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DailyFinance.com

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    Fed Minutes
    Jacquelyn Martin/APFederal Reserve Chair Janet Yellen
    By Michael Flaherty and Howard Schneider

    WASHINGTON -- U.S. Federal Reserve officials believed it would be premature to raise interest rates in June and that a bump in inflation was being offset by a weaker labor market and softer data, according to minutes from the central bank's April policy meeting.

    "Many participants, however, thought it unlikely that the data available in June would provide sufficient confirmation that the conditions for raising [interest rates] had been satisfied ... " said the minutes, which were released Wednesday.

    U.S. Treasury prices were largely unchanged after the release of the minutes, while short-term interest rate futures and TIPS inflation break-even rates held firm, as did stocks.

    The minutes from the April 28-29 meeting of the Fed's policy-setting committee also showed most participants expected the U.S. economy to pick up pace after a slowdown in the first quarter and that labor market conditions would improve.

    But Fed officials flagged a number of concerns weighing on the central bank, including disappointment that falling oil prices didn't spur consumer spending as much as had been hoped. They also cited economic worries in China and Greece.

    The minutes largely reflected the Fed's April policy statement, which pointed to economic softness but described the slow growth as reflecting, in part, transitory factors such as bad weather and a U.S. port disruption.

    Focus on Yellen

    Investors now will focus on a speech Friday by Fed Chair Janet Yellen for signs of whether she believes the economy is back on track after the first-quarter slump, or if she nods to the latest batch of weak U.S. economic data.

    Officials at the April meeting also mentioned concerns about bond market volatility and the possibility of long-term rates spiking when the central bank begins to raise rates -- a worry Yellen spoke of publicly earlier this month.

    The Fed also debated whether being more explicit in its post-meeting communication would avoid a worrying spike in long-term rates, though most participants said keeping to the meeting-by-meeting policy was best for now.

    "Energy prices were no longer declining and most participants continued to expect that inflation would move up toward the committee's 2 percent objective over the medium term," the minutes said.

    Out of 62 economists polled by Reuters, 50 expect the Fed to hike rates in the third quarter. Most policymakers have stuck to the mantra that the central bank will watch the data and assess on a "meeting-by-meeting" basis whether to raise rates, and have telegraphed September as a likely date for the first increase.

    A recent pull-back in the strength of the dollar and higher oil prices both received attention in the minutes. A lower greenback and higher energy costs are key factors in moving inflation higher and prompting the Fed to bump up rates in tandem with rising prices across the economy.

    The Fed has repeatedly said it will not raise rates until it is "reasonably confident" that prices are moving toward the central bank's 2 percent target.

    Some of that confidence appeared in the minutes, as it was noted that market-based inflation measures, while still low, had risen slightly.

    "Some participants pointed out that, by some measures, the most recent monthly inflation readings had firmed a bit."

     

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    Financial Markets Wall Street
    Richard Drew/AP
    By Noel Randewich

    NEW YORK -- U.S. stocks ended marginally lower Wednesday after Wall Street saw little in the minutes from last month's Federal Reserve meeting to alter expectations of when the central bank will raise interest rates.

    Following the minutes' release, the Dow and S&P 500 pushed into record territory before giving up their gains.

    Officials at the Fed's April policy meeting believed it would be premature to raise interest rates in June and that a bump in inflation was being offset by a weaker labor market and softer data, according to the minutes.

    They didn't give much tangible evidence that they were going to do anything different than what the market was already prepared for...

    "They didn't give much tangible evidence that they were going to do anything different than what the market was already prepared for, and I think that's why the net-net was a benign impact to financial markets," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

    The Dow Jones industrial average (^DJI) fell 26.99 points, or 0.15 percent, to end at 18,285.4. The Standard & Poor's 500 index (^GSPC) lost 1.98 points, or nearly 0.1 percent, to 2,125.85 and the Nasdaq composite (^IXIC) added 1.71 points, or 0.03 percent, to end at 5,071.74.

    The Dow had closed at record highs in the previous two sessions and Wednesday was briefly on track for another all-time high close.

    The S&P, also near record highs, is now trading at 17 times expected earnings, compared to its 10-year median of 15.

    Five of the 10 major S&P 500 indexes were lower Wednesday, led down by a 0.4 percent decline in the industrials index.

    Movers and Shakers

    Southwest Airlines (LUV) pushed airline shares lower with a drop of 9.1 percent after it forecast a decline in passenger unit revenue for the quarter. The Dow transports index lost 2 percent.

    Among four banks fined a total of $6 billion for manipulating currency rates, Citigroup (C) lost 0.8 percent and JPMorgan (JPM) fell 0.8 percent.

    While the Fed is broadly expected to raise rates this year, the timing of the move has kept the market on tenterhooks. A Reuters poll Tuesday showed most economists were now less sure about when rates would be increased, but the median still suggested a move in the third quarter.

    Growth slowed to a crawl in the first quarter, while recent economic data has painted a mixed picture. Consumption, business spending and manufacturing data have suggested the economy is struggling, but housing starts were strong.

    Advancing issues outnumbered declining ones on the NYSE by 1,571 to 1,426, for a 1.10-to-1 ratio on the upside; on the Nasdaq, 1,386 issues fell and 1,369 advanced for a 1.01-to-1 ratio favoring decliners.

    The S&P 500 posted 32 new 52-week highs and 4 new lows; the Nasdaq composite recorded 102 new highs and 54 new lows.

    About 5.8 billion shares changed hands on U.S. exchanges, below the 6.3 billion average this month, according to BATS Global Markets.

    -With additional reporting by Tanya Agrawal, Chuck Mikolajczak and Caroline Valetkevitch.

    What to watch Thursday:
    • The Labor Department releases weekly jobless claims at 8:30 a.m. Eastern time.
    • At 10 a.m., the National Association of Realtors releases existing home sales for April; the Federal Reserve Bank of Philadelphia releases its survey of manufacturing conditions in the Mid-Atlantic states; the Conference Board releases the Index of Leading Economic Indicators for May; and Freddie Mac releases weekly mortgage rates.
    Earnings Season
    These selected companies are scheduled to release quarterly financial results:
    • Advance Auto Parts (AAP)
    • Best Buy (BBY)
    • Dollar Tree (DLTR)
    • Gap (GPS)
    • Hewlett-Packard (HPQ)
    • Intuit (INTU)
    • Lions Gate Entertainment (LGF)
    • Ross Stores (ROST)
    • Toro (TTC)

     

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    Evlakhov Valeriy/Shutterstock
    By Gerri Detweiler

    If you have old unpaid debts, it can be helpful to know the statute of limitation that applies to those debts. If the statute of limitation has expired, a debt is said to be "time-barred," and a creditor or debt collector isn't supposed to sue you to collect. Here are the seven most common questions we've received from readers about this topic.

    1. How Long Is the Statute of Limitation for My Debt?

    The time period typically either starts when you fall behind on a debt, or from the date of your last payment, and the length of time depends on state law for that type of debt. This chart is a guide to state statutes of limitation. Unfortunately, it is not always clear-cut. So it's a good idea to check with your state attorney general's office, a consumer law attorney or legal aid, especially if you are being threatened with legal action.

    2. Does the Statute of Limitation Stop Debt Collectors?

    In many cases, no. However if you tell the debt collector not to contact you again, they must stop. It's a good idea to put your request in writing. Once they've received it, they can contact you only to confirm that they have received your request or to notify you of legal action they are taking to collect. In some states, however, trying to collect a time-barred debt is illegal and a creditor who attempts to do so is breaking the law.

    3. If the Statute of Limitation Has Expired, Can I Still Be Sued?

    It isn't uncommon at all for consumers to be sued for time-barred debts. If you are sued for an old debt and the statute of limitation has expired, you can raise the expired statute of limitation as a defense against the lawsuit (here are some other debt collection defenses you can use, too). However, many consumers do not appear in court and therefore the creditor or collector gets a judgment against them. That is why you should not ignore a legal notice about a debt, even if you think the debt is too old. A consumer law attorney or bankruptcy attorney can help you figure out how to respond.

    4. Should I Pay an Old Debt?

    That's something only you can decide. However, keep in mind that if you pay anything -- even a small amount -- on an old debt, you may restart the statute of limitation. That's why it can be risky to pay an old debt if you can't afford to pay it in full. You could open yourself up to collection efforts, or even a lawsuit, for the entire amount the collector says you owe.

