I was chatting with a childless friend over dinner about how I'd been feeding our family of five on $80-$100 a week. The friend was flabbergasted. "My shampoo alone would take up most of that budget!" she said. (I hope she was exaggerating.)
The fact is, all of us are as frugal as we have to be to get by, except for those of us who fail to stay out of debt. But having kids actually makes us more frugal because we have to save more of our income to pay for their present and future needs. But there are other important ways that being a mother of three drives me to spend less on all aspects of life.
Remember the game "20 questions"? It's no game at all if you're hunting down the best financial adviser that your time, money and portfolio can buy. Yet the quest to find the right adviser is too often turned on its head, with potential clients considering themselves lucky to meet with an investment professional. Here, we list 20 questions the experts say you should ask before getting down to business with a new adviser.
1. What's Your Current Relationship With Your Coach or Mentor?
For Lisa Margulies, branch manager and financial adviser with Regatta Capital Group in Los Angeles, this is "the opening question." "I would listen carefully to the [answer] and gauge the financial adviser's openness, honesty and vulnerability," she says.
2. How Do You Invest in Yourself?
This isn't about the money, but rather the ongoing education. "Ask them how they stay current in their training," says Reno Frazzitta, president of Secure My Funds in Clinton, Michigan. "If they don't have an answer, it may be time to look elsewhere."
3. Whose Responsibility Is It to Keep Connected?
Avoid working with a financial adviser who sells you a product and then moves on. Ask about regular meetings, says Jeremy Shipp, president of Harbor Wealth Advisors in Richmond, Virginia. "Will they be quarterly or annually? And whose responsibility is it to schedule those meetings -- the adviser or the client?
4. How Are You Compensated?
It's not as clear-cut as you might think. "Many individuals are under the impression that financial advisers only make money if the investor makes money," says Gregory Sichenzia, founder of Sichenzia Ross Friedman Ference, a securities law firm in New York. "This is not true. Many investment sponsors pay advisers handsomely just for putting them into a specific fund or product."
5. For Referrals: What Do You Like About Your Adviser?
You may trust your buddy, but what if he's vague? "Referrals are great, but ask, ask, ask," says Pam Friedman, partner at Silicon Hills Wealth Management in Austin, Texas. "How often do they meet? What designation does the adviser have? Are they a certified financial planner?" If so, that requires passing a two-day exam and ongoing education.
6. What's Your Education?
This isn't polite party talk or an icebreaker. "Did the adviser obtain a college degree? Is the degree related to offering financial services?" says Keith Singer, owner and president of Singer Wealth Management in Boca Raton, Florida. "It's probably best to work with an adviser who is not only intelligent but educated as well."
7. Have There Been Complaints Against the Adviser?
This is one potentially confrontational question you may want to check out on your own by going to the Financial Industry Regulatory Authority website. "Before making a final decision, check with FINRA.org for any complaints filed or penalties levied against the adviser," says Greg McBride, senior vice president and chief financial analyst for Bankrate.com.
8. Do You Own the Same Products You'll Recommend to Me?
There's nothing like an adviser who puts her money where her mouth is. "If she doesn't buy what she's selling to you, are you sure you want to buy it?" says Ric Edelman, founder, chairman and CEO of Edelman Financial Services, a national firm.
9. What Happens to My Account If Something Happens to You?
This is a fear for many clients, especially those who rely on phone calls to stay in touch. "It would be important to understand who the next point of contact is and how liquid your assets are," Sichenzia says.
10. How Much Do You Cost?
Don't be shy about bringing up the money question early. "Compensation varies greatly," Friedman says. "If fees aren't clear or transparent to you, ask more questions. While no single model is right for everyone, it's important to understand how your adviser is compensated."
11. Are You a Fiduciary?
A fiduciary is legally appointed and authorized to hold assets in trust for another person. "A fiduciary planner is required to put client needs ahead of his or her own, regardless of the situation," says Bryan Hoover, vice president at Fragasso Financial Advisors in Pittsburgh. "Most importantly, this standard requires that all conflicts of interest be outlined in advance."
12. Why Did You Choose This Work?
Edelman says the answer usually falls into one of two categories. "They either talk about their fascination with investments, economics, financial planning and other numbers-oriented topics, or they talk about their fascination with people and how the dynamics of family relationships, emotions, attitudes and desires interact with effective financial decision-making." Ideally, you'll find someone who strikes a balance.
13. Can You Give Examples of Your Client Commitment?
The examples the adviser cites (or fails to cite) will provide valuable clues about motivation. "There are those advisers who work primarily to collect a paycheck, and there are those truly dedicated and passionate about what they do, committed long-term to their clients and careers," says Penny W. Gordon, senior vice president, private wealth adviser with Gibraltar Private Bank & Trust in Coral Gables, Florida.
14. How Did You Handle 2008?
Questions about investing during the Great Recession aren't common, but the answers could be very informative. "Were you in business then? Were you frightened? 'No' may be less than truthful," says Gregory DeJong, financial adviser and market manager with Savant Capital Management in Naperville, Illinois. Also try to get a lead on whether the adviser stood firm or yielded to pressure. You might also ask: "With your clients who insisted that you do something, did you change their investments?" DeJong says.
15. What's the Past Performance of Your Model Portfolio?
This ideally should be examined on a quarter-by-quarter basis, says Robert Franklin Muller, executive vice president and head of distribution for Behringer, based in Dallas. "The bottom line is that smart, complex strategies implemented by experienced financial advisers cannot be simply substituted with an algorithm."
16. What Are Your Professional Designations?
Having the right credentials ensures a high level of competence. "I recommend hiring an adviser with a known and regulated professional designation, such as a certified financial planner or CFP," Gordon says. "This is an excellent indication that the adviser has met specific standards in education, experience and ethics."
17. Are You Listening or Pitching?
You may want to be more diplomatic, but many financial advisers push the products of companies they represent, says Tom Halloran, president of Voya Financial Advisors. "Make sure the adviser listens to you and your needs and doesn't talk or product-pitch at you."
18. Are You Licensed to Offer Investment Advice?
Many consumers would assume a particular adviser is licensed to sell investments or give advice. "But that is not always the case," Singer says. "Many financial advisers are only licensed to sell insurance products. Because these advisers are limited in what they can offer or discuss with clients, their advice may be limited as well."
19. Can You Tell Me About the Last Client You Lost?
Don't you just love tough questions? "It can be a difficult thing to discuss, but it's crucial for you to understand why someone else decided to end a relationship with the interviewee," Hoover says. "Asking this question directly may give you a better sense of what the adviser values, and it should provide you with insight on the type of client he or she works with best."
20. Mind If I Bring a Friend?
This person does not need to have any connection to the adviser, only solid knowledge. "Ask if you may bring along your accountant, attorney or friend who's knowledgeable about the investment world," DeJong says. "Their impressions will be helpful, and merely their presence may cause a rogue adviser to conclude that you won't be worth the trouble."
Prices for eyeglasses are falling like meteors as online retailers push the cost of a pair of stylish frames and single-vision lenses to as low as $6. At the same time, the options available to shoppers are growing so quickly it can be hard to know which way to go. Here are some tips to guide you through vision-testing options, online and traditional sources, and style considerations, all at a reasonable price.
Only 38 percent of Americans buy eyeglasses from an eye doctor or optometrist these days, says Consumer Reports. "Instead, they are turning to inexpensive places such as Walmart Vision Center and Costco Optical."
Cheap eye exams
Below is a rundown of shoppers' choices, new and older, in the fast-expanding eyewear market. Before you get your glasses, however, you'll need a vision exam. Here are six sources for savings on vision exams:
Insurance. If you are lucky, your workplace insurance includes vision coverage. If you have it, use it. This may be your best option. Or you can buy your own insurance. One source for comparison shopping is eHealth. People enrolled in original Medicare can buy individual vision insurance policies at eHealth that cover routine eye care and eyeglasses for about $12 and $15 per month, according to the Savvy Senior at the Las Vegas Review-Journal. Be aware that changes to your Medicare plan must be made during Medicare open enrollment, Oct. 15 to Dec. 7. Seniors eligible for Medicare may find Medicare Advantage plans (instead of original Medicare) that include vision coverage.
Flexible spending accounts. You can pay for eye exams, glasses and contacts through a flexible spending account. Set it up at work to put aside before-tax money for eligible health care expenses. Healthcare.gov explains how FSAs work and which expenses are covered. The IRS says that eyeglasses and prescription sunglasses are eligible for coverage, as are contacts and even saline solution and enzyme cleaner, as long as you have a medical need for the contacts (thus, cosmetic lenses to change your eye color aren't eligible.)
Chain retailers. Target, Costco, Walmart and other national retail chains offer reasonably priced eye exams. At Costco, you don't have to be a member to get an exam from an independent optometrist at a Costco optical department. To buy glasses or contacts, you'll need to pay the $55 membership fee. Cheap is good, but free is even better. The America's Best optical chain throws in a free eye exam for glasses when you purchase two pairs of single-vision glasses (frames and lenses) for a total of $69.99. Here's the deal. An exam for contact lenses costs $79.
Discounts from clubs and organizations. Check with organizations you belong to, including clubs, unions, professional, religious and sports organizations, to find member discounts on eye exams. One example: AAA membership earns PearleVision customers 30 percent off eye exams at participating independent optimists and other discounts on contacts and glasses. Optometrists working with LensCrafters may have similar discounts for AAA members.
