Honda Accord, Ford Mustang and Ford F-150 pickup truck, all of which made great improvements or added features to the vehicles.
Hyundai's Elantra compact was dramatically improved in 2011 with sleeker looks and far better performance, said Gutierrez. With such a big change, he watched the values to see if the old model would plummet. But the price decline was very small, far less than he expected, he said.
What about later, when new models get to showrooms?
All automakers discount outgoing models in late summer and early fall to clear room on dealer lots for new models. Typically, those discounts run 2 to 4 percent off the sticker price as the new cars arrive. But the big deals come later in the fall, especially if the automakers are having trouble getting rid of the year-old models. Then the discounts can go as high as 5 or even 10 percent if new models are significantly better than the old ones, according to analysts.
The lower prices can often entice people to buy the outgoing model even if the new one is much better.
"In the fourth quarter, that's where you're going to see that 5 to 7, upwards of 10 percent that we typically see," Gutierrez said.
Wagner says the price cuts late in the fall often come on vehicles that have "uncommon colors and configurations" that remain on dealer lots.
What about Malibu and Civic, with new generations that appear to be greatly improved?
It's too early to tell if the debuts in New York last week had an impact on values of the current models. The Malibu already was being deeply discounted to keep it affordable against heavy competition from other midsize cars, Gutierrez said.
"It's unlikely we will see a dramatic impact for either vehicle," said Wagner. "We may see a small drop in prices for the 2015 model year over the next few months, but in general, the excitement or lack of excitement for these outgoing models is already built into their prices."
How can I check to see if prices are dropping?
Websites such as Kelly Blue Book, NADAguides, TrueCar and edmunds.com show invoice and sticker prices for new vehicles, and some calculate true market prices. Go to each of the sites for details.
Mark Lennihan/APThirteen years after the last Continental rolled off the assembly line, Ford is resurrecting its storied nameplate. This concept was shown off at the New York Auto Show.
Ford (F) has unveiled its Lincoln Continental concept. The big, plush luxury sedan previews a new Lincoln model that Ford plans to offer next year. It will replace the current Lincoln MKS, a slow seller that has received tepid reviews, and it will serve as a flagship for the brand in the U.S. and China.
Yes, China. Ford has begun a huge effort to establish its old luxury brand in China, and the new Continental will be a key part of its strategy.
Lincoln Has a Unique Opportunity -- in China
At one point, former Ford CEO Alan Mulally was determined to kill the Lincoln brand, thinking it a slow-selling drain on Ford's resources. But Mark Fields, who eventually became his successor, talked him out of it. Why?
The answer seems to be that Ford sees a big opportunity for the brand in China. Kumar Galhotra, the Ford executive who serves as president of the Lincoln brand, says that Ford's market research in China uncovered something very interesting.
"Lincoln is a highly regarded brand in China," Galhotra said during an interview in New York last week. "Its perception of prestige is better than that of Audi. The favorable opinion is better than Lexus. And a lot of that is driven through our heritage. Chinese consumers are very tuned into the Lincoln heritage."
Galhotra and other Ford executives have said that Chinese consumers see Lincoln as the brand of Hollywood movie stars and U.S. presidents. That hasn't really been true in a while, but that doesn't matter: Ford is determined to bring a Hollywood-worthy Lincoln to curious Chinese customers.
That's where the Continental comes in.
New Lincoln Continental Aims to Satisfy Chinese, American Tastes
Galhotra said that Ford "took a lot of input from Chinese customers while designing this vehicle." Chinese tastes and needs influenced everything from the Continental's soft-but-imposing shape to the (vast) size of the rear-seat space.
In China, luxury-car buyers are often chauffeured, meaning that the back seat is where the owner rides. The Continental Concept caters to rear-seat passengers with separate panels for climate controls, a lap tray that can support a tablet computer -- and most important, a lot of legroom.
But of course, Chinese customers aren't the only ones who will enjoy having room to stretch out in the back seat. "I think that American customers will enjoy the big back seats just as much," Galhotra said.
Galhotra confirmed that the Continental concept is "very close" to the new Lincoln Continental sedan that Ford will put into production next year. And while China will be an important market for the new Continental, perhaps even the most important, Galhotra says that the Continental will be made only in the U.S. for now.
More "Global" Cars Take Chinese Tastes into Account
Many cars nowadays are developed as global models, allowing automakers to reap maximum advantage of their economies of scale. With China now the world's largest new-car market, that means that Chinese tastes are having more and more of an influence on the cars we buy -- and not just big expensive luxury sedans.
That's not necessarily a bad thing. As Galhotra said, Americans also like having more rear-seat legroom. But the effort to balance the needs of American and Chinese buyers might have resulted in some new compromises. For instance, the Continental Concept's body lines are soft in a way that a Chinese buyer might see as "understated elegance." Would an American think it "a bit bland"?