    5. Will That Old Debt Still Appear on My Credit Reports?

    In many cases, the answer is yes. The length of time that negative information may be reported is governed by the federal Fair Credit Reporting Act. Most negative information can be reported for seven years. The statutes of limitation for most consumer debts, on the other hand, is four to six years. So you could have a situation, for example, where the statute of limitation expired on a debt in four years but the related collection account still appears on your credit reports for another three years after that. Collection accounts can do serious damage to your credit scores. You can get a free credit report summary on Credit.com to see if an old debt is affecting you.

    6. I Took Out a Debt and Then Moved. Which State's Rule Applies?

    That can be difficult to answer. Consumers can generally be sued in the state where they took out the loan or the state where they currently live. Sometimes the statute of limitation will be based on the laws of the state described in the contract (in the case of credit cards, that will be spelled out in the credit card agreement).

    When it's not clear which state's statute of limitation applies, it is often up to the court to decide. In a number of court cases, the statute of limitation that was shortest was applied. But that's not true in all cases. That's why it is helpful, if you are being sued for a debt, to consult with a consumer law attorney who can help you understand whether the statute of limitation has likely expired.

    7. What Is the Statute of Limitation​ for Court Judgments?

    If a creditor or collector has obtained a court judgment there is often a separate statute of limitation that applies to judgments. If you have unresolved debts, be sure to at least get your free annual credit reports to see if any judgments are listed. In many states, that time period is 10 years or longer, and judgments may be renewed. Learn more about how about judgments work here.

    Gerri Detweiler is Credit.com's director of consumer education.

     

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    Couple with Coffee and Prezels in City Park, New York City, New York, USA
    Jupiterimages
    By Tom Sightings

    If your 401(k) plan is doing OK and your Individual Retirement Account is flushed out, you may think you're doing pretty well for retirement, especially compared to your parents who likely saved a small portion of what's sitting in your retirement account. The problem is, you need a lot more money than your parents did to enjoy a similarly affluent or even comfortable retirement. Here are six reasons you need more money to retire than your parents did -- and more money than you probably think.

    1. Life Expectancies Have Increased

    In the 1950s, the average American life expectancy was 68 years. Today it is 79 years. In other words, we're living a decade longer than our parents did, and most of those extra years occur during retirement. Of course, for the most part, this is a good thing. But it does mean we have to finance another 10 years of retirement at a time when we're still spending money but no longer earning a paycheck.

    2. Social Security Doesn't Pay as Well

    In 1983, President Reagan and Congress made a deal to overhaul the Social Security system. For the first time, benefits were subject to federal income tax. Some states also tax benefits. In addition, the retirement age was raised for future beneficiaries. So now the full retirement age (the age you qualify for full benefits) for people born between 1943 and 1954 is 66 instead of 65. For people born after 1954 the full retirement age will gradually increase until it reaches 67 for those born after 1959. The results of these changes: Some of our current benefits are taken back in taxes, and our lifetime benefits are curtailed because we start receiving them a year or two later.

    3. The Pension System Has Changed

    In recent years many private corporations have shifted from defined benefit plans to defined contribution plans. This means that companies are willing to chip in to your retirement fund through 401(k) plans or similar types of retirement accounts, but they are no longer taking the responsibility for providing you with a guaranteed income for life. Now, to afford a good retirement, it's up to you to save enough money, invest it wisely and avoid all the financial pitfalls that can jeopardize your future income.

    4. Out-of-Pocket Health Care Costs Are Rising

    Over the last couple of decades health care costs have increased at two and three times the rate of general inflation. Even today, with inflation close to zero, medical expenses are increasing at a rate of 2 to 4 percent. The cost of medical care has gone up, deductibles have grown, the cost of insurance has increased and retiree out-of-pocket health costs have been rising, again resulting in a need for more wealth at retirement.

    5. Interest Rates Are Low

    For the past half dozen years the Federal Reserve has kept interest rates artificially low, which presumably helps the economy by encouraging people to buy cars and houses. But this comes at a cost to people who have saved up money for retirement. The interest you get from a 10-year bond or the dividend you receive from many stocks is less than 2 percent. Your parents could put money in the bank and draw 5 percent interest. The rate you get from a bank today is virtually zero. So no matter how you invest it, you need more wealth to generate a given stream of income.

    6. The Kids Are Still on the Payroll

    A lot of adult children have moved back home due to financial pressures. According to a survey by Pew Research, some 36 percent of 18 to 31-year-olds were still living at home in 2012. But even if the kids have moved out, a lot of parents still want to help -- whether it's helping to pay off college loans, subsidizing their rent, paying travel costs for family reunions or contributing to college funds for the grandchildren. All these activities come from a generous place in the heart, but they all cost money and create yet another burden for your retirement nest egg.

    Tom Sightings is a former publishing executive who was eased into early retirement in his mid-50s. He lives in the New York area and blogs at Sightings at 60, where he covers health, finance, retirement and other concerns of baby boomers who realize that somehow they have grown up.

     

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    Couple walking at beach smiling
    Getty Images
    Retiring at 40 seems like an impossible dream. Just making it to the golden years by 65 is challenging enough. Yet, there are a growing number of early retirees who have managed to call it quits in their 30s and 40s.

    So it is with Chris, who goes by the name of "Elephant Eater" on his blog, EatTheFinancialElephant.com. The motto of the blog is "Working toward financial independence and early retirement -- one bite at a time." That motto should give you a solid idea of what it is he writes about.

    I had an opportunity to interview Chris on the topic of his journey to early retirement at age 40. He provided fascinating insight into the nuts and bolts of extreme early retirement. While Chris is 38 and his wife is 37, they are just a couple of years away from making retirement at 40 a reality. Still, when it comes to money, they are light years ahead of their peers.

    How are they doing it -- especially with a two-year-old daughter?

    Live Beneath Your Means

    According to Chris, the "secret" to their success has been not just living beneath their means, but well beneath. Since graduating from college in 2001, they have lived off of one paycheck and banking the other.

    The one paycheck strategy started when Chris's wife graduated from college. They lived off of her salary of $36,000 while Chris finished his last year in graduate school. When Chris began working and earning a similar paycheck, they continued living on his wife's income. They dedicated his paycheck to paying off her car loan and student loan.

    There's no magic here. Chris and his wife lived off of her income while dedicating his paycheck to improving their finances. This strategy enabled them to devote an entire income to paying off debt and saving money. They've continued to operate in that mode since 2001, which explains why they are nearing retirement.

    Ignore the Consumption Trends Around You

    For Chris and his wife, living on one paycheck and banking the other became a lifestyle. But it wasn't one that was without the typical distractions. While they were paying off debt and saving money, many of their friends were busy improving their standard of living. Most bought new cars, and some traded up to larger houses. It was a trend that Chris and his wife resisted.

    They bought a small house in 2003. Rather than trading up to a new and larger home, they paid off the mortgage in seven years. They still live in the same home today.

    They followed the same pattern with their cars. Instead of buying new, they bought older, used cars -- for cash -- then drove them until the car died. Until three years ago, Chris drove an older Chevy Malibu for eight or nine years while his wife drove the same car she had in college. We're talking about driving cars that were well over 10 years old. That's not something that many couples do these days.

    But it's that willingness to live well beneath their means that has enabled Chris and his wife to live on a single paycheck. And while some might call it a sacrifice, it's led to several benefits. For one, there's the rapidly growing savings account, which is fed monthly by the extra income they earn. Meanwhile, they've also been able to take some exotic trips. For example, they have traveled to Africa, Australia, Ecuador and all over the United States.

    Save As If Your Life Depends On It -- And One Day it Will

    "Saving as if your life depends on it" is the cornerstone of the early retirement concept Chris and his wife embraced early in their marriage. While most couples save 10, 15 or as much as 20 percent of their income, Chris and his wife have been saving 50 percent. When you can save that much money, the whole idea of early retirement becomes much more likely.

    Since Chris and his wife earn approximately the same income and save one paycheck, their average savings rate sits around 50 percent. That isn't a static number. Some years they've managed to save "only" 40 percent, while in others it's been at 60 or even 70 percent. With a combined income now in the $170,000 to $180,000 range, that's a lot of savings.

    Saving 50 percent has two related benefits. First, and most obvious, is that it has enabled Chris and his wife to save mountains of cash. Second, and just as important, it keeps their spending requirements in check. Since they live off of 50 percent of their gross pay, they don't require as much capital to retire. To see this dynamic in action, check out this Financial Freedom Calculator.