Comparison shopping. Shop around by phone to compare prices from local optometrists, eyewear specialty shops, chain stores and big box outlets.
Exams for low-income patients.All About Vision lists several sources for free or low-cost eye care for low-income adults and children, including Medicaid's eye exams for children, the state and federal Childrens Health Insurance Program and philanthropic programs for low-income patients through the American Optometric Association Foundation. A caveat: These exams may be intended to screen for medical issues and eye diseases and not to yield a prescription for lenses.
Using Your Prescription
Don't leave your eye exam without asking for a copy of your prescription. Federal rules allow you to use it anywhere you wish to purchase your eyewear. "Your eye care provider must give you a copy of your contact lens and eyeglass prescriptions -- whether or not you ask for them," according to the Federal Trade Commission. Ask the doctor to include these basics:
Glasses. Ask for your pupillary distance, the distance (in millimeters) between the centers of the pupils of each eye. Coastal Contacts, an eyewear seller, provides a video showing how to take your own pupillary distance measurement. Eyebuydirect also has a video showing the process and others explaining how to read a vision prescription and how to shop for glasses online.
Contacts. Ask the doctor to write down the type of lenses prescribed, their manufacturer, power, base curve and diameter.
Shopping Tips
If you use nonprescription reading glasses, don't pay top dollar for them at drugstores. Instead, buy them by the handful at less than $10 a pair at hardware stores and dollar stores. Stash them in your car, your purse, at work and around the house so you are never without glasses when you need them.
To save money, avoid high-fashion brands. Be your trendy self, but skip the big names. (Two ultra trendy sites are Warby Parker and Coastal.com.) Here's the thinking: Manufacturers of frames for big, high-end brands also manufacture high-quality frames for less-exotic labels, says Consumer Reports.
Luxottica -- a manufacturer of frames for Chanel, Prada and Versace -- also produces styles for LensCrafters, Pearle Vision, Sears Optical, and Target Optical, CR says.
In Consumer Reports' 2013 survey of 19,500 readers, Costco won top honors for overall satisfaction. Costco Optical has some drawbacks, however. You may not always find the high-fashion frames you are looking for, and it may take longer before you can pick up your finished glasses.
Browse choices at stores and websites to discover the styles you like before you get down to serious shopping.
Ready, Set, Hunt for Bargains
The shopping options are many:
Online eyewear sellers.
Local independent eyewear shops.
Optical departments at discount stores like Target Optical, Sears Optical and Walmart Vision Centers.
Optical chains, including LensCrafters, Pearle Vision and America's Best. Look for coupons for lower prices or half price on a second pair.
Warby Parker, which began online, now has stores or showrooms inside boutiques in 13 U.S. cities. Its frames are designed in-house.
This survey from Vision Monday, an ophthalmic industry magazine, lists the top American 50 eyewear retailers.
Low Prices Online
If you can wrap your head around buying eyeglasses online, you'll find astonishing prices. For example:
Coastal.com has $49 glasses, including prescription lenses and free shipping.
Most of Costco's frames are less than $100.
Warby Parker glasses start at $95, including single-vision prescription lenses and free shipping and returns. Progressive lenses are more. Warby Parker's "buy a pair, give a pair" program contributes to nonprofits that distribute eyeglasses to people in developing countries who need them.
Eyebuydirect.com has many frames for less than $20 and many more for less than $10, including the cost of single-vision lenses.
Zenni Optical, SimplyEyeglasses.com, LensesRx.com and Glasses.com are other online retailers with rock-bottom prices.
Is Buying Glasses Online Safe?
Are these low-cost glasses for real? And is buying glasses online a good idea? Dr. Glenda Secor, communications chair for the American Academy of Optometry, offers reassurance at Today Money: "With proper, unexpired prescriptions in hand, ordering online is a safe option."
Online eyewear is not for those with complex prescriptions, says Consumer Reports, adding: "Online retailers can't adjust frames or provide other in-person services. One option is to buy frames online and lenses locally. Walmart fills prescriptions for frames purchased elsewhere for $10 plus the cost of the lenses; Costco charges $18." Look for:
Vendors licensed in the United States, where safety standards and optical quality are high.
A return policy, warranty or guarantee.
Online reviews and articles discussing consumers' experiences with an online company you're considering.
Discounts: Search online for "promo code" and a store name.
Coupons, sales and weekly deals on eyewear websites.
Try On Eyeglasses Online
How can you know if you'll look good in glasses found online? Merchants now offer some intriguing solutions:
Do a photo "try-on." Sites may let you upload a photo of yourself so you can "try on" frames. You'll typically find shopping instructions and videos on eyewear sites and phone numbers for reaching salespeople.
Order sample glasses. Warby Parker will send five sample pair free to your home; Target will send four; and Coastal.com also sends you samples.
Shop for -- roughly -- your size. "If you already wear glasses, take a second to look at the arm, and you can see the size noted in small numbers," says Eyebuydirect.
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In its Money Mic series, LearnVest hands over the podium to people with controversial views about money. Today, one man shares how downsizing into a 200-square-foot home helped him achieve the life -- and career -- he longed for.
My quest to start living in a tiny house wasn't borne out of a need to downsize or drastically cut expenses, although both happened as a result. Rather, it fit into a larger game plan of mine to have a more flexible lifestyle that kept me from being chained to a desk all day.
It all started in the fall of 2011, when I took a month-long sabbatical from my job and life in Vermont to ride my bike from British Columbia into Washington State and along the Oregon coast.
At the time, I was working for a corporate tech-training company, creating online courses and aids that helped employees learn software. It was a good job and I worked with wonderful people. But I hated being stuck in a cubicle, and riding through such a scenic part of the country made me realize I needed more time to enjoy life.
On top of that, I'd always wanted to work for myself. I remember my manager once asked me where I saw myself in five years. She thought I was management material, but I honestly told her I wanted to start my own business. So when I got back from my sabbatical, I knew it was time to speed up that five-year plan -- but I needed to get my ducks in a row first.
Building Up My Tiny House Fund
Ethan WaldmanEthan Waldman
I went on the bike trip with my cousin, and all along our route, we camped and couch-surfed. Some of the people who took us in or let us pitch tents on their property lived in tiny houses. I thought they were cool, but it didn't occur to me to build one of my own until I decided to quit my job.
I knew my income would vary greatly as I launched my own business -- and rent and utilities were my biggest financial burden. If I could reduce the $750 I paid in rent (my portion of a two-bedroom house that I shared) and $250 in utilities (cable, Internet, and high heating and electric costs to run that big house), it would mean a lot more breathing room. If I built a tiny house, I could live rent-free and seriously reduce my utility bills. But I'd have to first save up to build my tiny house. I estimated it would cost me about $20,000 for the materials and design plans -- but I only had about $5,000 in savings.
I was making $60,000 a year, and while I never got into credit card debt, I pretty much spent what I earned. But now I had a goal to work toward. I called it my "tiny house fund," and I began funneling as much money into it as I could. The first big chunk that went into the fund was my $8,000 year-end bonus. I also generated a little side income by doing tech consulting work, which would eventually evolve into my business now. And I temporarily stopped contributing 5 precent of my pay toward retirement, with the intention of saving again once my goal was met.
'Hobo Mode'
I also moved in with my girlfriend, Ann, to save money on rent -- we joke that she was my "tiny house sugar momma" -- sold a couple of my old guitars, and limited my expenses to only what was absolutely necessary. Ann called this my "hobo mode." But cutting out even the small luxuries helped build up my fund little by little. For example, rather than eat out, I'd put that $60 into savings -- it was so satisfying transferring money from my checking account to my tiny house fund.
My strategy paid off: By March 2012 I gave several months' notice at work, knowing I'd reach my savings goal soon. And by June, I hit the $20,000 mark. Before I left, my boss asked if I'd be willing to take them on as my first consulting client. Not only was I ready to start my new life, I already had business lined up!
After my last day at work, I drove straight to an empty airplane hangar in my town of Morrisville, Vermont, to pick up a 22-foot-trailer loaded with about $1,000 of lumber. Next stop: A plot on my cousin's property, where I could start building my tiny home. In exchange for helping to maintain the grounds, he agreed to let me live there for free.
The Financial Nuts and Bolts of Construction
Although I had bought ready-made plans for my home, I never ended up using them because a family friend who owned a design firm thought he could do a better job -- and offered to do the work pro bono. He helped me to envision the tiny house I really wanted, while working within some pretty limiting parameters. For example, in order to keep the house on my cousin's land without paying property taxes, the tiny house had to be on wheels, and couldn't be taller than 12.6 feet in order to clear bridges, overpasses and electrical wires.
I had also underestimated the cost and difficulty of building the home: The materials exceeded my estimates, and I quickly realized I couldn't build it alone -- the way I originally planned. So I hired a carpenter to help. All told, these added another $22,000 to my bill. Luckily, I could afford it because I was already making money from my new business -- plus, I was still living with Ann rent-free, which freed up money to put toward the costs.
In November 2013 construction was finally finished, and I moved into my 200-square-foot house. With no mortgage and no debt from the cost of building the home, my only real expenses became my utility bills -- and those are a fraction of what they used to be.
I have no water bill because I'm connected to a spring. And even this past winter, when Vermont was covered in snow and experienced record low temperatures, my energy bill averaged just $30 a month when I used propane to heat the house, and between $100-$150 when I used electricity. My electric bill is just a few bucks during the warmer months.