There's nothing bland about the overall shape and presence of the Continental concept in person. But its styling is clearly less dramatic than it could have been. It's an example of the balancing act between regional tastes that more and more automakers are doing with their latest models.
Much of this will be great for car-buyers everywhere: We all want safer, more practical, more fun-to-drive cars. But there's no doubt that the voice of the Chinese car-buyer is going to be heard more loudly than ever before, even by the most American of brands.
Motley Fool contributor John Rosevear owns shares of Ford. The Motley Fool recommends and owns shares of Ford. 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.
Walgreen plans to close about 200 U.S. stores as the nation's largest drugstore chain expands on a $1 billion cost-reduction plan it announced last August.
The Deerfield, Illinois, company said Thursday that it also will reorganize its corporate operations and streamline its information technology and other functions. It expects the moves to add $500 million to its estimate for cost savings from its three-year plan.
The store closings amount to about 2 percent of the 8,232 drugstores it runs in the United States, Puerto Rico and the U.S. Virgin Islands.
Walgreen said its moves will lead to a "faster and more agile company." It expects to book pre-tax charges for the restructuring of between $1.6 billion and $1.8 billion as it implements the program.
Late last year, Walgreen completed a nearly $16 billion deal to purchase the remaining stake of European health and beauty retailer Alliance Boots that it didn't already own. The company was renamed Walgreens Boots Alliance Inc. (WBA).
Walgreen initially bought a 45 percent stake in Alliance Boots, which runs the United Kingdom's largest pharmacy chain, in 2012 for about $6.7 billion in cash and stock. Analysts expect Walgreen will get added negotiating muscle over supplies like pharmaceuticals from the Alliance Boots deal and another ownership stake it acquired in pharmaceutical wholesaler AmerisourceBergen Corp. (ABC). But the drugstore chain disappointed investors last August when it also lowered a forecast for earnings it expects after combining with Alliance Boots.
Walgreen also said Thursday that it earned $2.04 billion, or $1.93 a share, in its fiscal second quarter. Earnings, adjusted for one-time gains and costs, were $1.18 a share.
That topped Wall Street expectations. The average estimate of 14 analysts surveyed by Zacks Investment Research was for earnings of 94 cents a share.
But the drugstore chain's revenue of $26.57 billion fell short of analyst forecasts for $27.73 billion.
Walgreen also announced a forecast for full-year earnings in the range of $3.45 to $3.65 a share.
Analysts expect, on average, earnings of $3.62 a share, according to the data firm FactSet.
Walgreen shares edged up 32 cents to $88 in premarket trading about 90 minutes before the market open. The stock had already climbed about 15 percent so far this year, as of Wednesday.
DETROIT -- If you live where salt is used to clear the roads of snow and ice, U.S. safety regulators have a message for you: Wash the underside of your car.
The message came Wednesday from the National Highway Traffic Safety Administration, which closed a five-year investigation into rusting pipes that carry brake fluid in about 5 million older Chevrolet, Cadillac and GMC pickups and SUVs, without seeking a recall.
Instead, the agency blamed the problem on rust caused by road salt and a lack of washing. It determined that it was not the result of a manufacturing or design defect.
The agency urged people in 20 cold-weather states and Washington, D.C., to get their car and truck undercarriages washed several times during and after the winter, and to get their brake lines inspected for rust and replace them if necessary. The warning underscores the importance of washing highly corrosive salt from beneath a car because over time, it can cause suspension parts, the frame, or other components to corrode and fail.
3,645 Complaints of Brake Pipe Rust
NHTSA's finding that the GM trucks weren't defective came even though it received 3,645 complaints of brake pipe rust in the General Motors vehicles from the 1999 to 2007 model years, including 107 crash reports and 40 reports of injuries. Seventy-five percent of the complaints came from trucks in the first four model years covered by the investigation, 1999-2003, the agency said.
Investigators checked similar vehicles in Pennsylvania, surveyed owners in Ohio, and did random checks in other salt-belt states to determine that the same problem exists in just about every other vehicle from the same era because brake lines were all made of the same steel materials with aluminum coatings. The industry gradually switched to nylon or plastic-coated steel lines in the mid-2000s, NHTSA said.
The investigation started after NHTSA received a complaint from a Middletown, Ohio, man in March of 2010, who said the pipes that carry brake fluid on his 2003 Chevy Silverado rusted and leaked, causing a sudden reduction in braking power.
Yet it took until Wednesday for the agency to resolve the matter. The agency acknowledged that the probe took too long and said its Office of Defects Investigation is understaffed. Additional staffing and funding are in the Obama administration's proposed budget, NHTSA said. The agency said that in recent years it also has concentrated on more serious recall issues that involved multiple crash deaths.
Most automatic car washes have jets that spray the undercarriage with water to hose off the salt. Some, like the Jax Kar Wash chain, based in Southfield, Michigan, also can spray undercarriage rust inhibitor during winter months, said Shawn Connelly, a general manager.