    Adopt a Zero-Tolerance Attitude Toward Debt

    Part of what has enabled Chris and his wife to save such a large percentage of their income is their complete aversion to debt. As noted earlier, they paid off their mortgage in seven years and eschewed car payments in favor of older, paid-off models. Since debt is often a savings-killer, Chris and his wife committed to avoiding it like the plague early on, with a few exceptions. For example, they took on debt to buy their home, but paid it off quickly.

    After some time, Chris and his wife found that a debt-free lifestyle also came with its own set of benefits. With no debt and plenty of cash on hand, they felt far less pressure to get the things that debt typically buys. They found themselves content to lead a modest life, to control their cash flow, and to travel. They found that their frugality and high savings rate could buy freedom, and they relished in the purchase.

    Recognize that Mistakes Aren't the End of the Line

    Interestingly, Chris concedes that he and his wife have made some mistakes along the way. For example, in the early 2000's, they were busy paying off their mortgage. While that has been a huge boon for them, the "return" they earned for prepayment was only equal to the interest rate on their mortgage. According to Chris, they could have done much better by investing in stocks and in real estate.

    But that wasn't their only "mistake." Three years ago, when his wife became pregnant, they gave into peer pressure and purchased two brand-new automobiles. The prospect of having a child made them believe that they had to default to more common aspirations.

    Meanwhile, they've also had issues on the investment front. They've hired and fired some investment managers, some of whom did a poor job of managing their money. Though adept at living beneath their means, avoiding debt, and saving, they weren't skilled investors.

    The saving grace is that Chris and his wife are doing the big things right. They are living beneath their means, they are staying out of debt, and they are saving 50 percent of their income. Those are each financial fundamentals. When you get those right, you can afford to make a few mistakes without having your plans completely crushed.

    Early retirement is possible, but you have to master the basics of good money management. While many people focus their energy on finding the right investments, lowering investment fees, and getting the best rates on mortgages and credit cards, none of those efforts match the benefits of saving 50 percent of your income.

    If you get the basics right, retiring early can become much less of a dream and much more of a reality. And as Chris' story goes to show, you don't have to do everything perfect either.

     

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    What You Need to Know About LED Lighting

    By Marilyn Lewis

    There's nothing but good news these days about LED (light-emitting diode) bulbs. The prices have come down (they still cost more to buy than incandescent bulbs, but they'll save you wads of money in the long run.) You can choose warmer colors of light instead of the harsh, too-white light from older LEDs. And you'll find more bulbs that work with your home's dimmer switches.

    The benefits of LED lights are clear. MIT Technology Review sums them up:

    For the consumer, the main benefits of LED fixtures are clear: they're energy efficient, can last for more than 20 years and, in many cases, give off good light. The prices have gone down steadily as well as the LED components have dropped in price and lighting companies introduce better designs.

    Consumers have suffered from confusion when selecting bulbs, however. It's not surprising. LEDs come in different shapes and colors of light, and it's hard to know at a glance how they compare in brightness to our favorite incandescent bulbs.

    To simplify the experience of buying and using LED bulbs, here's what you need to know, boiled down into five rules:

    1. Install LEDs where you'll use them most. LED bulbs are still expensive and so, unless you have the budget to replace all the bulbs in your home at once, you'll have to replace bulbs as they burn out. In the long run, your investment will pay you back in energy savings.

    But, as Money Talks News founder Stacy Johnson has learned, it matters where you use your LED bulbs if you hope your investment will repay you soon. Put an LED in your closet, for example, or another place where the bulb is seldom used, and it may be years and years before the bulb's cost is repaid in energy savings. It's best to use your LEDs where the payoff will be fastest, in the light fixtures that get most use in the high-traffic parts of your home.

    2. Shop for lumens, not watts. Watts are a measure of how much energy the bulb draws, not its brightness. Nevertheless, we are accustomed to shopping for incandescent light bulbs by their watts, and we know how much light to expect from a 60-, 100- or 150-watt bulb.

    LED bulbs also are rated by watts. But that's no help because there's no easy way to compare LED watts with incandescent watts. "[T]here isn't a uniform way to covert incandescent watts to LED watts," says CNET.

    Now, instead of watts, use lumens as the yardstick for brightness. Packaging on LED bulbs rates brightness in lumens (and in watts). To replace a 150-watt incandescent bulb, look for an LED rated at 2600 lumens (25 to 28 LED watts), CNET says. Here's CNET's handy comparison chart:

    Incandescent LED Lumens
    25 watts 3-4 watts 250
    40 4-5 450
    60 6-8 800
    75 9-13 1,100
    100 16-20 1,600
    120 21-23 2,000
    150 25-28 2,600

    3. Get the light color you want. If you were turned off by the harsh white quality of light from older LEDs you'll be glad to know there are more options now. LED bulbs offer a range of colors, from a warmer yellow-white, akin to the color of incandescent bulbs, to a whiter white or blueish white.

    Check a bulb's package for its light color, shown by its temperature on the Kelvin Scale (learn more from Khan Academy). Lower Kelvin numbers mean warmer-colored light. The higher the Kelvin number, the bluer the light. EarthEnergy, a retailer, offers this guide to shopping for LED bulbs:
    • Yellow light: 2700-3000 K
    • White: 3500-4100 K
    • Blue: 5000-6500 K
    4. Match the bulb shape to your fixture. LED bulbs come in a number of unfamiliar shapes. You'll find spiral bulbs, different types of globes, spotlights, floodlights and some shaped like candle flames. One useful shape is the MR16, a smallish, cone-shaped bulb.

    Which bulb will work in your can lights? Which is best for the ceiling-fan light? For a table lamp? This brief, illustrated Energy Star guide and EarthEnergy's bulb guide show which shapes work best in various types of fixtures.

    5. Choose the right bulb for dimmers. Another problem with LEDs used to be finding bulbs that were compatible with the dimmer switches in your home. Some buzz, flicker or just fail to respond to a dimmer switch.

    Those still can be problems, but CNET tested 6 bulbs and has a recommendation. The Philips 60-watt LED performed best. It's easily found in stores, but don't confuse it with the less-expensive Philips SlimStyle LED, which buzzed badly in a dimmer (although it may be good for other uses). The Philips bulb isn't the only solution. Read bulbs' packaging to find the ones recommended for use with dimmer switches.

    Or take another route: Replace your dimmer switches. Popular Mechanics says:

    The solution is to buy a dimmer switch rated for both CFL and LED bulbs. Two reputable manufacturers of CFL/LED dimmers are Leviton and Lutron; both provide lists of bulbs they've verified will work with their dimmers.

    Count the Savings

    Still wondering if LED bulbs are worth the trouble? A look at the cost savings may persuade you. Here's a chart at Energy.gov comparing the cost of operating a 60-watt incandescent bulb and an equivalent 12-watt LED.

    The LED:
    • Costs $1 a year to run vs. $4.80 for the incandescent bulb.
    • Cuts your spending on electricity by 75 percent to 80 percent.
    • Burns for about 25,000 hours vs. 1,000 hours for the incandescent bulb.
    An online search shows the cost of a 12-watt LEDs is roughly $10 to $30 each vs. about $1 for a plain 60-watt incandescent bulb. Start planning now for what you'll do with all the money you'll save from converting to LEDs.

    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!

     

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    Asian college man with diploma classmates
    Getty Images
    To the new graduates of the class of 2015: Congratulations on your tremendous accomplishment. As you start your life and career, know that a world of opportunity awaits you. You have a future in front of you that your older soon-to-be-coworkers can only dream of.

    One such opportunity available to you is your once-in-a-lifetime shot at setting yourself up to become a multimillionaire by the time you retire. Unfortunately, the chance is only available for a limited time, and the longer you wait to claim your chance at earning that elusive status, the tougher it will be for you to get there.

    Why You Have This Chance at $2 Million or More

    The key reason a $2 million nest egg may be within your reach is because you have three key advantages your older co-workers don't have.

    Advantage No. 1: Your age. The younger you are, the more time your money has to grow before you retire. One rule-of-thumb guideline in investing is known as the Rule of 72. To use it, you divide 72 by the rate of return you anticipate earning on your investments, and the result is the approximate number of years it will take for your money to double.

    Over the long run, the stock market has returned a bit more than 9 percent in annualized returns. If that keeps up, the Rule of 72 indicates that money you invest in stocks could double about once every eight years. If you've got a 40-year career ahead of you, your money can potentially double five times. As a result, every $1,000 you put away this year can potentially be worth $32,000 at retirement.

    That advantage rapidly diminishes, however. If you wait a few years to "establish yourself" before you start investing, you'll lose one or more of those doubling periods. Miss just a single doubling period, and that $32,000 for each $1,000 invested becomes $16,000 instead.