My tiny home has benefited my girlfriend, too. She grew up in Vermont and has always romanticized about having a cabin in the woods. Because we split our time between her place and mine, she decided to rent out the extra bedroom in her condo -- which means extra income for her every month. To be sure, I've had to make some sacrifices, such a no washer and dryer and no room to be able to host a lot of guests. But I consider these small trade-offs for what I've gained in return.
Tiny Home, Big Financial Freedom
For a lot of people who build tiny houses, it's all about leaving a small carbon footprint. But, for me, it's much more than that. My tiny house enabled me to launch my own business, which gives me a newfound flexibility I never had working for a company. I'm doing work that I love -- and on my own terms.
Now I can take a day off whenever the snow is right for skiing -- something I did plenty of times last winter. And I recently took kite-surfing lessons, which inspired me to buy all the gear so I can surf on Lake Champlain this summer.
And guess what? Between my consulting work and sales of "Tiny House Decisions," a book I wrote to help other people understand what goes into building a tiny home, my income is the same as what I was making in my old day job.
Plus, since I don't have to pay rent or a mortgage, I have more wiggle room to spend and save on the things that make me happy. For instance, I've built up about $5,000 in emergency savings, am contributing 10 percent of my pre-tax salary to retirement and have other small savings goals I'm working toward, like a new car fund. I'm also able to travel more often and visit family and friends without worrying about what it will do to my budget.
The process to build my tiny home wasn't always smooth, and there were times when I felt overwhelmed by all of the decisions. But I can confidently say that downsizing my life in this way was worth it. Ultimately, what my tiny house gave me was financial freedom in work and in life -- a bigger payoff than I could have imagined.
Saving success is not a numbers game, though we're often told it is. Investing for retirement? Save 10 percent to 15 percent beginning in your 20s. College fund? Count on tuition rising by a factor of three over 17 years and open a 529 plan.
but most people aren't motivated by numbers, and yet we're still bombarded with pie charts and percentages when we're pitched a savings plan. What makes us really want to save? Self-actualization, says Jae Min Lee, a visiting scholar at the Ohio State University. Lee's research finds that saving is most motivated by our search for personal fulfillment.
Consider Your Values
It all can be traced back to Abraham Maslow's groundbreaking study of behavior as represented in a hierarchy of human needs. The most basic physical and emotional needs at the base of the human motivation pyramid, with aesthetic and spiritual goals at the top.
"The willingness to save for individual desire can be a more important motivation than from a sense of duty (such as future uncertainty) or supporting one's family," Lee's study says. "Our findings showing a positive relationship between more personalized saving goals and saving likelihood can be used to improve household saving behaviors."
Those personalized saving goals should include specifying how much to save for a certain goal, Lee says, such as "I need to save $1,000 for a Caribbean beach vacation," rather than an unspecified amount such as, "I need to save as much as I can."
"People need try to focus on something personal," Lee says. "What will you do? What kind of goal do you really have? What do you really want to achieve in your lifetime? I think that the psychological factors could be related to their real savings decisions. The choice of savings goals reflects our psychological needs and the different values of our own life."
Focus more on the purpose of your life and your values, Lee advises. "Self-actualization really matters," she adds. "Encouraging households to have more personalized saving goals is another way for financial planners and educators to implement our findings."
Mind Over Money
And how are financial advisers helping clients make their goals tangible, specific, realistic and obtainable? Observes Fredrick Petrie, a former Canadian Air Force airman and now financial navigator in Winnipeg, Manitoba: "Savings is 20 percent numbers and 80 percent psychology."
Petrie believes most people start by budgeting everything else and seeing what they have left over for saving and investing. "My twist is that I suggest 'taxing yourself.' Make yourself your own mini-IRS. You are more likely to put it aside if you are forced to as a tax. Put 10 cents of every dollar that comes into your hands somewhere where you are less likely to spend it. Successful saving first requires 'psyching yourself out.'"
Realistic and Accountable
Sometimes it's not a matter of simply having a goal -- it's more about having a realistic goal. "I had clients once who wanted to purchase a $750,000 house," says Margie Shard, a certified financial planner in Fenton, Michigan. "To do that, they would have to eliminate all their luxury expenses -- vacations, gifts, spa expenses such as hair, nails, facials and massages, entertainment costs like eating out and going to the movies. After reviewing this, they decided that a $300,000 house was a much better option because they could still have those luxuries in their life. While we still had to make some adjustments for them to buy the $300,000 house, the changes were minimal."
Conquering savings inertia can also mean enlisting the help of a friend, someone who will hold you accountable.
"I am not saying you have to hire a financial professional, but simply that you need to have someone that can help you stay on track with your goals," says Steve Repak, a financial advisor in Charlotte, North Carolina. Tapping into his military training, he says it takes more than a "one man army." "Pick a friend or a family member with a positive attitude who will provide you with encouragement and, when needed, some tough love if you get off track."
Repak also suggests keeping a written journal of your progress and sharing it with your partner. "Knowing that you have to show someone where you are wasting your money might make the difference in having more money instead of no money," he says.
It's All in the Cards
One way Jeffrey Bogart helps his clients prioritize savings goals is to play cards with them. The Mayfield Heights, Ohio investment advisor uses a special deck. Each card face has a goal on it: Buy a car, save for college, buy a home, save for retirement and so on.
"I have the clients put the cards in three piles. The first is 'can live without'; the second is 'would like to have'; and the third is 'can't live without.' It's fun to watch couples decide which card/goals are the most important to them. If there is a conflict, the woman usually wins!"
Laziness Works
But 25-year-old Rachel Blank of Washington, D.C., works to "save money in her sleep" by transferring $100 from her checking account to an emergency savings account automatically every month. To spend less, she skips Starbucks most mornings, opting for a home brew instead - and packs her lunch. She's not a frugal fanatic, though. She chooses her money battles carefully.
"I love drinking my coffee at home early in the morning, and I normally work through lunch, so packing my lunch works for me," Blank says. "But I love to work out, so I do belong to a nice gym and happily pay the higher-than-average monthly membership cost. Giving up the lunch and coffee that I don't care as much about allows me to spend more on the things I actually enjoy."
Having just passed her Series 65 securities exam, the aspiring investment advisor and blogger at TheDayTradette.com believes "out of sight, out of mind" can be a very powerful savings tool. "I personally only keep enough money in my checking account to safely cover all of my bills. Everything else goes into a high-yield savings account at a different bank, an investment account or a retirement account."
Blank says spending the money in these other accounts would require a "headache of transfers," selling stocks and, in the case of her retirement account, paying taxes and a 10 percent early withdrawal penalty. "Believe it or not, laziness can be your friend when it comes to saving money."
Hal M. Bundrick is a certified financial planner and former financial advisor and senior investment specialist for Wall Street firms.
It takes a long time to build a trusted brand, and that trust can be lost in one fell swoop of a hack attack.
Just ask Target, which suffered a massive data breach last year affecting millions of customers. Yet Target has picked itself up again and won back trust, an amazing feat born out in a new EquiTrend report from Harris Poll.
EquiTrend examined three factors in asking 38,000 consumers about 1,400 brands: familiarity, quality and consideration. Here are the top five brands of the year, which have been tops in their categories for at least five straight years, according to the EquiTrend report.
Visa. The credit card giant beat out rivals, and that is good news for Costco customers, as the retailer is dumping American Express and has started accepting Visa in stores.
Hallmark Greeting Cards. Looking for the right card for the right occasion racked up $3.8 billion in sales for Hallmark in 2014. The company says it holds licensing agreements for seven of the top 10 most-popular licensed lines, and cards include those branded by Sarah Jessica Parker and Life is Good. Given the brand trust Hallmark has earned, life is good, indeed.
Craftsman Tools. Parent company Sears Holding may be struggling, but Americans love their Craftsman tools. In the past the company has been named a Reader's Choice winner by Popular Mechanics, and it has one of the oldest customer loyalty programs, going back to 1991.
Subway. Subway beat out Arby's, Blimpie, Jimmy John's and Quiznos in the race for the top quick-service sandwich shop, according to Harris Poll's rankings.
Target Stores. EquiTrend says Target is still on target brandwise despite a massive data breach last year. "Consumers are willing to give it a chance to rebound," according to the Harris Poll report.
Honorable Mentions
Online. EquiTrend looked at emerging trends, including how quickly online brands have built up the sort of trust it took traditional businesses years to achieve, illustrating "the importance of technology and connectivity in simplifying and enhancing American lives." Amazon, Netflix, Paypal and YouTube score big with consumers. The best brand in news service is Google News.
On the news. In media, The Weather Channel is the most trusted brand in TV news. (Perhaps Jim Cantore's muscles are matched by his forecasting skills!)
On the road. Toyota is the most trusted auto brand, recovering from a billion-dollar-plus settlement in problems with unintended accelerations.
In your wallet. EquiTrend also looked at the emerging players in mobile wallets, and found that this soon in, people trust what they know -- PayPal -- which pollsters say is way out in front of Visa, MasterCard and Apple. That could change. "When one of these brands gets the execution right and merchant acceptance hits critical mass, consumers appear ready to jump on board," noted Joan Sinopoli, vice president of brand solutions at Harris Poll, in the firm's report.
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Plenty of stocks go up and down in any given week. The gainers inspire us to keep investing. The decliners keep greed in check while reminding us about the risks of the equity markets. Let's go over some of last week's best and worst performers.