NHTSA's car-wash advisory applies mainly to owners of vehicles from the 2007 model year or older in Connecticut, Delaware, Illinois, Indiana, Iowa, Maryland, Massachusetts, Maine, Michigan, Minnesota, Missouri, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, West Virginia, Wisconsin and the District of Columbia.
Phil Klein/APLynda Weinman and Bruce Heavin founded Lynda.com.
Professional social network operator LinkedIn said today that it would buy privately held online education company lynda.com in a cash-and-stock deal valued at about $1.5 billion.
Lynda.com offers courses in a number of languages aimed at improving business, technology and creative skills. Subscription fees for its courses range between $250 and $375 per year, according to its website.
With the integration of lynda.com and LinkedIn, users will know what skills are needed for the available jobs in their desired city, Ryan Roslansky, LinkedIn's head of content, wrote in a blog. "Imagine being a job seeker and being able to instantly know what skills are needed for the available jobs in a desired city, like Denver, and then to be prompted to take the relevant and accredited course to help you acquire this skill. Or doing a search on SlideShare to learn about integrated marketing and then to be prompted with a lynda.com course on the same subject."
Cash and Stock Deal
LinkedIn said it would pay about 52 percent in cash and about 48 percent in stock for the acquisition. The deal will bolster LinkedIn's hiring business, which has clocked revenue growth of nearly 50 percent in each of the last three quarters, helped by rapid expansion in international markets such as China.
LinkedIn shares were up about 1.5 percent in light premarket trading on Thursday morning.
"Founded in 1995 by Lynda Weinman and her husband Bruce Heavin, Lynda.com lets users learn business, technology, software, and creative skills through videos," BusinessInsider reported. "Individuals can access Lynda on their own, but corporations and schools can purchase subscriptions too."
Michael Nagle/Bloomberg via Getty ImagesBy Lucia Mutikani
WASHINGTON -- The number of Americans filing new claims for jobless benefits rose less than expected last week and the four-week moving average of claims hit its lowest level since 2000, suggesting an abrupt slowdown in job growth in March was likely a fluke.
Initial claims for state unemployment benefits increased 14,000 to a seasonally adjusted 281,000 for the week ended April 4, the Labor Department said Thursday. It was the fifth straight week that claims remained below 300,000, a threshold that is associated with a strengthening labor market.
The claims data provide no confirmation of the March employment slowdown.
"The claims data provide no confirmation of the March employment slowdown," said John Ryding, chief economist at RDQ Economics in New York.
U.S. Treasury debt yields rose on the data and also as Greece's 450 million euro loan payment to the International Monetary Fund reduced safety bids for government debt. U.S. stocks edged up at the open while the dollar rose against a basket of currencies.
Job growth slowed sharply in March, with nonfarm payrolls increasing by only 126,000, ending a 12-month stretch of employment gains above 200,000. But with the weakness mostly concentrated in the weather-sensitive leisure and construction sectors, economists downplayed the slowdown.
Last week's tepid employment report joined weak consumer and business spending, industrial production and housing starts data in suggesting the economy grew at a sub-1 percent annual rate in the first quarter.
Activity has been hit by a harsh winter, which is estimated to have chopped as much as seven-tenths of a percentage point from first-quarter growth. A now-settled labor dispute at normally busy ports on the West Coast, softer global demand and a stronger dollar also have weighed on the economy.
Economists had forecast claims rising to 285,000 last week.
A Labor Department analyst said there was nothing unusual in the state-level data. Claims tend to be volatile around Easter because of the shifting nature of the holidays.
The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 3,000 to 282,250 last week, the lowest level since June 2000.
"If claims remain this low, and we think they might even head lower in the coming weeks, it will be hard to claim there is persistent weakness in the labor market," said Guy Berger, an economist at RBS in Stamford Connecticut.
The claims report also showed the number of people still receiving benefits after an initial week of aid fell 23,000 to 2.30 million in the week ended March 28. That was the lowest level since December 2000.
The labor market strength was underscored by a report on Tuesday showing job openings surging to a 14-year high in February and less competition for jobs among the unemployed.
A separate report Thursday from the Commerce Department showed wholesale inventories rose in February as sales remained weak, suggesting wholesalers might have little incentive to aggressively restock warehouses in coming months.
Stocks at wholesalers gained 0.3 percent after advancing 0.4 percent in January. Sales fell 0.2 percent in February after declining 3.6 percent the prior month.
At February's sales pace it would take wholesalers 1.29 months to clear shelves, unchanged from January.
Blue Bell via AP
DALLAS -- The number of people sickened by a foodborne illness linked to some Blue Bell ice cream products has grown to include three others in Texas, according to federal health authorities.
Dr. Brendan Jackson, a medical epidemiologist with the Centers for Disease Control and Prevention, said tests confirmed that three people in Texas have a similar strain of listeria previously found in five others at a hospital in Wichita, Kansas.
Three of the five in Kansas have died and health officials there say listeriosis, also known as listeria, might have been a contributing factor in the deaths.