    Advantage No. 2: Your lifestyle. As you're just preparing to start out in life, you likely have few of the "trappings of success" that may have afflicted your more established coworkers. Indeed, if you're used to living like a broke college student, continuing a similar lifestyle once you find yourself gainfully employed is one of the best tools you have to reach multimillionaire status.

    Consider college-like choices such as living with a roommate, driving a reliable used car or taking public transit, buying food in bulk and getting creative with leftovers, and shunning small luxuries like cable TV. On top of that, you can better stretch your paycheck by doing things like keeping your wardrobe simple (but appropriate for your chosen career) and sticking to a limited budget for "office networking" activities.

    Because you're just starting out, aside from potential student loans, you likely don't have high embedded lifestyle costs that, once you start getting used to them, can be surprisingly hard to get rid of. Keep your lifestyle costs as close to that "broke college student" state as you can for as long as you can, and you'll be surprised at how much easier it will be to find money available to invest for your future.

    Advantage No. 3: Your health and vitality. Generally speaking, as we humans age, our health care costs increase. The younger you are, the less likely you are to have a serious and expensive health condition. That helps you in two ways. For one, the healthier you are, the less you're spending directly on health care. Also, the healthier you are, the more likely you are to be able to either work extra hours at your job or at a second job to come up with some spare cash to invest.

    Leverage Your Advantages for Your $2 Million Opportunity

    Those three key advantages give you the opportunity to become a multimillionaire, but only if you put them to work for you. The table below shows how much you have to invest each month to wind up with $2 million, depending on how long you invest and what rate of return you earn:

    Years 10% Annual Returns 8% Annual Returns 6% Annual Returns 4% Annual Returns
    45 $191 $379 $726 $1,325
    40 $316 $573 $1,004 $1,692
    35 $527 $872 $1,404 $2,189
    30 $885 $1,342 $1,991 $2,882
    25 $1,507 $2,103 $2,886 $3,890
    20 $2,634 $3,395 $4,329 $5,453
    15 $4,825 $5,780 $6,877 $8,127
    Calculations by author

    By starting as a young professional just out of college and investing for long-run stock market potential returns, just a few hundred dollars per month can get you to multimillionaire status at retirement. But notice how much substantially more expensive that gets the longer you wait. If you think it's tough coming up with $300 a month as a new hire, think how tough it will be to go from $0 to $1,500-plus per month as a mid-career professional who didn't leverage those advantages.

    The market provides no guarantees, of course, but all else equal, the sooner you get started, the less you have to put away each month and overall to reach your goal.

    You Don't Have to Go It Alone

    Perhaps best of all, you are very likely to be able to get help coming up with the money to invest, from your boss and Uncle Sam. If your job offers a 401(k), 403(b), TSP or similar qualified retirement plan, you can contribute up to $18,000 a year to that plan if you're under age 50.

    In a traditional style plan, you contribute pre-tax dollars, which means Uncle Sam covers part of the cost through you having less money subject to income taxes. In a Roth style plan, you pay taxes on your contributions, but you can potentially withdraw your money tax-free in retirement. In either case, your money grows tax-deferred while in the plan.

    On top of those advantages, if your employer offers a matching contribution, that's additional money going toward your plan that doesn't come out of your pocket. Between the match and the tax break, you can potentially double the money going toward your investments when compared to what it costs you out of pocket.

    Regardless of whether your boss offers such a plan, if you have earned income, if you're under age 50 you can contribute up to $5,500 a year to an IRA. IRAs likewise come in both traditional and Roth varieties, with the traditional offering a potential tax deduction for your contribution and the Roth offering the potential of tax-free withdrawals in retirement. Both styles offer tax deferrals while your money remains in the plan, compounding on your behalf.

    Between Uncle Sam and your boss, you can get some serious help reaching your savings goals. The dollars in the table above don't care whether they came from your pocket, your boss's or Uncle Sam's. As long as they find their way to your account, they can be put to work for you.

    Class of 2015: Get Started Now

    As a young adult graduating as a member of the class of 2015, you have a tremendous opportunity to become a multimillionaire. The sooner you get started, and the more consistently you invest toward that goal, the better your chances are of reaching it successfully. The longer you wait, the tougher and more expensive it will be for you to turn that goal into your reality.

    If you can't invest your full targeted amount on your entry-level salary, don't despair. Invest what you can, and work your way up to your target over time as your salary increases and you figure out how to trim costs from your budget. No matter what your starting state, one of the most important steps you can take is to get started now, to put time and your other advantages firmly on your side.

    Chuck Saletta is a Motley Fool contributor. Try any of our Foolish newsletter services free for 30 days. Looking for a way to start off your portfolio? Check out The Motley Fool's one great stock to buy for 2015 and beyond.

     

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    Man thinking
    Maskot
    By Brian O'Connell

    A watershed demographic event occurred in the past few years, although without much notice: For the first time in U.S. history, there are more people who are single than married -- 124.6 million singles (among 248.2 million people 16 and older) compared with 123.6 million who are married as of last year.

    We'll leave it to the sociologists to figure out what that means demographically. Financially, singletons have their own challenges. Take estate planning. "Everyone of majority age needs at the least a will, a health care directive and a named power of attorney," says Mike Sena, a certified financial planner with White Street Advisors, a money management firm. "The express purpose of estate planning is to make things as easy, as inexpensive and as simple as required for loved ones, friends and associates left behind. Every situation, every life is unique -- and some of us need more than others when it comes to estate planning."

    Disability and long-term care insurance becomes more important to singles because "there is no spouse or partner to rely on for help with covering expenses in case of incapacity and inability to work," says Shelley Cabangon, a senior wealth planner at PNC Wealth Management in Palm Beach, Florida.

    Someone to Plan for You

    Married people also have a spouse who can make medical decisions on their behalf, but single people must plan for medical contingencies, says Karen Lee, an accredited estate planner with Karen Lee & Associates in Atlanta. "A single person needs to draft a durable power of attorney for medical and financial needs in the event they are incapacitated and unable to speak for themselves." Lee also says singles need to consider who will inherit their assets if and when they die -- otherwise the laws of the state will prevail -- which makes a living will with advance directives a good idea.

    "I just had a client become disabled due to a brain injury," Lee says. "Although he had written a will in 1997, he never had a power of attorney. He was not only single and had no kids, he was an only child. There was no one to help make medical or financial decisions." Lee says her client's first cousin stepped up but had to go to court to get granted conservatorship to make decisions on his behalf. "That took four months. And even after, all decisions had to be made with the court approval. It was a colossal mess."

    Jeffrey Carbone, co-founder of Cornerstone Financial Partners, a North Carolina wealth management firm, lists and comments on five key documents singles needs to have for estate planning purposes:
    • Power of attorney. "That's very important, especially for a single person, as it allows for someone to act on your behalf if you are unable to do so. You want to have someone you trust."
    • Health care power of attorney. "This allows you to have someone make health care decisions if you are unable to."
    • Revocable trust. "A revocable trust is a private document to pass assets on."
    • Living will. "This is a document that has your health care wishes known."
    • Will. "A will is a public record to pass along and carry out your intent."

     

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    CVS-Omnicare-Acquisition
    Matt Rourke/AP
    By TOM MURPHY

    CVS Health will pay more than $10 billion for pharmaceutical distributor Omnicare in a deal primed to feed its fast-growing specialty drug business and tap a lucrative and growing market: care for the elderly.

    The acquisition announced Thursday will give one of the nation's biggest pharmacy benefits managers national reach in dispensing prescription drugs to assisted living and skilled nursing homes, long-term care facilities, hospitals and other care providers. Omnicare's long-term care business operates in 47 states and the District of Columbia.

    The deal also will bring in more business doling out specialty drugs. These complex and expensive medications for cancer, hepatitis C and other conditions can represent treatment breakthroughs but are raising growing concerns over cost. Insurers and other bill payers want help containing that expense.

    Specialty drug revenue soared 46 percent for CVS Health in the first quarter, helping the company trump analyst expectations and make up for a sales hit from its decision to stop selling tobacco products last year in its drugstores. CVS Health also runs the nation's second largest drugstore chain, trailing only Wagreens Boots Alliance Inc.

    Omnicare's core business involves distributing drugs and providing pharmacy services to long-term care providers, a market CVS Health doesn't currently serve.

    CVS Health CEO Larry Merlo told analysts that represents a "substantial growth opportunity" for his company, with the U.S. population aging.