The biggest gainer on the New York Stock Exchange last week was Vale. The Brazilian commodity titan soared after announcing record iron ore production through the first three months of the year.
This doesn't mean that Vale is a rock star again. Like many commodity companies, Vale investors have been pummeled. The stock continues to trade at a little more than half of where it was a year ago. Strong production is great, but the real question the market will ultimately ask is how much it can sell it for in the future.
The athletic footwear maker laced up and started running after a strong quarter in which it exceeded Wall Street's sales and profit targets. It also only helped that its chief operating officer appeared on Jim Cramer's "Mad Money" to discuss his company's prospects. Shares of Skechers went on to hit a new 52-week high.
Shares of the leading online shopping site soared after it posted blowout quarterly results. Net sales climbed 15 percent since the prior year's first quarter -- but it would have been a 22 percent pop if it weren't for foreign currency fluctuations.
Amazon did post a quarterly deficit, making this the third time in the past four quarters that the e-tail behemoth has delivered red ink on the bottom line. However, the market dismissed the loss after hearing that its Amazon Web Services arm turned a fat profit.
Amazon helps companies deliver cloud-hosted applications through its growing fleet of servers, and it was believed by many that the dot-com darling was doing this at a loss. It isn't. Amazon chose to break out the performance of Amazon Web Services for the first time, announcing that it registered net income of $265 million on $1.57 billion in revenue in that subsidiary.
It could be a staycation for HomeAway investors after the vacation property booking specialist posted slowing sales growth and a smaller than expected adjusted profit. Weakness in its European subscription business as it transitions to a price-per-booking model weighed on results. HomeAway is also shaking up its leadership, with a couple of executives leaving the company.
It's been a school of hard knocks for the for-profit post-secondary educators lately (Corinthian College announced Sunday that it's closing its last 28 campuses), and this time it was DeVry's turn to flunk out. The career molder posted disappointing quarterly results with a small dip in revenue and a much larger decline in profitability.
There's been growth in DeVry's medical schools, and its overseas expansion has proven incremental. However, there were just 36,188 total undergraduate students at DeVry's namesake campuses, 15 percent fewer than there were a year earlier.
The market's no longer impressed with 3-D printing, and fallen darling 3D Systems continues to move lower. It sealed its fate last week by warning that it will fall short of its initial projections for the recently concluded quarter. An uptick in consumer and metal products hasn't been enough to offset a slowdown in orders from industrial companies in the aerospace and automotive markets.
3D Systems was on fire a couple of years ago. The stock more than tripled in 2012, only to go on to more than double a year later. Then the helium was let out of the hype balloon, leading to 3D Systems sinking through 2014 as growth decelerated. Things aren't getting any better for 3D Systems shareholders in 2015.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends 3D Systems, Amazon.com, and HomeAway. The Motley Fool owns shares of 3D Systems, Amazon.com, and Vale. 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.
NEW YORK -- The average price of regular-grade gasoline in the United States rose about 5 percent in the past two weeks to $2.58 a gallon, according to the Lundberg survey released Sunday.
The 13-cent-a-gallon increase brought U.S. gasoline prices to their highest point so far in 2015, according to Trilby Lundberg, publisher of the survey. Still, prices are substantially lower than one year ago, when gasoline cost around $3.69 a gallon.
Lundberg said the increase was mostly due to higher crude oil prices, although the phasing in of higher cost spring and summer gasoline blends also contributed.
The lowest-price gasoline in the survey area of the 48 contiguous U.S. states was in Tucson, Arizona, at $2.20 a gallon. The highest price was in Los Angeles, at $3.30 a gallon.
David Paul Morris/Bloomberg via Getty ImagesBy CANDICE CHOI
NEW YORK -- Chipotle says it has completed phasing out genetically modified ingredients from its food, making it the first national fast-food chain to do so.
The Denver-based chain had already been using mostly non-GMO ingredients, but was working on making final changes to its tortillas.
The Food and Drug Administration maintains that GMOs are safe, and most of the country's corn and soybean crops are genetically modified to have certain traits like resistance to herbicides and plant diseases.
In recent years, however, activists have been calling for regulations that require labeling for foods that contain genetically modified ingredients. Many companies have responded to such concerns; Whole Foods Market (WFM) has said all products in its stores that contain genetically modified ingredients will be labeled as such by 2018.
Chipotle co-CEO Steve Ells has said in the past that the company felt it was best not to use GMOs given the "lack of consensus" about their effects.
On its website Monday, Chipotle said it was "G-M-Over It."
Chipotle Mexican Grill (CMG), which has around 1,800 locations, has enjoyed strong sales growth in part by playing up the quality of its ingredients and defining itself as a more wholesome alternative to traditional fast-food chains. On a page explaining its transition away from genetically modified ingredients, for instance, it cited "fast food" under an image of a burger as an example of where people might encounter GMOs.
To rid its menu of GMO ingredients, Chipotle said its suppliers planted non-GMO corn varieties for its tortillas. It also replaced soybean oil with sunflower oil to cook its chips and taco shells, and with rice bran oil in other recipes. The new oils are made from crops for which there are no genetically modified varieties available for commercial use, the company noted.
It said the changes didn't result in significantly higher costs and that it wasn't raising prices.
Going forward, the company said it was working on removing additives from its tortillas as well.
The announcement comes after Chipotle said in January it would stop serving pork in about a third of its restaurants after finding one of its suppliers violated its animal welfare standards. The company said it doesn't expect the pork shortage to be fully resolved until late this year.
Chipotle still serves Coca-Cola (KO) fountain drinks, which are made with high-fructose corn syrup. But this past summer, it started testing a root beer that is organically sweetened in Denver. That test is ongoing, said Chris Arnold, a company spokesman.
The completion of the phase-out was first reported by The New York Times and CNN.
-AP Writer Mary Clare Jalonick contributed from Washington, D.C.
When you were young, and if you got an allowance, your parents probably told you not to waste your money on candy, comic books, video games or some other equivalent whenever you tended to go overboard on purchases.
But as you quickly figured out, what is a complete waste to some people is a perfectly reasonable purchase for others. Still, it's hard to argue with Joan Fradella, a West Palm Beach, Florida, resident when she says, "Our garbage dumps are filled with purchasing mistakes."
There are reasons we don't give credit cards to toddlers. We shouldn't treat our hard-earned money as if it is Monopoly money.
Fradella, who used to be a purchasing agent for a consumer electronics company before co-founding a divorce mediation company, says everyone should think long and hard before whipping out their wallets.
"There are reasons we don't give credit cards to toddlers. We shouldn't treat our hard-earned money as if it is Monopoly money," she says.
Still, since there is no rule book for what constitutes a waste of money, everyone has to go with their gut.
And, of course, there must be a million ways consumers can waste their money. So this isn't a comprehensive list of possibilities for throwing away your income.
Credit cards. While many consumers use credit cards wisely, lots don't -- and there are certain cards you shouldn't bother with, according to Dak Hartsock, a resident of Naples, Florida, and chief investment officer at ACI Wealth Advisors, an investment advisory firm.
"If you have a credit card with an interest rate over 11 percent, you should get rid of it," he says. "Once you get north of 11 percent or so, the interest expense piles up so fast that many regular Americans can't ever catch up. Credit cards are loaded guns for many Americans. If you don't pay attention, you are going to get hurt."
If it helps, Hartsock says that when it comes to borrowing money, try to think like the CEO of your own company. His rationale? If you were running a public corporation, and the interest rate on the company's debt jumped from 7 percent to 27.99 percent, "the company would be in deep trouble," Hartsock says.
Weddings. Again, like credit cards, you can pay for a wedding responsibly or you can go off the deep end. "The final price of a wedding usually ends up being about the price of the down payment on a new couple's house," says Rick Salmeron, a certified financial planner with his own firm, Salmeron Financial, in Dallas.
The problem, as he sees it: "The majority of couples end up super-sizing their wedding, blowing dollars on stuff they had never originally budgeted for. So many variables are ripe [for] emotional impulse purchases -- the wedding dress, makeup and hair, DJ, decorations, food, wedding favors, invitations, photography ... the list is seemingly endless."
If you're still not convinced, Salmeron puts his distaste for extravagant weddings this way: "So many marriages fail due to financial problems. Why create a financial hardship on your savings account on day one? What's so romantic about that?"
Cable TV. "People spend well over $1,000 a year just so they can watch five to 10 of the 200-plus channels they're paying for, and the cable companies keep luring them back into long-term contracts with promo deals that expire after a few months, then the rates go through the roof again," says Steve Belk, a Houston-based entrepreneur who created CutCableToday.com, an online guide for doing just that.
But Belk is hardly alone in his stance. In 2013, CouponCabin.com surveyed 2,046 adults; forty-five percent of respondents said cable TV is a waste of money, but 81 percent of them admitted to being paying customers.
Hartsock agrees it's a wallet wrecker. "I've never met anyone that wasn't paying at least $80 a month or $960 a year," he says. "You can basically duplicate cable with a combination of Apple TV ($69 a year), Netflix ($7.99 a month), and Amazon Prime ($99 a year). Total annual bill, $263.88 before tax."
Cars. If you really want to shred money, buy a car incorrectly or one you can't afford. "Buying a new car just generally doesn't make a lot of sense for most people in the lower- to middle-income ranges because the depreciation credit is likely to be more than they can use on their taxes," Hartsock says. "If you have to get a car, it's a better use of money to get a certified used."