The three in Texas also were hospitalized at some point from 2011 to 2014 for unrelated problems when they developed listeria, the CDC said in a statement. They apparently became ill when they ate Blue Bell ice cream produced at the company's plant in Broken Arrow, Oklahoma.
The manufacturing plant, one of four operated by the company, has been temporarily closed.
Preliminary tests indicate another three people hospitalized at some point from 2010 to 2012 appear to have a similar strain of listeria as the others, according to the CDC, but further testing is necessary before confirming a connection. Jackson said one of those patients was hospitalized in Texas while the other two were admitted elsewhere.
"We're continuing to monitor for additional cases and ensuring we're taking all actions needed to protect public health," he said.
Big Recall
Blue Bell Creameries on Tuesday announced a third product recall as a result of the contamination. The company, based in Brenham, Texas, has recalled more than 25 of its products since last month.
"Our prayers and sympathies are with the families who have lost loved ones or who have suffered illnesses that may have been complicated by listeriosis," the company said in a statement Thursday. "The fact that our products may be linked to these events is very distressing to us. We are sorry for this news and we are doing everything possible to determine the cause of the outbreak."
Company officials said they're working with federal health inspectors to resolve the matter.
Listeria is a life-threatening infection caused by eating food contaminated with bacteria called Listeria monocytogenes, the CDC said. The disease primarily affects pregnant women and their newborns, older adults, and people with immune systems weakened by cancer, cancer treatments or other serious conditions.
The Texas Rangers baseball club said Wednesday that they won't offer Blue Bell at their upcoming homestand against the Houston Astros. The Astros previously said Blue Bell wouldn't be offered on their opening day earlier this week. Large retailers such as Walmart have in recent weeks either pulled the items included in the recalls or removed all Blue Bell products from their shelves.
The implications are serious, the group said, given that more than 70 million taxpayers pay tax preparers to do their income tax returns. The other groups that participated in the study were the Florida Alliance for Consumer Protection and Reinvestment Partners in North Carolina.
"To see this level of errors is extremely disturbing," Chi Chi Wu, staff attorney at the National Consumer Law Center, said in a statement. "A tax return may be the most important financial document for an American consumer during the year, and consumers who use paid preparers are placing their financial well-being in the preparers' hands."
This isn't the first time tax preparers flunked such an examination. The Government Accountability Office last year did a limited test and found that only two of 19 tax preparers the agency tested came up with accurate refund amounts.
Minimal Standards for Preparers
This isn't the first time that tax preparers flunked such an examination. The Government Accountability Office last year did a limited test and found that only two of 19 tax prepares the agency tested came up with accurate refund amounts.
It's a major issue, the NCLC said, is that just about anyone can put out a shingle and say they are a tax preparer. There are virtually no standards.
Only Maryland, Oregon, California and New York have rules that establish a minimum level of education, training or competence, the NCLC said. Amelia O'Rourke-Owens, a community and economic development fellow at Reinvestment Partners, noted this irony: "All 50 states regulate hairdressers, but only four regulate tax preparers."
The test tax returns involved returns prepared for either a single parent or for a graduate student, the NCLC said. Most preparers botched the single parent scenario by not properly accounting for the amount of time spent with the other parent as well as omitting side income that should have been reported.
Of 14 tax preparers given the graduate student scenario, 10 failed to use the right form to record income. And of the four who used the right form, three played fast and loose with deductions.
The groups advocate regulating tax preparers and establishing minimum standards.
20th Century-Fox/ApThe first "Star Wars" movie came out in 1977.
It's going to be a big weekend for "Star Wars" fans. Disney (DIS) is doing something that George Lucas never did, making the entire existing catalog of "Star Wars" movies available as digital downloads.
It won't come cheap. Any of the six movies will cost $19.99, or you can do what most die-hard fans will do and pay $89.99 to download the entire bundle. However, the bundle does include hours of special features.
It's a brilliant move by Disney. The family entertainment giant is getting ready to release the seventh installment in the series later this year, and there's nothing like making all six prior releases available digitally to get the public up to speed with the series. It's just part of Disney's master plan to take over your wallet.
Disney Uses the Force
When Disney spent a little more than $4 billion to buy Lucasfilm, it was just a matter of time before it would breathe new life into the "Star Wars" franchise and cash in on the existing catalog. Disney has spent billions to acquire Pixar, Marvel and more recently Lucasfilm. It's not afraid to cut a 10-figure check, as long as it has a plan to raise the bar.
We've known since last year that "Star Wars VII: The Force Awakens" will hit theaters come December, and we also know that the eighth chapter of the franchise will hit a multiplex near you two years later. The ninth and final chapter is slated for a 2019 release. Disney has also announced that it will be putting out movies based on characters within the "Star Wars" universe. The first stab at an offshoot -- "Rogue One" -- will star Felicity Jones and hit theaters next year.