    U.S. Census Bureau researchers have predicted that the population age 65 and older will approach 84 million people by 2050, nearly double its total in 2012, due largely to the aging baby-boom generation.

    Omnicare significantly expands our business and provides us with access into a new pharmacy dispensing channel.

    Merlo noted that older people are more likely to take several medications and can have trouble making sure their prescriptions follow them as they move from their own home to long-term care or other settings. He believes his company can help ease these transitions.

    "Omnicare significantly expands our business and provides us with access into a new pharmacy dispensing channel," Merlo said.

    Last June, Omnicare agreed to pay $124 million to settle lawsuits that alleged it gave kickbacks to some facilities so they would keep the company as their drug provider for elderly Medicare and Medicaid recipients. Omnicare said it settled the case to end litigation and committed no wrongdoing.

    CVS Health said Thursday that it would spend $98 in cash for each Omnicare share in a deal that has already been approved by the boards of both companies. The deal's total value is $12.7 billion counting about $2.3 billion in debt.

    Omnicare shareholders still need to approve the acquisition, and the companies expect the deal to close near the end of the year.

    CVS Health said the addition of Omnicare will add about 20 cents to its adjusted earnings next year, excluding deal costs, and it will become more beneficial in subsequent years.

    Shares of Woonsocket, Rhode Island-based CVS Health (CVS) climbed 2.7 percent, or $2.74 to $104.01 in Thursday morning trading, while broader indexes edged up slightly. Omnicare (OCR) advanced $1.31 to $95.94.

    -AP Business Writer Damian J. Troise contributed to this story from New York. Murphy reported from Indianapolis.

     

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    Earns Domino's
    Douglas C. Pizac/AP
    Your next Domino's (DPZ) order is just a Twitter (TWTR) post away. The pizza delivery giant is making it as easy as possible to order your next pie, once you get past the initially cumbersome setup process.

    Registered users at Domino's website can set up a Pizza Profile, designating the order of choice as an Easy Order, and tethering a Twitter account to their Domino's profile. They then need to make sure that they follow @Dominos on Twitter so they can receive an order confirmation by Direct Message.

    Those are a few of the hurdles that need to be cleared, but it's smooth sailing after that. The next time a hankering for some pizza strikes, a simple Twitter post mentioning @Dominos -- and either the #EasyOrder hashtag or a pizza slice emoji -- gets the process started.

    It's trendy. It's gimmicky. It also might not be right for you. Let's go over three reasons you may want to order your pizzas the old way.

    1. Discounting the Discounts

    A big problem with having a preset order is that you might miss out on a special promotion. This isn't necessarily a big problem at Domino's. It tends to offer everyday discounted pricing on signature items, unlike rival Papa John's (PZZA), which routinely offers online coupon codes to get 25 or 50 percent off an order.

    However, if you're married to your Easy Order, you might miss out on some of the new promotions or even new items that Domino's has to offer. In short, it could cost you money to go the "tweet-to-order" route.

    2. Pizza Snob Shaming

    Another hurdle to set this up is that you must make your tweet to @Dominos public. That's the only way that the chain can see your order. In other words, everyone who's following you on Twitter will know that you're settling for Domino's delivery for dinner.

    There's nothing wrong with Domino's. It has made some welcome food quality improvements in recent years, and the specialty chicken is outrageously tasty for those who want something other than pizza. However, there could be some friendly backlash from publicizing your order, even if Domino's is only hoping that this will make the "tweet-to-order" platform go viral.

    3. Security Concerns

    Domino's just launched the new platform Wednesday, so it remains to be seen if there are any glitches along the way. However, it doesn't take a lot of imagination to see how nefarious Internet users could try to take advantage of the platform.

    A public tweet by someone who can be easily identified could result in them being victimized by someone posing as Domino's trying to verify the payment information. Let's not play innocent; you know this will happen. Even if it's a friendly prank, public orders on a social media platform with more than 302 million monthly active users is going to open the door to some unwelcome attention. Unless your Twitter account does not make it easy for an outsider to identify who you are, you may want to pass on the new social ordering method.

    Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Twitter. Try any of our Foolish newsletter services free for 30 days. Is your portfolio ready for what this year has to offer? Click here to check out our free report for one great stock to buy for 2015 and beyond.

     

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    Mortgage Rates
    John Locher/AP
    By Jason Lange

    U.S. home resales unexpectedly fell in April as tight inventories pushed prices higher, giving a cautious signal on the strength of the housing market.

    The National Association of Realtors said Thursday existing home sales dropped 3.3 percent to an annual rate of 5.04 million units.

    March's sales pace was revised up to 5.21 million units from the previously reported 5.19 million units. Economists polled by Reuters had forecast home resales rising to a 5.24 million-unit pace last month.

    The relative weakness in home resales puts a dent in what had been one of the brighter spots of the broader U.S. economy after gross domestic product barely grew in the first quarter.

    The number of homes on the market last month fell 0.9 percent from a year earlier, helping push the median home price up 8.9 percent from the same month in 2014.

    Weak Manufacturing

    In another report, the Philadelphia Fed said its business activity index dipped to 6.7 this month from 7.5 in April.

    Any reading above zero indicates expansion in the region's manufacturing. Manufacturing has been pressured by a strong dollar and deep spending cuts by energy companies whose profits have been squeezed by lower crude oil prices.

    "This is consistent with our expectation that the domestic manufacturing sector will continue to face headwinds from the lagged effects of a stronger dollar and lower energy prices," said Jesse Hurwitz, an economist at Barclays in New York.

     

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    Justice Dep't To File Criminal Charges Against Lumber Liquidators
    Scott Olson/Getty Images
    By MICHELLE CHAPMAN

    NEW YORK -- Lumber Liquidators CEO Robert Lynch has abruptly quit the company that is embroiled in an investigation over products imported from China.

    Shares tumbled 15 percent in morning trading Thursday.

    The company said Lynch resigned "unexpectedly" and declined to provide more details on the resignation when asked by The Associated Press.

    The company earlier this month said that it had suspended the sale of all laminate flooring made in China after disclosing that the Justice Department is seeking criminal charges against it. At the time Lumber Liquidators said that it decided to suspend the sales while a board committee completes a review of its sourcing compliance program. The CBS news show "60 Minutes" first reported in March that the Chinese-made laminate flooring contained high levels of the carcinogen formaldehyde.

    Lumber Liquidators has sent thousands of free air testing kits to customers since early March. It has said that more than 97 percent of the kits from customers with laminate flooring from China showed formaldehyde air concentrations that fell within World Health Organization guidelines.

    The company has said that it has stopped buying Chinese laminate flooring for now, opting instead for products from parts of Europe and North America.

    Lynch, who also served as president and a director, was in the CEO position since January 2012, according to CapitalIQ.

    Lumber Liquidators Holdings Inc. said that its founder, Thomas Sullivan, will take over as acting CEO while the Toano, Virginia-based company searches for a replacement.

    The company also announced that lead independent director John Presley was named nonexecutive chairman.

    Lumber Liquidators (LL) stock fell $3.80, or 15 percent, to $21.47 in morning trading.

     

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    Best Blender For Your Buck
    Looking for a new blender to make those smoothies? With so many models on the market today, it can be hard to know which one is right for you. Before you start shopping, here are some tips to help you find the best blender to fit your needs, and your budget.

    First, when choosing a model, think about what you'll be using it for. If you're only going to be making shakes or smoothies, then a personal blender can be a great option. Not only are they easy to use, but the mixing containers double as travel mugs, which is perfect if you're always on the go. Plus, most sell for around $20, making it convenient for your budget, as well.

    However, if you need something larger, check out a standard countertop blender. These cost around $150 and can mix up to 64 ounces of homemade salsa, whipped cream and frozen beverages. If that's more than you want to spend, there are smaller options for around $40. They don't hold as much, but they can perform just as well as the larger standard blenders.

    If you need to do more with your blender, then look into a high-performance model. They'll allow you do things like make homemade sauce, puree soup, or make your own peanut butter from scratch. These can cost up to $500, but be careful, paying more money doesn't mean you're getting a better blender.

    Look closely at the functions of your blender, too. How many speeds do you really need? Three is usually enough, and anything over 12 can be overkill. Consider what the controls are like, too. Dials are easier to clean than push buttons, but they're also less precise when controlling speed.

    In terms of wattage, most manufacturers will claim that higher wattage means higher performance, but that's not always true. According to tests by Consumer Reports, many lower wattage blenders performed just as well as more powerful options; they just take a little bit longer to get the job done.