He offers the suggestion that if, for instance, you bought a certified used Audi or Lexus -- not exactly shabby cars -- with fewer than 100,000 miles on them, "not only are you avoiding the huge depreciation that occurs as soon as you buy it off the lot, you still get the warranty coverage."
And be sure to get your financing straightened out before you go to a dealership. "Once you know what car you want, it's only a matter of shopping around for the best price out the door and not [having] to worry about financing and APR with a car dealership," says Edgar Cerecerez, a marketing specialist for a software company in Lake Forest, California, who bought a Honda Fit earlier this year.
He had planned to get a used Honda but actually found financing that was less for a newer car. In any case, by comparison shopping first and using an online automobile calculator, he knew exactly what he was getting into before buying his car. He estimates he saved at least $720 from financing alone, and of course, some consumers might save potentially thousands by nailing down the loan before going into a dealership.
Splurging. It isn't that you shouldn't splurge. But you may be doing it too much, particularly at restaurants, according to Danny Kofke, a retirement consultant in Atlanta.
"If you are like me, you usually need a doggie bag to go because you cannot eat your entire meal. Why pay more money for an appetizer when all it does is take up space in your belly before your meal is even brought out? In addition, soft drinks and even tea can now cost over $2. If you have a family of four, that is over $8 in just drinks."
Kofke says he can easily spend more than $12 on drinks -- he and his wife have four kids. "Order water instead, and you can save a huge chunk of change," he says.
And, sure, splurging a little may not be like buying an overpriced car, but if you're splurging every day, it's easy to see how you could really mess up your finances.
Robert Godlewski, an Atlanta resident, has a similar mindset. He is a public relations guy for a university and is just, as he puts it, "a regular guy" who is admittedly in an "ornery mood," due to some lousy weather in the area lately, but he feels like a lot of people mindlessly splurge on dumb things.
"Why do people feel they have to buy an expensive cup of coffee on their way to work?" he grouses. "Can't they get up five minutes earlier and make it themselves? I thought that was why instant coffee was invented."
He also thinks some people waste their money on overpriced premium cable subscription channels.
But while some consumers love their coffee and premium cable channels, nobody can fault him on where he thinks everyone's wasted money should go instead: "People should spend money, if you will, on their damn retirement accounts."
NEW YORK -- The home of the Whopper enjoyed its biggest sales jump in nearly a decade in the U.S. and Canada during the first quarter, boosted by a pricier new flavor of its signature burger and an ongoing 2 for $5 promotion.
Burger King's sales rose 6.9 percent at established locations in the U.S. and Canada, parent company Restaurant Brands International said Monday. The company, which also owns Tim Hortons doughnut chain, declined to say whether the increase at Burger King was driven by higher average spending or an uptick in customer traffic, which is a key indicator of health.
In a phone interview, Restaurant Brands CEO Daniel Schwartz cited a variety of factors for the sales increase at Burger King, including a spicy BLT Whopper that has a suggested retail price of $4.99 -- which is a dollar more than a regular Whopper. Schwartz said the offering also illustrated how the chain is giving customers something new without really complicating kitchen operations with too many additional ingredients.
We said it in the past -- there's no silver bullet.
Sales were also helped by a premium A1 Ultimate Bacon Cheeseburger, marketing during the NCAA championships and healthy sales at breakfast, which Schwartz said accounts for about 13 to 14 percent of sales.
"We said it in the past -- there's no silver bullet," Schwartz said in a phone interview.
The company has also been pushing for franchisees to remodel restaurants, with 40 percent of locations now remodeled, he said.
The showing comes as rival McDonald's (MCD) has been fighting to hold onto customers, with sales at established U.S. locations falling 2.6 percent during the first three months of the year. Taco Bell, which is benefiting from the launch of a national breakfast menu, saw sales rise 6 percent during the period, according to parent company Yum Brands (YUM).
Little Domestic Expansion
While Burger King has been striking franchising deals to expand internationally, the company said the number of locations in the U.S. has been flat to slightly down at around 7,000 stores.
McDonald's, which has more than 14,300 in the U.S. and more than 36,200 around the world, has said it would slow it global expansion as it works on fixing its business.
On a global basis, Burger King's same-store sales rose 4.6 percent at Tim Hortons' rose 5.3 percent.
For the quarter, Restaurant Brands International reported adjusted earnings that beat analyst expectations.
The Canadian company, which was formed in December through a combination of Tim Hortons Inc. and Burger King, reported a loss of $8.1 million, or 4 cents a share. But it had earnings of 18 cents a share after adjusting for certain costs.
Analysts polled by FactSet expected profit of 15 cents a share.
Revenue rose slightly to $932 million. Analysts polled by FactSet expected $944.7 million.
The results were subdued by a strong U.S. dollar and the company said it would have seen 9.6 percent growth without currency swings.
Shares of Restaurant Brands (QSR) were up 3.6 percent at $43.07.
Quarterflash/Vantagenews.co.uk/IPxBruce JennerBy Trey Ditto, CEO of Ditto Public Affairs
From tech start-ups to Fortune 500 companies to even presidential candidates, anyone in a position that involves talking to the media could learn some valuable lessons from Bruce Jenner's interview with Dianne Sawyer.
While Jenner's confession that he is transitioning to become a woman wasn't surprising to those who follow the Kardashians and keep tabs on entertainment news, what was amazing was how moving, touching and affirming the interview was. This was no accident though, as Jenner had a message and knew exactly how to deliver it -- no doubt through media training, mock interviews and careful management of the parameters of the interview by his PR people.
The first thing you notice in the interview is how he is dressed and his demeanor. Casually but appropriately dressed, the untucked button down shirt set a relaxing, conversational tone. At times, Jenner calmly sat back, not slouchy or because he was tired, but to show he was very comfortable talking about what could be an uncomfortable topic. Even the interview setting -- a large white leather couch -- set a tone for a conversation not an "interview."
Appearance may have first set the tone, but what Jenner said also relaxed and won over the 17 million viewers who -- based on my Facebook feed, at least -- felt an intense and emotional connection with his struggle.
Jenner was very well-scripted, saying multiple times that his hope for this interview was to change other people's lives. He came across as humble, making viewers sympathize with his lifetime of struggle and confusion. He was personable -- at times making off-the-cuff jokes and comments that gave us a glimpse into the actual Bruce Jenner. Remember, until now, he was basically Mr. Kris Kardashian. He allowed himself to be vulnerable, shedding a few tears throughout the interview. There was a humanizing moment when he and Ms. Sawyer visited the house he grew-up in where he first began trying on women's clothing. And finally, he admitted to being a flawed human-being, revealing that he had apologized to the women in his life, for what he believes was being unfair to them.
Humble, personable, flawed. Serious, laughing, crying. He let the audience in and took us on an emotional ride, and he won our hearts. But this didn't happen by accident, and CEOs should watch this interview not necessarily because they are interested in the topic but because they could learn how to truly conduct a major interview and push the story they want covered.
For many executives, they believe they are too smart to have to prepare for interviews. But success in the boardroom doesn't translate to success with a reporter. And while some may be very good at delivering the message, they may lack humility or a personal touch which can impact how they are portrayed in a story. For other executives, they are put into a position to relay a message they don't honestly believe. How many times have we seen Hillary Clinton try to be personable and relatable and it comes across as stiff and unbelievable? Her most "real moment" was when the weight of the 2008 presidential campaign was so much it drove her to tears when asked a question by a voter. And when John Boehner cried on "60 Minutes," it was considered too much emotion, leaving viewers chuckling that one of the most powerful men in Washington D.C. had reduced himself to a crying baby.
But to help an executive relay a singular message and conduct a successful interview, communications people have to know how to set the stage, which Jenner's people did masterfully.
First, topics and parameters were set. Viewers felt like they were organically taken on a journey through Jenner's life and struggles, but this was meticulously architected. We were given a glimpse into his childhood, with Jenner and Sawyer going to his hometown where the confusion first began. Pictures of Bruce as a child were gently displayed on our TVs, as we saw in our heads a boy who was smiling on the outside but feeling confusion on the inside. We were taken through Jenner's Olympic years, where he became the most famous male athlete in the world. At every point in his life, Jenner was prepared and very well-scripted to talk about what he was feeling and going through, and it drew the viewer in even more.
Second, Jenner's public-relations team was willing to talk about the tougher issues as well -- to include three marriages and a handful of kids. If you are in communications and are trying to manage a high-profile interview for an executive, you can't avoid the bad stuff but you can face it and manage it. As a result, Jenner was very careful to be truthful about his marriage with Kris Jenner to an extent -- even blaming himself. And it was no accident that none of his wives gave a comment to ABC. Instead, ABC was provided on-the-record interviews with his media trained sons, to include Brandon Jenner, who Sawyer even called out for being too positive. And if you were really paying attention, you'll notice that his mom, Esther Jenner, gave a prepared video statement -- looking directly at the camera with lighting that was in stark contrast to the famous ABC rose-colored lens. ABC was allowed to get close to the Jenner/Kardashian clan -- but not too close.
Finally, Jenner revealed some rather shocking information. He talked briefly of wanting to commit suicide and that he was a Republican and a Christian. It wasn't enough to derail the tight message and story that had been concocted by his public-relations team prior to the interview, but it was just enough to raise eyebrows -- and interest -- of viewers. And as an executive, you have to be willing to sprinkle revealing information into an interview but then have the ability to bring the story back to your message.