It won't stop there. Disney is widely expected to give "Star Wars" a bigger role at its theme parks, retail stores, and cruise ships. Disney doesn't mess around when it writes big checks.
Farewell to DVDs
It's not just Disney making the most of its investment. "Star Wars" fans snapping up Friday's digital bundle will have to decide what they want to do with their old VHS tapes, DVDs and Blu-ray discs. After all, they can make some of that $19.99 or $89.99 back by trading them in.
It's not rocket science. Amazon.com (AMZN) will buy back old "Star Wars" DVDs, and its website makes it seamless to assemble a list of physical media items for the leading online retailer to repurchase. It will even spring for the shipping cost. Those willing to do a little more legwork can see what they can fetch on eBay or Craigslist for their old physical media merchandise.
The trade-ins don't have to stop at "Star Wars." As more content becomes available online, it suddenly seems as if physical media is moving on. There's a disturbance in the force, and a little spring cleaning of old discs and tapes makes sense -- and cents.
It's also a potentially better platform. You won't be getting any collectible covers, but digital media won't get scratched or lost the way your old DVDs can. It's also far more portable. Amazon, for example, allows purchased downloads to be streamed through many Internet-connected devices beyond the initial download. Disney and Lucas are making it possible for you to enjoy your old favorites in a new way, but this also might be the catalyst to transform the way you consume all video in the future.
Motley Fool contributor Rick Munarriz owns shares of Walt Disney. The Motley Fool recommends and owns shares of Amazon.com and Walt Disney. Try any of our Foolish newsletter services free for 30 days. Bring the magic of dividends to your portfolio: Check out our free report on our favorite high-yielding dividend stocks.
The wear and tear that washing machines put on your clothes can put a dent in your budget. Luckily, there are a few simple laundry tricks that can help you make your clothes and linens last.
It's no secret that tumble drying can damage your garments, so the less time your clothes spend in there the better. Try speeding up the process with a few tennis balls. Placing these in with your load can cut your drying time by as much as 50 percent.
Simply wrap each ball in a sock to prevent any lint from escaping before you throw them in. As the dryer spins, the balls help separate the clothes, which in turn allows more warm air to circulate to the center of the load. The more balls you add, the faster the drying time. And best of all, these can be used over and over again.
If you have old towels that always seem to smell and don't absorb as well as they used to, chances are the cause of this is detergent and fabric softener build-up, which can accumulate in the fibers over time. To get them fresh and fluffy again, all you need is a little vinegar and baking soda.
Simply place the offending towels into the washer and add 1 cup of distilled white vinegar. Then start your cycle on the warmest water setting possible. Once you're done, repeat the process, except this time add 1/2 cup of baking soda. When that's through, just put the items into the dryer, and you're done. The vinegar and baking soda combo is really effective at stripping old residue from the fibers, making your old towels just like new. Bonus: This also works great for brightening and revitalizing dingy white sheets.
So remember, you can keep your laundry clean without deteriorating it in the process. With a little know-how, your clothing and your budget can last a lot longer than you think.
Dan Marschka/Intelligencer Journal via APBy MATTHEW CRAFT
NEW YORK -- he steep cost of caring for the elderly continues to climb. The median bill for a private room in a nursing home is now $91,250 a year, according to an industry survey out Thursday.
The annual "Cost of Care" report from Genworth Financial (GNW) tracks the staggering rise in expenses for long-term care, a growing financial burden for families, governments and insurers like Genworth. The cost of staying in a nursing home has increased 4 percent every year over the last five years, the report says. Last year, the median bill was $87,600.
Most people don't realize how expensive this care can be until a parent or family member needs it.
"Most people don't realize how expensive this care can be until a parent or family member needs it," said Joe Caldwell, director of long-term services at the National Council on Aging. "And then it's a real shock."
The annual report from Genworth, which sells policies to cover long-term care, looks at costs for a variety of services, including adult daycare, and home health aides. And nursing home bills are rising at the fastest pace, twice the rate of U.S. inflation over the last five years. One year in a nursing home now costs nearly as much as three years of tuition at a private college.
For its report, Genworth surveyed 15,000 nursing homes, assisted living facilities and other providers across the country in January and February. It found wide differences from state to state. In Oklahoma, for instance, the median cost for a year in a nursing home came out to $60,225. In Connecticut, it was $158,775. Alaska had the highest costs by far, with one year at $281,415.
So, who pays the nursing-home bill? "A lot of people believe Medicare will step in and cover them, but that's just not true," said Bruce Chernoff, president and CEO of The Scan Foundation, a charitable organization. Medicare will cover some short visits for recovery after a surgery, for instance, but not long-term stays.
Often enough, experts say senior citizens wind up spending their savings until they hit their last $2,000, and at that point they can turn to Medicaid, the government's health insurance for the poor, to help cover the bill. As a result, Medicaid pays for more than half of the country's long-term care bill. That cost accounts for more than a quarter of Medicaid spending, according to the Kaiser Family Foundation.