    The next time you're blender shopping, remember these tips to find the right one for you. You'll see that you can still get one with high performance, without the high price.

    View Poll

     

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    Collecting the usual junk mail from your postbox, this man checks through his mail.
    Alamy
    Amazon.com (AMZN) wants to deliver your next package by air, with the help of drones. That's no longer news -- but here's something that is: The U.S. Postal Service is looking into drone delivery as well.

    Package for You, Miss!

    USPS reported its second-quarter financial results earlier this month. And as you may expect, the news was pretty poor -- $1.5 billion in losses for the quarter, continuing struggles to pay "retiree health benefit prefunding" and an antiquated infrastructure that's in sore need of upgrades.

    One bright note in an otherwise bleak report: "Package Volume increased 14.4 percent over same quarter last year." Turns out, this single segment of USPS's business, package delivery, is now "a key business driver" in the Post Office's efforts to raise revenue to offset continuing declines in the amount of plain-vanilla (manila?) letter volume.

    And that could be a problem.

    Trouble in Paradise

    According to USPS CFO Joseph Corbett, the Post Office's shifting role away from carrying letters, and toward carrying packages, is rapidly wearing out its truck fleet. Not long ago, Corbett admitted that USPS needs to spend about $10 billion over the next few years to "replace our aging vehicle fleet, purchase additional package sorting equipment and make necessary upgrades to our infrastructure."

    What he didn't say is that he wants to replace the vehicles with drones.

    Duck and Cover!

    Not replace them entirely with drones, of course. But according to multiple media reports, drones may form a part of Corbett's plan to remake USPS's vehicle fleet for the 21st century.

    Most of the 15 manufacturers bidding to rebuild the USPS truck fleet fall under the "usual suspects" label: AM General, Fiat Chrysler (FCAU), Ford (F), and Nissan among them. These trucks are expected to cost anywhere from $25,000 to $35,000 apiece, and should be drivable for 20 years -- with the ability to incorporate upgrades over that lifespan. USPS plans to buy 180,000 of them, so the trucks alone could cost USPS as much as $6.3 billion.

    Adding to that cost, though, USPS has admitted one quirky company to its competition, which features the addition of "drone" technology to its truck. The company in question: tiny startup Workhorse Group, whose electric "Workhorse" truck carries a "HorseFly" drone on its roof to aid in package delivery.

    HorseFly is said to weigh 15 pounds, and to be able to dart out and deliver 10-pound packages at speeds of up to 50 mph before returning to base. The idea is that upon entering a neighborhood, a mail carrier would deliver most packages by the usual procedure, tooling around the neighborhood at 15 mph, making dropoffs in each mailbox.

    But for outlying locations -- say, a lone farmhouse off the beaten track, but just a few miles from a well-populated neighborhood -- the mail carrier would save himself a trip. He'd load a package onto HorseFly and send it off on its own while he finished the neighborhood route. Package delivered, HorseFly would fly back, intercept the mail truck, land on the truck roof, recharge, and get ready to be reloaded for another dropoff.

    The Future of Package Delivery

    As you can see, this isn't a revolutionary solution to USPS's difficulties. One drone per truck, and that drone only carrying one package at a time on miles-long round trips, won't make a huge dent in the average postal carrier's workload. But it could save driving time, save on fuel costs, and save on wear-and-tear on the truck -- all big contributors to USPS's ongoing fiscal deficit.

    These benefits might intrigue USPS enough to at least give Workhorse a trial run, even if the big contract goes to one of Detroit's more established automakers. Crazy as drone delivery might sound for USPS, they've come up with crazier ideas before.

    Maybe this one will even work.

    Motley Fool contributor Rich Smith wonders: If the package requires a signature, does the drone hover while it waits for you to sign, or does it perch? He has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Amazon.com and Ford. Try any of our Foolish newsletter services free for 30 days. And click here to check out our free report for one great stock to buy for 2015 and beyond.

     

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    Yum Brands Restaurant Locations Ahead of Earnings Figures
    Luke Sharrett/Bloomberg via Getty Images
    There will be something different about a new Taco Bell that is set to open in Chicago's Wicker Park neighborhood this summer. Parent company Yum Brands (YUM) has confirmed that the eatery has applied for a liquor license, a move that would make it the first Taco Bell to serve up stronger beverages than Mountain Dew or packets of Sriracha.

    A look at the proposed menu shows where Taco Bell is heading. There will be a couple of draft beer options, but the more interesting nugget is what the chain is calling Twisted Freezers. They are essentially the chain's existing slushie-style beverages spiked with vodka, tequila or rum.

    This doesn't mean that folks will eventually be able to get their drink on at any Taco Bell. This is a unique situation in a location that requires standing out. However, if it is successful -- and that is certainly possible given the attraction of millennials to Taco Bell -- it wouldn't be a surprise if Yum Brands follows through at other locations.

    Getting the Last Laugh

    Taco Bell's move has raised more than a few eyebrows. Even Saturday Night Live got in on the fun during this past weekend's season finale.

    "It was reported that a Taco Bell in Chicago may soon start selling alcohol, which is weird because usually it's alcohol that sells Taco Bell," Michael Che said during the show's Weekend Update segment.

    Then again, having a new product offering skewered by Saturday Night Live can be a good thing. The show came down hard on Taco Bell when it rolled out Doritos Locos Tacos three years ago, suggesting that it's Taco Bell's way of saying, "We hate you!"

    Taco Bell has gone on to sell more than a billion of the tacos served on Doritos-dusted shells.

    Taking a Page Out of the Chipotle Playbook

    Fast food and stiff drinks don't traditionally go hand in hand, but Chipotle Mexican Grill (CMG) -- a chain that Taco Bell has tried to emulate in rolling out its Cantina and Fresco lines that up the ante on quality ingredients -- has been serving alcohol for years.

    Chipotle offers beers, and two years ago it began rolling out margaritas at more than half of its restaurants. The premium beverages are made with Patron silver tequila, triple sec, agave nectar, and fresh lime. They cost about as much as a Chipotle burrito.

    You don't see a lot of people getting buzzed at Chipotle. Customers tend to opt for cheaper sodas or water. However, just the fact that harder options are available helped reposition the brand.

    We will see what Taco Bell does with this. Unlike Chipotle, customers associate Taco Bell with cheap sustenance. A buck can go a long way at Taco Bell, and obviously the same pricing won't apply to hard beverages.

    Things could backfire. Lax cashiers might wind up serving alcohol to underage customers. Buzzed patrons could wreak havoc. There's a reason most fast-food chains avoid alcohol altogether. However, since casual-dining and fast-casual concepts specializing in Mexican food tend to have alcohol offerings, it's a risk that Yum Brands is willing to test out this one time. We'll see where it stands after the new Taco Bell is at it for a few weeks.

    Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Chipotle Mexican Grill. Try any of our Foolish newsletter services free for 30 days, and check out The Motley Fool's one great stock to buy for 2015 and beyond.

     

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    Ebola Patient In U.S. Traveled Through Dulles Airport En Route To Dallas From Liberia
    Mark Wilson/Getty Images
    By Mark Fahey

    Everyone knows that planning a last-minute vacation is expensive. But booking flights and hotels too far ahead of time can also cost you.

    The average hotel stay actually becomes cheaper as the day approaches. Even airfare, which jumps substantially in the two weeks before a flight, tends to be more expensive if purchased too many months in advance, according to new data from Adobe Digital Index.

    "The early bird doesn't necessarily get the worm in travel," said Tamara Gaffney, principle research analyst for Adobe Digital Index. "That's counter-intuitive in both hotels and flights."

    The study, which is based on over 15 billion visits to major U.S. travel and hotel sites between 2013 and 2015, points to the cheapest times to buy for the upcoming summer holidays. It's too late for Memorial Day, but some of the best Fourth of July buying is this weekend.

    Hotel prices are up 5 percent overall for the first four months of 2014, but savvy consumers can still find deals by buying in the right window. For both the average domestic and average international hotel, the best time to buy is about a month out, according to Adobe's data.

    Hotels know that if a customer is booking very early, they're interested in a particular location and don't need to be lured through the door with discounts. As it gets closer to the day of the booking, full hotels drop out of the market and other hotels will lower prices to fill vacancies.

    "Hotels try to capitalize on the supply and demand curve," said Gaffney. "It's way more pronounced when you look at major holidays, because those are the times they figure they're going to get full occupancy anyways, so they wait longer to push the prices down."