CEOs don't have to be interested in the Kardashians and transgender issues to watch Bruce Jenner's feature on ABC. What they can do is take the two hour, tell-all and use it as a guide on how to truly conduct a successful interview to the press, because being well-prepared and working with a communications team that is tightly controlling the process can -- like Jenner -- win over the hearts of your audience. Anything less than this type of preparation, can result in stories that could do indelible harm to a company and the executive.
Commentary by Trey Ditto, the CEO of Ditto Public Affairs, a full-service communications firm in New York. Previously he worked in political communications, including a stint in the Bush administration. Follow him on Twitter @treyditto.
ESPN is suing Verizon (VZ) in an escalating clash over how the popular sports channel is being sold in a discounted pay-TV package.
The complaint filed Monday in New York's state Supreme Court alleges Verizon is breaking its contract with ESPN, owned by Walt Disney Co. (DIS), by unbundling the sports channel from the main programming line-up of Verizon's FiOS TV.
The legal showdown could have ripple effects on how other pay-TV programming is packaged. Cable and satellite services are scrambling to retain subscribers as the advent of Internet video spawns new and less expensive ways to stay entertained and informed.
Verizon is allowing customers to subscribe to a bare-bones package of 35 channels for $55 a month, with the option of adding other two other tiers of programming such as a sports package that includes ESPN. The streamlined packages are meant to appeal to budget-minded consumers weary of paying for dozens of TV channels that they rarely watch.
Pay-TV providers such as Verizon are under pressure to give subscribers cheaper and more flexible choices as they face intensifying competition from Netflix (NFLX), Hulu and Amazon.com (AMZN) and other online services that stream TV series and movies over high-speed Internet connections.
Those market forces contributed to Time Warner's (TWX) HBO, a long-time staple in pay-TV lineups, to recently begin selling an Internet-only service for $15 a month.
Consumers have spoken loud and clear that they want choice, and the industry should be focused on giving consumers what they want.
ESPN is fighting Verizon's discounted "custom TV" package because it gives subscribers the option of bypassing the sports channel in their programming selections. That violates pay-TV requirements stipulating that ESPN be included in the main bundle of programming, according to ESPN. Despite the alleged breach of contract, ESPN hasn't yet pulled its channel from the sports pack that Verizon is selling as part of its discounted service.
Verizon denies its new options break its ESPN contract. "Consumers have spoken loud and clear that they want choice, and the industry should be focused on giving consumers what they want," the company said in response to ESPN's lawsuit.
In its statement, ESPN said it favors innovation as long as it doesn't violate existing agreements. The sports channel recently worked out a deal that enabled Dish TV's Sling service to include ESPN and ESPN2 in an Internet video service that costs about $20 a month. ESPN is included in the main programming line-up of Sling, though
Few details of ESPN's claims against Verizon were available Monday because the material in the lawsuit is currently considered confidential.
ESPN is highly prized by pay-TV providers and advertisers because the channel has the rights to a variety of major professional and college sports that still command large audience who watch the programming live instead of on DVR recordings that let viewers skip the commercials.
The sports channel's allure has established ESPN as the most expensive channel in basic pay-TV channels, based on estimates from data provider SNL Kagan. ESPN charges pay-TV distributors $6.61 a monthly subscriber compared to just $1.65 a subscriber for the second most expensive basic channel, TNT.
-AP Business Writer Tali Arbel in Washington contributed to this story.
APActors Robert Downey Jr. and Jeremy Renner ring the opening bell Monday at the New York Stock Exchange.By Caroline Valetkevitch
NEW YORK - U.S. stocks ended down Monday, led by losses in biotech shares after disappointing news from several companies including Amgen.
The Nasdaq Biotech Index sank 4.1 percent, its biggest daily percentage loss since March 25, while the S&P Healthcare index, down 1.8 percent, was the biggest drag on the benchmark S&P 500 index.
Amgen (AMGN) shares led the S&P 500's decline, dropping 3.3 percent to $162.38 after U.S. regulators said Amgen's skin cancer immunotherapy cannot be considered for an accelerated review at this time.
Celladon (CLDN) shares fell 80.7 percent to $2.64 and hit a record low of $2.59. It said it expected layoffs and cost cuts after the company's lead experimental gene therapy to treat heart failure failed a key trial.
Health care companies have been the top performers so far in 2015, helping push major stock indexes to records. Biotechs in particular have driven up the Nasdaq, which last week reached its first all-time closing high in 15 years.
The sector is being dragged down by reports of high pricing by specialty pharmaceutical companies as well as the disappointing news from Celladon and Amgen, said Paul Yook portfolio manager of biotech exchange traded funds and at LifeSci Partners in New York.
"Drug pricing has been a real concern for investors," he said.
The Nasdaq biotech sector briefly fell into bear market territory a year ago following a sell-off in Gilead (GILD) shares and concerns about valuations. But analysts said for now they don't view Monday's selloff as the start of a bigger drop. The Nasdaq biotech index is up more than 50 percent since April 2014.
"This run in the biotechs is going to come to end at some point but I'm not panicking yet," said Bill Gunderson, president of Gunderson Capital in San Diego.
"I don't think you can look at what's happening today and say this is the end of the biotech sector. You might just have a big institution reallocating a little bit of money here."
Stocks Making Moves
The Dow Jones industrial average (^DJI) fell 42.17 points, or 0.2 percent, to 18,037.97, the Standard & Poor's 500 index (^GSPC) lost 8.77 points, or 0.4 percent, to 2,108.92 and the Nasdaq composite (^IXIC) dropped 31.84 points, or 0.6 percent, to 5,060.25.
Also in the health care sector, Mylan (MYL) fell 5.7 percent to $71.72 after it rejected Teva Pharmaceutical's unsolicited $40 billion takeover offer, saying it "grossly undervalues" the company. Teva (TEVA) lost 4.3 percent to $61.63.
The Health Care Select Sector SPDR exchange-traded fund (XLV) was down 1.8 percent.
After the bell, Apple (AAPL) shares gained 1.1 percent as the iPhone maker reported a 27 percent jump in quarterly revenue. Its shares ended the regular session up 1.8 percent at $132.65.
NYSE declining issues outnumbered advancers 1,923 to 1,130, while on the Nasdaq, 1,956 issues fell and 805 advanced. The S&P 500 posted 14 new 52-week highs and 1 new low; the Nasdaq composite recorded 101 new highs and 42 new lows.
About 6.8 billion shares changed hands on U.S. exchanges versus the 6.2 billion daily average for the month to date, according to data from BATS Global Markets.
-With additional reporting by Sinead Carew.
What to watch Tuesday:
Federal Reserve policymakers meet to set interest rates.
Standard & Poor's releases S&P/Case-Shiller index of home prices for February at 9 a.m. Eastern time.
The Conference Board releases the Consumer Confidence Index for April at 10 a.m..
Earnings Season
These selected companies are scheduled to report quarterly financial results:
Summer is right around the corner. Not only will we be able to say goodbye to the early morning whining and hello to warm, sunny days, but we also get to send our kids away to summer camp. Yay!
I love summer camp for so many reasons. I love it because I have awesome memories of going as a child, and I love it because I have awesome expectations of a semi-quiet house once my kids head out the door.
But let's be real here. There is one part of summer camp that's not so awesome, and that's the price. Fortunately, you can find a perfect camp at a perfectly good rate if you're willing to put in a little legwork. However, you need to start looking now, before spaces fill up and scholarship money disappears. Here are seven tips to help you out:
1. Pick the Right Camp for Your Kid
You may have fabulous memories of your camp, but that doesn't mean your kids will have the same experience. Rather than force them into what could be a terrifying week, take some time to discuss their expectations of camp. You have plenty of choices: science, sports, adventure, Bible, Scout, arts or a mix.
Your child may hate the idea of rock climbing or swimming, but could be geeked about the chance to study robotics on a local college campus. Figure out what makes your child tick, and look for the type of camp that fits their interests and personality.
2. Decide If It's a Daytime or Overnight Experience
Along those same lines, decide whether an overnight camp or a day camp will better fit your child and family.
Overnight camps are what typically come to mind when you think about summer camps, but a weeklong excursion with strangers may be too much for some kids. Day camps will require more driving and coordination on your part, but they might provide a more positive experience for those prone to homesickness.
Working parents might also find tax incentives tip the scales toward a day camp. Depending on the particulars of your situation, you may be able to use money from a flexible spending account to pay for day camp or claim a Child and Dependent Care Tax Credit based on the tuition. These options aren't available for overnight camps. Check with a tax professional for more details.
3. Check Out Community and Nonprofit Camps
According to the American Camp Association, resident camps can cost from $690 to more than $2,000 per week. Meanwhile, day camps may be anywhere from $304 to more than $500 a week. However, you can certainly find a quality camp for less money.
To locate the good, bargain camps, look to your community and non-profit organizations. The prices may be as low as free for a half-day Vacation Bible School through a church or as much as a couple hundred dollars for an overnight camp run by a YMCA or recreation department.
4. Search Online to Go Outside the Box
Or maybe the perfect camp is one you've never heard of before. To find it, you may have to do more than ask for recommendations from your Facebook friends. Instead, head to the Internet, where you may be able to search by price, location or camp features. Here are a couple of summer camp websites to try.
Also, check out the websites for your local YMCA, scouting organizations and area universities for other opportunities.