Genworth and other insurers offer long-term care policies to help people shoulder the financial burden. But people have to be healthy enough to qualify for coverage. Those who take out policies find their insurance bill rises steadily as they age.
Caldwell described Genworth's survey as essentially a marketing pitch. "Of course they want people to see how much it costs to sell long-term care insurance," he said. "What they're not telling you is that the long-term care coverage is becoming more and more unaffordable for middle-class families."
Mounting costs have also pushed many insurance companies out of the business. Four of the five largest providers have either scaled back their business or stopped offering new policies. The largest provider, Genworth, has struggled under the weight of old policies.
Less-intensive care remains much cheaper than staying at a nursing home, according to Genworth's survey. One year in in an assisted-living facility runs $43,200. A year of visits from an agency's home health aides runs $45,760.
NEW YORK -- U.S. stocks rose Thursday, with energy shares leading the advance as crude oil rebounded off a sharp decline, while investors bet that companies would top lowered expectations this earnings season.
The day's gains were broad, with eight of the S&P 500's 10 industry sectors up on the day. The market extended its gains in afternoon trading, putting the S&P 500 about 1.3 percent away from its record close.
Equities have struggled for direction of late, with investors seeing limited upside potential in equities, but also few alternatives for yield. Many investors are looking ahead to the first-quarter earnings season for market guidance.
Earnings for S&P 500 companies are seen falling 2.8 percent in the first quarter, according to Thomson Reuters (TRI) data, compared with the rise of 5.3 percent that had been forecast on Jan. 1. The drop in profits is largely related to strength in the dollar, which analysts said wouldn't necessarily be a long-term detriment to stock prices.
"To the extent the dollar means companies are losing business, it's a problem, but if earnings are just being translated into a stronger dollar, that's less of a problem," said Jim McDonald, chief investment strategist at Northern Trust Asset Management in Chicago.
"An earnings recession is only a real problem for stocks if it is accompanied by an economic recession, which isn't the case here. We're positioned for an upside move as expectations have been lowered to the point where we're set up for a positive surprise."
Earnings Season
Among early reporters, Alcoa (AA) fell 3.3 percent to $13.22 a day after it reported revenue that missed expectations. Bed Bath & Beyond (BBY), which also reported weaker-than-expected results late Wednesday, fell 5.4 percent to $73.46.
The energy sector climbed 1.5 percent on the back of a 1.8 percent rise in Brent crude, which rebounded from a drop of 6 percent Wednesday. Continued uncertainty about an agreement on Iran's nuclear program also provided a lift. ConocoPhillips (COP) rose 3.4 percent to $67.
In the latest economic data, jobless claims rose in the latest week, though the rise was smaller than anticipated.
The Dow Jones industrial average (^DJI) rose 56.22 points, or 0.31 percent, to 17,958.73, the Standard & Poor's 500 index (^GSPC) gained 9.29 points, or 0.45 percent, to 2,091.19 and the Nasdaq composite (^IXIC) added 23.74 points, or 0.48 percent, to 4,974.57.
Declining issues outnumbered advancing ones on the NYSE by 1,513 to 1,506, for a 1.00-to-1 ratio on the downside; on the Nasdaq, 1,393 issues fell and 1,314 advanced for a 1.06-to-1 ratio favoring decliners.
The benchmark S&P 500 index was posting 13 new 52-week highs and 1 new lows; the Nasdaq composite was recording 76 new highs and 29 new lows.
About 5.78 billion shares traded on all U.S. platforms, according to BATS exchange data, below the month-to-date average of 6.25 billion.
What to watch Friday:
The Labor Department releases import and export prices for March at 8:30 a.m. Eastern time.
The Treasury Department releases federal budget for March at 2 p.m.
The insurance industry often urges customers to check their policies every once in a while to make sure everything is up to date. While that sounds like self-serving advice -- because you know any conversation with your insurance agent will end with a pitch to buy more insurance -- it's actually a good idea.
As Bill Swymer, an adjunct finance professor at Bentley University in Waltham, Massachusetts, observes: "The No. 1 reason people need to be reviewing all insurance policies is because circumstances change, and you do not want to be left underinsured or paying for insurance you no longer need."
If you bought life insurance when you were married or after your first child was born, and you're now on baby No. 4, you're probably long overdue for an upgrade. Or maybe after you bought a new car, your insurance policy covered you for every possible circumstance. If you're now driving a clunker that isn't worth the gas you're putting in the tank, you are probably vastly overpaying for your coverage. Some other things you might realize in a review.
You Might Catch Mistakes
You probably have a lot of insurance policies -- health insurance, life insurance, auto insurance, homeowners insurance. There may be an error or two or three in one or more of those policies. For instance, Aflac, which provides supplemental health insurance, found in its annual employee benefits study, which surveyed 5,209 employed adults and 1,856 benefits decision-makers at companies, that 42 percent of workers waste up to $750 each year on insurance benefit mistakes.