    The data indicate that when more bookings happen early, there is less price volatility. That may be why Memorial Day bookings, which tend to be more last-minute and opportunistic than other holidays, fluctuate more in price than other summer holidays, said Gaffney.

    For economy hotels ($120 or less a night), the biggest average discounts show up 40 days out. For more expensive hotels, you can get a slightly below-average rate 30 days out. The window can also shift for certain cities: For Las Vegas, Seattle or Boston, the best time to book is over 100 days out, but for New York and Honolulu the best time is around 30 days before the trip.

    The curve is less dramatic for flights. For domestic flights, the best time is 90 days before the trip, when travelers can save an average of 15 percent. Prices are higher if tickets are bought more than 150 days before a flight.

    Once again, it's way too late for Memorial Day -- the best time to buy was Jan. 30. But an average discount of 10 percent is still available this weekend for the Fourth of July, and July 21 is the best time to buy for a 17 percent discount on Labor Day tickets.

    As any last-minute traveler knows, prices for plane tickets shoot up in the 20 days before the flight. According to the Adobe data, prices increase 3 percent every day during that period, with the latest buyers paying 60 percent more than average. Still, one in three travelers wait to book until those last 20 days.

    "That's a lot of sub-optimal buying," said Gaffney. "Maybe they can't help it, but every single day costs you."

     

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    Financial Markets Wall Street
    Richard Drew/AP
    By Noel Randewich

    NEW YORK -- The S&P 500 closed at a record high Thursday after disappointing economic data bolstered expectations that an interest rate hike is likely to come only later in the year.

    Traders warned that below-average volume in recent sessions suggests that not all of Wall Street may be confident in the market's gains.

    It doesn't matter if we're at an all-time high if there are just two guys trading a stock back and forth.

    "It doesn't matter if we're at an all-time high if there are just two guys trading a stock back and forth," said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago. "It's something to be aware of."

    As the quarterly earnings reporting season draws to a close, volume on U.S. stock markets has been below the month-to-date average for several sessions.

    On Thursday, about 5.6 billion shares changed hands on U.S. exchanges, below the 6.3 billion average this month, according to BATS Global Markets.

    Data showed that jobless claims rose more than expected last week, although the underlying trend continued to point to a rapidly tightening labor market.

    Another report showed a surprise decline in home resales in April and persistent weakness in manufacturing in May.

    Federal Reserve officials have all but ruled out a rate hike next month. Investors now await Fed Chair Janet Yellen's speech Friday for new clues about when the central bank will begin raising interest rates for the first time since 2006.

    Small Gains

    The Standard & Poor's 500 index (^GSPC) gained 4.97 points, or 0.2 percent, to end at 2,130.82 points, barely beating its previous record close of 2,129.2 from Monday.

    The Dow Jones industrial average (^DJI) was essentially flat, rising 0.34 point at 18,285.74, and the Nasdaq composite (^IXIC) rose 19.05 points, or 0.4 percent, to 5,090.79, just short of its record close of 5,092.08 on April 24.

    Recent highs set by stock indexes have won little enthusiasm on trading floors, said Gordon Charlop, a managing director at Rosenblatt Securities in New York.

    "There is not an underlying sense of 'Hey we're ready to bust out,' " Charlop said. "It's not as if people are jumping up and down saying there's a robust economy that's generating tremendous employment."

    Seven of the 10 major S&P 500 sectors were higher, with the energy index rising 0.84 percent as oil prices rose for a second day.

    Salesforce.com (CRM), the subject of takeover speculation for the past few weeks, rose 3.92 percent to $72.91 after posting a profit for the first time in seven quarters.

    Advancing issues outnumbered declining ones on the NYSE by 1,684 to 1,355, for a 1.24-to-1 ratio on the upside; on the Nasdaq, 1,384 issues rose and 1,369 fell for a 1.01-to-1 ratio favoring advancers.

    The benchmark S&P 500 index posted 20 new 52-week highs and two new lows; the Nasdaq composite recorded 75 new highs and 48 new lows.

    What to watch Friday:
    • The Labor Department releases Consumer Price Index for April at 8:30 a.m. Eastern time.
    • Federal Reserve Chair Janet Yellen delivers a speech on the economic outlook in Providence, Rhode Island at 1 p.m.
    Earning Calendar
    These selected companies are scheduled to report quarterly financial results:
    • Ann Inc. (ANN)
    • Campbell Soup Co. (CPB)
    • Deere & Co. (DE)
    • Foot Locker (FL)

     

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    By Hal Bundrick

    Here's a disturbing question -- which lasts longer: the typical U.S. marriage or the average American car loan? According to The Economist, the average U.S. marriage lasts eight years. While six-year car loans are typical, eight year -- and even longer -- loans are growing in popularity. Experian says one-quarter of vehicle loan terms fell between 73 and 84 months last year, compared to just 11 percent of loans in 2008. So yes, car loans are beginning to give marriage a run for its money in the longevity department.

    The most common term on new or used vehicles is the 72-month loan, comprising about 40 percent of the credit market. That's a substantial shelf life longer than the 36-month loan that launched the automotive finance industry. But Melinda Zabritski, senior director of automotive credit at Experian Automotive, says extended-term loans are not necessarily a bad thing. "Consumers tend to be monthly payment buyers," she said. "To keep that payment low, ... spread that payment out over a longer period."

    Zabritski admits that you will pay more interest over the life of the loan, but she says consider the difference between the average rates on a typical loan amount at a 60-month term versus a 72-month loan: "You might only pay $500 or $600 more over the entire life of that loan but you'll save $50 or $75 a month. So the breakeven point comes pretty darn quick."

    But average car loans are up nearly $1,000 from one year ago, to $28,381 -- the highest on record, according to Experian. The typical interest rate on a new vehicle loan was 4.5 percent, as of the fourth quarter of 2014. Put those factors together and the average monthly payment for a new vehicle hit $482, another record high.

    Not only are vehicles more expensive, but consumer buying patterns have shifted, too. Entry-level crossover utility vehicles became the most-registered vehicle last year, followed by full-size pickup trucks, the usual top dog. During the recession, small economy cars were most sought-after by consumers though now, with the economy rebounding, Americans are upsizing again.

    What About That Loan?

    Zabritski says the most important factor to consider is: How long do you really plan to keep that car? Experian says the average length of initial ownership is 93 months -- almost eight years. Apparently we keep our cars about as long as our spouses. But when consumers put little or no money down and then keep a vehicle for just three years, it's easy to owe way more than the vehicle is worth when looking to trade.

    "The days of buying a new car every three to five years are gone," Mark Seng of IHS Automotive told CNBC in a recent interview. "With vehicles lasting longer and having more technology, buyers are clearly willing to own their cars six or seven years, often longer. The one risk for buyers taking out seven-year auto loans is the chance they'll be upside down and owe more than their vehicle is worth if they try to sell it before the loan is paid off."

    Edmunds, the automotive research firm, notes that the average trade-in age for a car in 2014 was six years. "It's not what you'd call an enduring relationship," Ronald Montoya, Edmunds consumer advice editor, wrote in a blog post. "If you have a 72-month loan and get the itch to buy a new car around the average six-year mark, you wouldn't have enjoyed any time without payments, which diminishes the point of car buying in the first place. At that point, you're better off leasing the car." And leasing is gaining popularity, accounting for nearly 30 percent of all new vehicles financed, according to Experian.

    Resale Value an Issue

    But Edmunds senior consumer advice editor Philip Reed notes another drawback to extended-term loans: resale or trade-in value.

    "As a car depreciates, there are times when it depreciates steeply and other times when it's fairly flat," he said. "And you would like to trade it in at the end of a flat period rather than in the middle of a steep decline." He admits that every car is different in the manner in which it retains its value, but there are certain benchmarks to be aware of. "I would say that once you get past the five-year mark, not only is it depreciating quickly but you are also probably exceeding 100,000 miles." While that may not trigger a great deal of additional depreciation, he says it is "certainly a psychological barrier for many car shoppers."

    If you're committed to long-term ownership and think an extended-term loan will work for you, Zabritski says it's important to shop rates and lenders before making a purchase. And remember, interest rates typically increase along with a loan term.

    "We always recommend for folks to go ahead and look at getting prequalified with their own banking institution -- credit union, bank or whatever -- so that when they go to the dealership they are armed with that information to know what's a good deal when it comes to obtaining a loan," she says.

    Hal M. Bundrick is a certified financial planner. Follow him on Twitter, @HalMBundrick.