5. Make Sure the Camp Is Legitimately Awesome
Every summer camp website is bound to tell you they are the greatest thing since sliced bread. As a parent, it's your job to make sure that's true.
First, find out more about who oversees the camp. Is it run by a local or national organization? Does that group have a good track-record of quality? You can also look to see if the camp is accredited through the ACA or another organization.
Once you feel comfortable with the camp's parent organization, it's time to delve into how the specific location you plan to use is run. If you don't know anyone personally who's sent a child there, don't hesitate to ask for references.
Searches of the Web and Facebook can also be your friends when it comes to ferreting out the inside scoop on a camp. But keep in mind that people are more likely to complain than compliment, so online gripes may not give you the whole story. A better indicator of how the camp is run may be how it responds to those complaints.
Finally, if you have a child with special needs, pick up the phone and call the director or another camp representative. If they seem dismissive of your child's needs or unwilling to accommodate them, it may be in your best interests to move along.
6. Ask About Fees, Scholarships, Incidental Expenses
The weekly fee or tuition rate may be front and center in your mind, but it may not be the amount you end up paying.
On the one hand, many camps offer financial assistance to offset fees. The ACA reports 90 percent of camps offer some type of aid, from total to partial scholarships. Some offer this money on a first-come/first-serve basis so it's best to apply early. Even if you don't think you'll be eligible, it never hurts to ask.
On the flip side, you could end up paying more than the advertised price if the camp tacks on a lot of incidental expenses. Activities such as horseback riding and archery may cost extra, or there may be a camp store at which your child can rack up a healthy account balance.
7. See If You Can Get Your Money Back
Last, but not least, ask about the refund policy. If your child gets sick or a death occurs in the family, can you get your money back? What if Junior decides he hates camp on Day 2? Do you get a partial refund?
In my experience, it's rare for a camp to offer refunds for sickness or a change of heart. However, it's good to know upfront what the policy is. Then, if you find a summer camp that is generous with refunds, they may deserve a bump to your short list.
Will your kids be attending summer camp this year? Head to our Facebook page to tell us how much is too much when it comes to camp tuition and fees. Like this article? Sign up for our newsletter and we'll send you a regular digest of our newest stories, full of money saving tips and advice, free! We'll also email you a PDF of Stacy Johnson's "205 Ways to Save Money" as soon as you've subscribed. It's full of great tips that'll help you save a ton of extra cash.
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Be selfish. That's what financial advisers suggest when deciding how to prioritize your own retirement savings against putting away money to pay for the kids' college tuition.
"If you have to choose, retirement has to be your top priority. That goes against the grain as a parent to think of yourself first," said Carrie Schwab-Pomerantz, president of the Charles Schwab Foundation and author of "The Charles Schwab Guide to Finances after Fifty: Answers to Your Most Important Question."
Many parents are inclined to fund the college bucket first, but financial planners say that's a short-sighted decision. "You don't get a second chance to save for retirement," says Schwab-Pomerantz. "You can't get a scholarship or a loan to pay for retirement, while you can for college."
The Early Bird
The key is to start saving early -- with your first job. Set up a 401(k) or Individual Retirement Account, and if your employer contributes, save enough to at least take full advantage of that match. That is "free money" that you don't want to leave it on the table. These retirement plans also offer another advantage: they reduce your current tax bill and they can grow with taxes deferred until you start to withdraw the money when you do retire.
A middle-income worker or couple who saves 10 percent to 15 percent of their income in their 20s and continues to do so should be secure in guaranteeing a comfortable income in retirement. However, Schwab-Pomerantz says if you wait until age 30 to start saving for retirement, you'll need to put away 20 percent of you paycheck, and if you want until age 40, it's 30 percent.
Now many parents would argue that they do not want to saddle their kids with a mountain of debt from attending college, and we've heard plenty of horror stories about that. But parents need to think long-term. If they are destitute when it comes time to retire, that could be an even greater drag on the kids, if they have to support or subsidize you for the rest of your life.
Hopefully, you'll be in a position to help put money in the college savings bucket too, and of course, the sooner you can start, the better. A NerdWallet study found that if you want to pay the full cost at a public university, you'll need to save more than $3,900 a year, if you start when your child is a year old. If you wait until age 10, that goes up to $11,147 a year.
Paying for College
While college is a huge expense, middle-income parents can feel liberated with the knowledge that there are a number of ways to afford it. "You have some wiggle room as a contributor," according to NerdWallet personal finance correspondent Farnoosh Torabi. She says your goal can be more manageable by planning to contribute 50 percent of the cost. The other half can come from financial aid, loans and the student. She says many parents want their kids to have some skin in the game by working part-time jobs in high school and college "to establish a higher sense of value, to appreciate the dollar value behind it and to learn about the real world."
Experts also say it's important for parents to have frank conversations with their kids about what is realistic and what is affordable. "Money is a taboo topic in many households," said Torabi, "but you need to change the culture in your household. Kids want to be part of the process of planning, especially if it means being able to go to the school of the their dreams."
The best way to save for college is through a 529 College Savings Plan. Like a 401(k), you can have money taken directly out of your paycheck on a pre-tax basis. You can even set it up before the child is born and change the named beneficiary later on. And unlike a 401(k), you can get outside help to fund this account. Encourage grandparents and others to contribute to it when they give birthday and holiday gifts.
There is also an increasing amount of scholarship money available to help pay for college. Stanford announced earlier this month that accepted students of parents who make less than $125,000 a year and have assets of $300,000 or less won't have to pay any tuition. Several Ivy League schools and other elite colleges are also waving tuition for more students from middle- and low-income families.
The bottom line is that when choosing between your own retirement and your kids; college fund, you have to think long-term -- and that may mean going against your intuition by thinking of yourself first.
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There's no "perfect" way to manage your money. Stop looking for the silver bullet or the magic formula -- it doesn't exist.
In fact, money can be counterintuitive. The best budget might be not having one at all. Seriously. This is called the "anti-budget," and we explain it in detail below.
Let's chat about weird strategies for managing your money. You might discover an oddball tactic that works well for you.
The Anti-Budget
Budgeting can be cumbersome. Tracking, itemizing and classifying how you spend every last penny can feel tedious.
It's no surprise that budgeting -- like dieting -- has low long-term adherence. People get excited about it for a week or two, and then they become busy. They're distracted by something else. They forget.
Why not just cut the charade and embrace the budget that you'll stick to: the anti-budget? This tactic involves skimming your savings off the top first and going wild with the rest. Spend without regard to how much you've shelled out on concert tickets or restaurants. There are only three rules:
Your savings -- including debt payoff, retirement, investments and cash savings -- get pulled from the top first. No exceptions.
Your bills -- including your mortgage or rent, utilities, insurance premiums, and other fixed costs -- get paid second.
You never live beyond your means. If this requires you to use debit instead of credit, so be it.
That's it. No tracking. You don't need to worry that your clothing budget is $35 but this month you spent $43. You don't need to line-itemize every tube of toothpaste and can of dog food. Just pull your savings from the top, pay your bills and spend the rest guilt-free.
How much should you save? I recommend 20 percent as a bare minimum, which should include 12 percent to 15 percent into retirement accounts and the rest as cash savings for building an emergency fund, saving for your children's education, saving for big-ticket purchases and preparing for vacations and holidays.
If this seems like a lot, try boosting your savings rate 1 percent at a time. If you earn $4,000 per month, an extra 1 percent is $40. Trim this from your budget, adjust to the new lifestyle, and repeat.
If you're carrying debt, save more than 20 percent of your income and use this excess to accelerate your debt repayments. For the purposes of this budget, the minimum payments on your debt count as "bills," while payments in excess of the minimum count as "savings."
The Live-on-One-Income Budget
Here's another unusual strategy: If you're part of a dual-income couple, live on one income and save the other. I hear you protesting already: "That's impossible! We need both incomes!"
I'd invite you to challenge that assumption. You may need both incomes to maintain your current lifestyle, but what would happen if you downsized into a smaller home? Dined out less often? Stopped getting expensive haircuts? Traded your gas-guzzler for a more fuel-efficient vehicle? Rather than focusing on all the reasons that it can't work, ask yourself how you could make it work.
If you need to wade into this slowly, start by living on 1.5 incomes: save half of one partner's income. Once you adjust to that lifestyle, save 75 percent of that person's income. Then increase it to the entirety of that spouse or partner's income.
Remind yourself that the median U.S. household has 1.3 income earners for 2.5 people -- meaning that the median household has roughly one income per two people. If that many people are making it work, perhaps you can, too.
When you're starting this project, save the income of the lower-earning partner. After you achieve this, challenge yourself to flip the tables: live on the lower-earner's income and save 100 percent of the higher salary. By doing so, you'll save more than 50 percent of your combined income. I've done this for three years; here are the results.
As a bonus, if you ever decide to convert into a one-income household, you'll have a far easier time making the adjustment, because everything within your life -- from the mortgage or rent you've selected to the car payment you carry -- will be optimized around a single income.
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.
youtube.com"Descendants" follows the kids of villains Cruella De Vil, Maleficent, The Evil Queen and Jafar.
The Internet gasped in collective glee when the latest "Star Wars VII: The Force Awakens" trailer was released earlier this month. The preview has amassed more than 40 million views on YouTube, and it's a safe bet that a lot more people than that will ultimately see the sci-fi flick when it hits theaters in December.