You Might Find Better Rates
Ken Davidson, co-founder of Dallas-based Eagle Independent Insurance, points out that you may lower your premium if you regularly compare insurance quotes. "Insurance premiums can frequently change for several reasons," he says, citing homeowners insurance as a type you'd want to look at fairly often. The crime rate, for example, could go up or down, changing your rates. You may have purchased your homeowners insurance policy after recent storms inflated rates, and perhaps yours haven't come down but competitors' rates have.
"So only by comparing different policies at every renewal period -- or even more frequently -- can consumers ensure they're getting the best deal at that time," Davidson says.
You Might Find More Assets That Need Coverage
Your life doesn't just change. What you cover does. Leigh Needelman, CEO of Florida Assurers, an insurance agency in Miami Beach, Florida, recalls a client whose diamond ring was stolen in a home burglary. Fortunately, it was insured, and the client was sent a $6,000 check. So the client went to the jeweler to replace the diamond ring. But she wasn't able to replace the diamond ring -- or if she did, she had to kick in a lot of her own money. "When the jeweler was given the check to replace the diamond ring, he advised [her] that the ring had appreciated to $18,000," Needelman says.
Even if you aren't concerned about insuring your engagement ring -- maybe you're single or need a microscope to see the diamond and figure it isn't worth the trouble -- if you've been around a while, you have probably collected some stuff over the years, and perhaps a lot of it is expensive. For instance, maybe you locked in your home insurance rates when your new home was filled with secondhand furniture. If all of that has been replaced with sofas and a dining room table purchased from an actual furniture store, and that 20-inch TV was swapped for a 60-inch set, it may be time to discuss these upgrades with your homeowners insurance agent.
Sure, you'll likely see your rates go up, which is painful, but if a disaster occurs, you'll actually be covered for what you own. According to Liberty Mutual New Beginnings Report, which surveyed 1,936 American adults, fewer than one in five Americans adjust their insurance policy after making a major purchase. Only 18 percent have formal documentation of their belongings, meaning, apparently, that everyone else just makes an estimated guess and stores all the information in their heads. One-third of Americans don't know the value of their household possessions, and almost 10 percent are unaware that they should check to make sure they have enough coverage to protect their belongings from theft or damage, the study found.
You Might Decide It's Time to Bundle
If you have four different policies with four different carriers, you might want to bundle a few. That is, have your homeowners and car insurance with one company, for example. You can often get discounts of at least 10 percent when you start bundling, says David Spencer, a senior vice president at ACE Private Risk Services, which offers insurance for high-net-worth individuals and businesses.
You Might Get Some Discounts
Yes, your insurance agent may talk you into buying more insurance, but at the same time, you may learn that you're due for some discounts. "Homeowners can earn credits on premiums by installing safety devices like burglar alarms, water leak detection systems, battery backups for sump pumps and automatic standby generators. When combined, these credits can reduce homeowners' premiums by 30 percent or more," Spencer says.
Think about that. If you bought a security system months ago, or years ago, and you didn't tell your homeowners insurance agent, you have probably been overpaying on your homeowners insurance for some time.
Many Americans fear they'll never be able to retire, but there are those who are able to retire early, saying goodbye to the rat race before they hit 60 and pursuing their true passion. For many, that passion includes continuing to work, but at their own pace and doing something they truly enjoy.
In a March study of Americans with investible assets of $1 million or more, BMO Private Bank found that most planned to retire by 56 and that 20 percent planned to retire by age 40. But more than half those surveyed said that their retirement plans included work, with 21 percent planning to work part time, 21 percent planning to start a new career and 11 percent planning to start their own business.
Early retirement comes in many forms, with different aspirations and circumstances. Here are three stories of early retirement.
From Real Estate to Real Adventure
Richard Detrich started his career as a pastor, ran a cruise travel agency, worked in e-commerce and ended up selling real estate, a career he thought he could pursue indefinitely. Detrich and his wife, who worked for the county health department, owned a nice house overlooking the water in Ventura, California. But her stressful job was endangering her health, and they started thinking about a change.
"I had always thought I would work until I dropped," he says. But that was before Detrich "got tired of the traffic, the rat race, being a slave to my cellphone. ... There comes a time when you need to cash in your chips and leave the casino."
"Our only regret is that we did not do this sooner. Sometimes you have to dare to dream and start looking." - Richard Detrick
When he was 62 and she was 55, they sold their house, left their jobs and moved to Boquete, Panama. Ten years later, he has written several books, including "The New Escape to Paradise: Living and Retiring in Panama," and interrupts his retirement to lecture on cruise ships for several months each year. His wife, Nikki, runs a small coffee farm and does volunteer work.
Living in Ventura, he estimates that 39 percent of their income went toward their home and another 40 percent toward state and federal taxes. Living now in the mountains of Panama, they don't pay for heat or air conditioning at the dream home they built on their coffee farm. And their water bill is $60 a year. As U.S. citizens living abroad, they can exclude up to $100,800 in earned income from federal taxes.