     

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    Risk Just Ahead on Green Billboard.
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    By Joanne Cleaver

    "Risk" doesn't have to be a four-letter word. Yes, 2008's losses still sting. But here's how to start steering by looking out the windshield and finally giving up the rearview mirror.

    It's best to master the process of moving on, says Lauren Cohen, professor of finance at Harvard Business School. "There will be another downturn -- hopefully, less painful," he says. Market downturns are so hard to shake off, he says, because human psychology puts greater weight on losses than commensurate gains. In other words, you feel worse about losing $1 than you feel happy about gaining $1. It's hard to lead with your head and ignore your gut, but that's what it takes to get over steep losses, according to Cohen and other advisers who study risk.

    Learn From Your Mistakes

    First, learn from your mistakes, Cohen says. During the Great Recession, if you bailed out at the trough in 2009, you probably suffered the worst losses. Next time, hang tight. "Risk is not a one-year downturn. Retirement is a 10- to 40-year goal, so you have to think of your investment risk over that period," Cohen says. "Match your investments with the goal. The goal is to have accumulated enough by the time you retire, not right now."

    Take a hard look at how much you can stand to lose before you make any plans to invest your money, recommends Samuel K. Won, founder and managing director of Global Risk Management Advisors, an investment risk management advisory firm to institutional investors and asset managers.

    "If there was a market downturn, and there will be, are you comfortable with, and can you afford to lose, 20 percent of your portfolio?" he asks. Before you make asset allocation decisions, figure out how much you can afford to lose. That should be one of the first considerations an investor takes into account before making any changes to an investment portfolio, he says.

    Most people, of course, must take on a minimum amount of risk to keep at least part of their portfolio growing to generate enough income to keep up with their needs as they age.

    Separate Your Portfolio

    Separate your portfolio into two sections: a lower-risk portion that is associated with a minimal return that enables you to retire with commensurately lower risk, and an upper-risk portion that is associated with the maximum level of risk that you can tolerate and will drive growth. This design will position you so that you "don't lose so much that you are taking 10 steps backwards when the next major market downturn emerges," Won says. Currently, bonds do not yield much, but you won't lose anything, either.

    It's important to remember that making up losses will be hard because you will be rebuilding from a smaller base. In other words, if you lose 30 percent of $10, the $7 you have left will have to increase by 43 percent to restore the account to $10.

    Ted Fischer, president of Fischer Investment Strategies, a financial planning firm in Westlake Village, California, has clients create "buckets" for risk: short-term savings with low risk (as for a house down payment); longer-term savings for growth; and longer-term savings with less risk. "If you show clients that the short-term bucket didn't see much loss because they were in low-risk [investments], then people feel confident that they will hit their short-term goals, while still having risk runway to achieve their long-term goals," he says.

    Won points out that due to the financial crisis of 2008, many rules and regulations have tightened risk parameters in the investment industry. "Lots of asset managers are being forced to do much more formal and enhanced risk management to cover their fiduciary risks, and individuals should also be doing the same," he says.

    Assess Your Risk Profile

    When you are working with a financial adviser or registered investment adviser, consider getting a second opinion on the risk profile of your portfolio, Won adds. Your goal is to make sure the amount of risk your adviser recommends isn't affected by how he or she is paid for working with you, either by fees or commissions. Also take a cue from institutional money managers and conduct annual risk checkups to make sure your portfolio is still within your risk tolerance level, and see how your portfolio is performing compared with several types of benchmarks -- such as stock and bond indexes -- so you can gain context for how much you are gaining for the risk you are taking.

    One way to gain insight is by looking at Morningstar's risk ratings for various mutual funds. "Look at the fund's volatility -- how much has it gone up or down? No, the past doesn't guarantee the future, but it does show volatility," Won says.

    If all this sounds too theoretical, try translating some of the what-if-the-market-crashes scenarios into real-life implications, Fischer says. "If your portfolio lost 14 percent or 20 percent, what would that mean for when you retired and with how much?" he says. Balance that with this truth: "It's hard to rebuild if you aren't willing to take the risk," Fischer says.

     

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    Getty Images
    By Gerri Detweiler

    The vacation you've saved and planned for is finally here, and you're ready to relax -- which is why it's especially bad that identity thieves are ready to go to work. They know that chances are your guard is down, at least a little, making it a perfect time for them to take advantage of that opportunity.
    Here are some very real ways you might be putting your identity at risk when you're on vacation:

    1. Telling Too Many People

    By this we mean -- at the very least -- Facebook. How many "friends" do you have? And how many do they have? Those check-ins from the airport? Pictures from the cruise? A potential identity thief knows you're not at home. Identity thieves might even know when your plane lands and how long it will be before you come home if they happen to be friends with a friend of a friend of a friend.

    2. Not Telling Enough People

    While broadcasting your absence from home isn't wise, neither is failing to alert the post office or your credit card issuers that you will be away. Some credit card issuers will view activity in another area or country or geographic area and shut down your card -- and that's the last thing you want on vacation. And preapproved credit card offers or card statements isn't something you'd like for someone to be able to simply lift from your unattended mailbox.

    3. Using Insecure Public Wi-Fi Networks

    Whether you're checking email or (we hope not) uploading photos for Facebook, it's easy to let your excitement get the better of you and forget about basic precautions when using public Wi-Fi. Worse, as long as you're connected, you may be tempted to check credit card activity or the balance in your checking account. If the network you're on isn't secure, you could be taking a big, big risk.

    4. Losing Your Mobile Device

    You probably just intended to put it down for a second. Your regular routines that keep things from disappearing have been abandoned and ... maybe it's in the pocket of a jacket that's at your hotel, or do you think perhaps it slipped under the seat of the rental car you turned in yesterday? Losing a device is bad enough. Losing a device that contains an identity thief's jackpot -- email, social media, banking apps, contact lists, photos, etc. -- is much worse. And the worst of all possible worlds? Losing a device that's not password-protected and has your open email accounts available for perusal by anyone who picks it up.

    5. Being Careless With Sensitive Information

    You don't have to have a security clearance to deal daily with sensitive information, and it's easy to leave it lying around. Taking a cruise or staying in a hotel? You may think you don't have sensitive information in your cabin or room if your credit card is with you, but your itineraries, rental car contracts and hotel bills all contain personal data. If someone calls you telling you that you need to pay a bill, don't assume it's legitimate. Either make the call to that company yourself or pay in person. And remember -- just because a person is wearing a uniform doesn't necessarily mean they are an employee. Exercise caution. If you are using your own car for vacation, be sure you remove registration paperwork and other personal data from the glovebox before valet parking. Overkill? Perhaps, but it's simpler to do that than to untangle an identity theft mess.

    6. Credit Card Missteps

    Skimmers at gas stations continue to be a problem, and tourist spots are a favorite target. Carrying every credit card you have can be a mistake as well. There's nothing wrong with matching rewards to spending to maximize what you can get, but be careful with those cards. Consider setting mobile alerts for every single card transaction while you are away. That password-protected phone you are not going to lose can be your friend. Finally, be sure that you have copies of credit cards you bring (front and back). You can take a picture and store that information in a (password protected) file, so in the event the physical card is stolen, you have all the information you need to contact your issuer. You could consider bringing a card you plan to use, along with a backup should anything happen to it. Keep these in different places so that if you lose one, you do not necessarily lose the other. Here's what you really, really don't want: for someone to snatch your wallet, which contains all your credit cards, plus the paper where you dutifully recorded all the card numbers and issuer phone numbers. Keep things separate.

    7. Not Being Super-Careful With Your Debit Card

    A debit card, particularly a prepaid one, can help you stick with a budget because you can't spend more than is loaded on the card. It can ensure that you will resist the temptation to spend more than you planned and that you won't receive a bigger-than-you-remembered bill after you return home. But debit cards take the money out almost instantaneously, and if a thief gets a hold of the number they can drain the balance. If you are counting on those funds to pay for your travel expenses you could find yourself in a bind. So if you anticipate being in a transaction situation in which the card will be out of your possession, you might want to consider using cash or a credit card. Of all the cards in your wallet, a debit card is one you need to monitor extra carefully.

    Keep an eye on your accounts to look for unauthorized expenses. It's also helpful to check your credit reports and credit scores regularly -- if someone were to, say, max out a credit card without your knowledge -- it could negatively impact your credit score. You can keep an eye on your credit by seeing your free credit report summary, which is updated every month on Credit.com. Remember: Do all of this from a secure Internet connection. With a little planning, you can minimize the risk that your vacation memories will be tainted by having to clean up a mess made by identity thieves.

    Gerri Detweiler is Credit.com's director of consumer education.

     

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