It's going to be huge, but it's not the only movie that Disney (DIS) is hoping will light up the corner multiplex later this year. Let's take a look at some of the other promising releases that the family entertainment giant will be putting out through 2015.
1. "Avengers: Age of Ultron" -- May 1
One movie that could ultimately challenge "Star Wars VII" for the box office title in 2015 is the highly anticipated "Avengers" sequel that hits theaters in a few days. The original release that united many of Marvel's beloved characters was the highest-grossing movie of 2012, and three years later we have yet to see another film top the $623 million in domestic gross box office receipts collected by the first movie.
That's a lot of dough, and even if we adjust for inflation it's a better tally than the two most recent "Star Wars" releases rang up. Will "Avengers: Age of Ultron" sell more tickets than "Star Wars VII" will later this year? Probably not. However, this should be the movie industry's big early summer release.
2."Tomorrowland" -- May 22
Disney has themed attractions to iconic rides, but now we're seeing a movie named after one of the lands depicted at Disneyland and the Magic Kingdom. The live-action movie stars George Clooney as a scientist booted from the futuristic city of Tomorrowland, plotting a return with an inquisitive teen.
It's a zany premise on paper, but with Brad Bird at the helm as director -- the guy behind "Iron Giant" and "The Incredibles" -- it's likely to be an action-packed romp packing heart.
Disney is already actively promoting the movie at its theme parks. It booted Captain EO from its theater in Florida's Epcot to screen extended previews of the movie.
3. "Inside Out" -- June 19
The latest computer-animated Pixar release will dive into the mind of a young girl who moves to San Francisco when her father gets relocated for a new job. The real stars in this family-friendly piece seem to be the emotions.
Joy, Fear, Anger, Disgust and Sadness are the five personified emotions that guide the young girl across the process. The premise may seem like a gamble, but it's hard to bet against Pixar.
4. "Descendants" -- Summer
This is the one movie on the list that won't be showing at a theater near you. It's a Disney Channel original film, but one with an intriguing premise. It's a live-action feature in which the now teenage son of Beast and Belle decides to give the children of classic Disney villains a shot at redemption. The imprisoned offspring of Cruella De Vil, Maleficent, The Evil Queen and Jafar are invited to attend the same prep school where the children of many Disney heroes are being schooled.
Don't underestimate the Disney Channel. It has served as a launching pad for other movie-based franchises including "High School Musical" and "Camp Rock" that have proven magnetic to young, largely female audiences. "Descendants" should have even broader appeal given nostalgic parents and males alike who have seen Disney work similar magic by rebooting classic characters on ABC's "Once Upon a Time."
5. "The Good Dinosaur" -- Nov. 25
Pixar doesn't miss, making "The Good Dinosaur" stand out as the first potential flop out of the computer-animation arm that Disney acquired in 2006. The movie was originally set to hit theaters last summer, but a director change and story changes have bumped the release to the start of this year's holiday season.
These are bad omens that would normally doom most theatrical releases, but this is Pixar. It will make it work. It also only helps that the subject matter is dinosaurs interacting with humans, a niche that should be revitalized when rival Universal puts out "Jurassic World" in June.
"The Good Dinosaur" is an animated tale of Arlo, an apatosaurus that befriends a human boy. Yes, that does mean that the meteor crash that destroyed most life forms including dinosaurs never happened, but we're used to suspending disbelief when Pixar presents us with talking toys and traveling insect circuses.
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It didn't take long for Tidal to realize that it's not easy to take on Pandora (P) and Spotify. Last month's Jay Z-backed relaunch of the Swedish streaming site packed plenty of star power, but it's been fizzling out in a hurry.
Tidal's CEO stepped down in mid-April, and initial reports of layoffs haven't been shot down. We're also now seeing the Tidal app plummet in popularity from app charts, another ominous observation that Tidal's wave has washed out.
This is the kind of development that should scare Apple's (AAPL) Beats Music, which, like Tidal, is lining up celebrities and exclusive tracks in a bold attempt to get folks to pay up for music. It hasn't been working for Tidal. Folks apparently aren't interested in shelling out $9.99 a month for tunes -- and much less $19.99 a month for higher-quality clips -- when Spotify has proven itself as a premium on-demand platform of choice.
And the Beat Goes On
Tidal and Beats Music haven't had a problem drawing musical celebrities to fly their banners. They promise higher royalty rates, armed with subscription revenue that's greater than any advertiser is willing to pay to reach those listeners through ad-based models. The problem is that consumers aren't playing along. The majority of Spotify accounts and the vast majority of Pandora users are freeloaders.
The end result is that artists will get more money and exposure by reaching a potential audience in the tens of millions through either Pandora or Spotify than generating more per stream through the hundreds of thousands on Tidal or Beats Music. The initial star power that Jay Z helped attract to Tidal as an equity partner and the exclusive tracks that he provided apparently haven't been enough to get consumers to embrace digital music as something worth paying for -- at least through Tidal.
Pandora and Spotify have convinced a lot of people to be premium subscribers, and they now combine to have nearly 20 million of their 140 million collective listeners paying for enhanced listening experiences. The ad-supported platform enjoyed by the other 120 million music buffs serves as a gateway to recruit premium subscribers. In a gutsy -- and seemingly boneheaded -- move, Tidal and Beats Music have decided that the only way to consume either platform is to pay. That has made Tidal a hard sell in recent weeks apparently, and Beats Music will likely face a similar fate in June's expected relaunch.
Built to Last
Disruptors get disrupted, but it's a safe bet that Pandora and Spotify will still be around in a few years, entertaining even larger audiences than they do today. Pandora may even make a more ambitious push overseas.
Some of the music industry's biggest stars haven't been able to change that in recent weeks at Tidal, even though it should be noted that this battle is far from over. However, even the country's three largest technology companies -- Microsoft (MSFT), Google (GOOG) (GOOGL) and now Apple with Beats Music -- have faltered in taking market share with premium digital music platforms. There may one day come a model that truly challenges Pandora and Spotify, but there are no signs that that eventual disruptor is out there.
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 outour free report on the Apple Watchto learn where the real money is to be made for early investors.
DEARBORN, Mich. -- Ford's net income fell in the first quarter, hurt by lower sales of key vehicles like the F-150 pickup and a stronger U.S. dollar.
But the Dearborn automaker says the picture should improve as the year progresses, and it's still aiming for a full-year pretax profit of $8.5 to $9.5 billion, up from $6.3 billion in 2014.
We feel we are very much on track to that breakthrough year we talked about.
"We feel we are very much on track to that breakthrough year we talked about," Chief Financial Officer Bob Shanks said Tuesday.
Ford's net income fell 6.6 percent to $924 million in the January-March period. First-quarter earnings of 23 cents a share compared with earnings of 25 cents a share in the same quarter a year ago.
The results fell short of Wall Street expectations. Analysts surveyed by FactSet forecast earnings of 26 cents a share.
One reason for the miss: Analysts forecast a tax rate of 29 percent for the quarter, but Ford's actual rate was 34 percent. That difference was worth about 2 cents a share, the company said.
Revenue fell by 5 percent, or $2 billion, to $33.9 billion. That also fell short of forecasts of $34.3 billion.
Ford (F) shares dropped 5 cents to $15.86 in midday trading.
Shanks said 70 percent of the drop in revenue -- or around $1.4 billion -- was related to the strong U.S. currency. The dollar has climbed 8 percent so far this year against the euro and other major currencies. Last week, General Motors (GM) said that currency exchange cost it $1.8 billion in first-quarter revenue.
Ford's global sales fell 1 percent to 1.6 million. Sales rose in Asia and Europe but fell in North America, South America and the Middle East and Africa.
Slow Ramp Up
Ford said the continuing launch of its new F-150 pickup, which went on sale late last year, hurt North American sales because dealers don't yet have a full inventory. Two plants make the F-150, in Michigan and Missouri, but only the Michigan plant was fully operational in the first quarter after a longer than usual changeover to make the truck's body out of aluminum instead of steel. Ford's Kansas City plant started making the new truck on March 13.
Shanks said F-150 sales were down 40 percent for the quarter, or about 60,000 vehicles, and dealers aren't expected to have normal levels of trucks on their lots until this summer. Sales of the Ford Edge SUV were also down significantly -- about 15,000 vehicles -- as the company changed over to an updated model.
North American pretax profit fell 11 percent to $1.3 billion. Shanks said normal inventories of the F-150 and Edge, which are two of the company's most profitable vehicles, could have improved pretax profits by $1 billion and raised the region's operating margin from 6.5 percent for to more than 10 percent for the quarter.
Ford raised its guidance for full-year North American margins to 8.5 percent to 9.5 percent, up from 8 percent to 9 percent.
The company is struggling to sell small cars in the U.S., China and elsewhere; last week, it cut a shift at the Michigan plant that makes the Focus because of weak sales. But the upshot is that consumers are gravitating to SUVs, and Ford has several new or updated utilities going on sale this year, including the Ford Explorer and the Lincoln MKX.
While sales rose in Europe, particularly for commercial vehicles like the Transit van, revenue fell because of the stronger dollar. Ford lost $185 million in Europe in the first quarter, a $9 million improvement from a year ago.
In Asia, pretax profit fell by more than half to $103 million, partly because of the cost of launching the Lincoln brand in China. Ford plans to open 20 Lincoln dealerships in China this year.
Ford cut its losses to $189 million in South America, from $510 million a year ago, partly because of a big charge last year related to Venezuelan currency devaluation.