For the Detrichs, the key to retiring early was cutting expenses as well as trading an expensive home for a cheaper one. When they moved to Panama, he estimated that they could live for 40 percent less than they did in California. Costs have risen, but he estimates they still spend 30 percent.
His Social Security income and his wife's pension are supplemented with income from their coffee farm, his cruise ship lectures and books and their investments. That's enough to live well in Panama.
They hadn't planned to enter the coffee business and, in fact, started their Panama lives in a gated community before they moved to the farm. "It's given us entrée into the local community that we wouldn't have had otherwise," he says, though he still struggles to communicate in Spanish. "Our only regret is that we did not do this sooner," he says. "Sometimes you have to dare to dream and start looking."
Navy Submarine to Military Financial Advice -- and Surfing
As Doug Nordman got ready to leave his military career with the U.S. Navy's submarine force after 20 years, he surveyed career options. But after years of 50- to 60-hour weeks or being on-call for weeks at a time, the last thing he wanted to do was essentially the same work in the civilian sector. "There was a certain amount of burnout," Nordman says. "I don't know what I want to do when I grow up, but it wasn't this." He remembers thinking, "I just really want to go surfing for a while."
"The best advantage we had was to save as much of our paychecks as possible. We weren't brilliant investors. We made all the usual mistakes. - Doug Nordman"
He and his wife, Marge, a Navy meteorologist/oceanographer, had a 9-year-old daughter, Carol, who they wanted to spend more time with. After doing some math, he realized they could afford to live on his military pension and Marge's earnings with the U.S. Navy Reserve, plus investment and rental property income.
What made early retirement possible for them was the frugal lifestyle they had embraced since they were married in 1986 and the savings habit he started from the time he stashed away $25 from his first paycheck after college. "The best advantage we had was to save as much of our paychecks as possible," Nordman says. "We weren't brilliant investors. We made all the usual mistakes."
Doug, 54, retired in 2002, and Marge, 53, retired in 2008. They've spent the last two months in Rota, Spain, where their daughter, now 22, is stationed with the U.S. Navy. The Nordmans live in Hawaii on his military pension of $42,792 a year, plus $5,000 to $10,000 a year in rental income and income from dividends and investments. When Marge turns 60, she'll get a pension from the Reserves.
In the 13 years since he left the Navy, Nordman has written a book, "The Military Guide to Financial Independence & Retirement," and is working on a second, "The Military Guide to Insurance Decisions." He started and a sold a blog called The Military Guide, though he still contributes one post a week. He donates all the profits from his book to military charities, as he did the income from the blog.
"It's not that I dislike working," Nordman says. "What I object to is all the things that go with being an employee." He hopes his work will help other military members achieve financial independence. "The advice doesn't change, no matter what your job is: Track your spending. Save as much as you can for as long as you can."
Keeping the Fun and Throwing Away the Obligations
Stan Kimer always hoped to retire early. To that end, he started saving early, maxing out his 401(k) from his corporate job at IBM, investing in company stock and living below his means so he could build up assets. As he approached his mid-50s, he began making extra mortgage payments, with the goal of paying off his home mortgage in Raleigh, North Carolina, before he retired. At 54, after 31 years at IBM, he negotiated a retirement package, with a plan to travel the world. That lasted about six months.
"The most important thing is being my own boss ... and being in control of my own destiny." - Stan Kimer
"When I first retired, I didn't retire with the intention of going back to work," says Kimer, who lives with his partner of 24 years (who is not retired). "I got tired of family and friends saying, 'You're too young to retire. You have too much to offer.'" So he took advantage of career coaching that was part of his severance package and became a consultant.
"I can do the things I most loved at IBM and skip the rest of it," he says. Now almost 60, he runs Total Engagement Consulting by Kimer, which provides diversity training with an emphasis on gay and lesbian issues and works with companies on their employees' long-term career planning. He did both these jobs at IBM.
He tracks his time and consciously works only 24 hours a week, focusing 60 percent of his time on his business, 20 percent on volunteer work and 20 percent on fun -- taking time out from all of that to travel three or four times a year. He just got back from a whale watching expedition in Baja, California, and is going to Iceland with the Sierra Club in July. He focuses his volunteer work on church and gay issues, as well as a vocational training center in Kenya. For fun, he took up figure skating, hiring a coach and attending the Dorothy Hamill Figure Skating Fantasy Camp last year. He skates three or four times a week.
Kimer attributes the freedom he enjoys now to his decision to be a saver. "I deliberately lived below my means and determined that I didn't need to keep up with the Joneses. If I underspent and saved a lot, I could end up enjoying my later life more." And a thought for today: "The most important thing is being my own boss ... and being in control of my own destiny."
The wear and tear that washing machines put on your clothes can put a dent in your budget. Luckily, there are a few simple laundry tricks that can help you make your clothes and linens last.
