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Few restaurant chains seem to convey retro charm the way that Cracker Barrel Old Country Store (CBRL) does. It's a blast from the past, with rocking chairs swaying on the front porch, general stores selling old-school trinkets and treats and a menu loaded with comfort foods from the South.
Stepping into one of the chain's 634 restaurants can feel like falling into a time capsule, as kids buy peppermint sticks by the retail store register and dining guests play wooden triangle peg games as they wait for their food to arrive.
Everything about Cracker Barrel seems to convey old-fashioned themes and that's apparently just fine for today's consumers. The restaurant and country-store operator posted blowout quarterly results last week, with strong performance at both its dining and retail businesses.
Back to the Future
Revenue climbed 6.3 percent during its fiscal third quarter compared to the same springtime period a year earlier. The uptick was the combination of a 5.2 percent increase in comparable restaurant sales, a 4.5 percent uptick in comparable retail sales and the continuing expansion of the concept itself.
There aren't too many table-service eateries posting that kind of year-over-year growth and things have been even hairier for traditional retailers. Cracker Barrel credits the strength to springtime weekday lunch promotions and the success of its Wholesome Fixin's menu, which features various entrees that pack fewer than 600 calories apiece.
The Wholesome Fixin's menu is a departure from the decadent comfort-food fare that many associate with the Cracker Barrel experience, but it's been able to make it work with items including pecan-crusted catfish and an oven-baked "fried" chicken.
This doesn't mean that Cracker Barrel is keeping a strict calorie count to every menu decision. Discussing the new summer menu additions during the call, Cracker Barrel singled out a strawberries-and-cream French toast breakfast entree and a slow-roasted rib platter that aren't going to woo too many health nuts.
On the retail front, Cracker Barrel credits its success to strong sales in women's apparel, candles and accessories. It continues to focus on merchandise with multigenerational appeal, leading it to turn to embroidered apparel, fedora hats and nautical-themed wares for the summer.
Marketing the Mood
Cracker Barrel doesn't spend a lot of money on TV advertising. It prefers the "always on" nature of billboards, and that makes sense when one considers that the chain strategically places its restaurants on major highway exits and well-traveled intersections. Most casual-dining chains live and die on the flow of locals, but Cracker Barrel's appeal is also strong to travelers passing through. There aren't too many casual-dining chains that reserve the back of their lots for RV and truck parking.
Add it all up and it's working. This doesn't mean that you can't teach an old food company some new media tricks. Cracker Barrel also credits its success to its digital advertising efforts and its music program. One way that the chain combined the two earlier this year was with the Country Checkers Challenge, offering an online checkers contest that culminated in finalists using real-life checker pieces including country music stars Kellie Pickler and Thomas Rhett during the annual Academy of Country Music awards show.
Cracker Barrel isn't perfect. It has courted controversy over the years for everything from alleged discriminatory practices to siding with notorious celebrities. However, consumers seem to like the combination of retro charm, value pricing and Southern staples. It's working at a time when many of its casual-dining peers are battling operational indigestion.
Motley Fool contributor Rick Munarriz owns shares of Cracker Barrel Old Country Store. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. Looking for a winner for your portfolio? Check out The Motley Fool's one great stock to buy for 2015 and beyond.
NEW YORK -- U.S. stocks fell Friday as Greek debt talks hit a stalemate and as concern over how soon the Federal Reserve might raise interest rates kept investors cautious.
Energy shares dropped as oil prices fell for a second straight day. The energy index, down 1.2 percent, led the day's decline, followed by a 1.1 percent drop in the healthcare index.
Upbeat consumer sentiment and other data added to views the economy may be regaining momentum, which increased anxiety for investors ahead of next week's Federal Open Market Committee meeting, the U.S. central bank's last meeting before September.
Also of concern, a day after the International Monetary Fund quit bailout talks with Greece, EU officials said they had held their first formal discussions on the worst-case scenario for the country.
"It's the Greek situation again, and that's been played out on a day-to-day basis, where you had a huge rally followed by a decline, predicated on whether they are coming closer or moving further from a resolution over this situation," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
The Dow Jones industrial average (^DJI) fell 140.53 points, or 0.8 percent, to 17,898.84, the Standard & Poor's 500 index (^GSPC) lost 14.75 points, or 0.7 percent, to 2,094.11 and the Nasdaq composite (^IXIC) dropped 31.41 points, or 0.6 percent, to 5,051.10.
For the week, the Dow was up 0.3 percent, the S&P 500 was up 0.1 percent, while the Nasdaq composite fell 0.3 percent, its third straight week of declines.
Consumers More Upbeat
U.S. consumer confidence surged in early June. The University of Michigan's consumer sentiment index rose to 94.6 from 90.7 in May.
The upbeat report capped a week of strong economic data and was the latest indication that growth was regaining momentum after a sluggish start to the second quarter.
That added to investor caution, "particularly in light of the fact that we're just days ahead of the Fed meeting," Luschini said.
Higher rates will tighten the flow of easy money. Economists and top Wall Street banks expect the Fed to raise rates in September, in what could be its first hike in almost a decade.
Among the biggest decliners in health care, shares of Eli Lilly (LLY) ended down 2.7 percent at $84.21. It hit its low for the session and volume spiked after Reuters reported the Alzheimer's Association may not offer an early look at trial data on an experimental drug from Eli Lilly.
News of the impending release had led to a jump in the company's shares. Eli Lilly's stock had gained 10.3 percent from Monday's close to Thursday's finish.
Declining issues outnumbered advancing ones on the NYSE by 1,945 to 1,075, for a 1.81-to-1 ratio on the downside; on the Nasdaq, 1,586 issues fell and 1,146 advanced for a 1.38-to-1 ratio favoring decliners.
The benchmark S&P 500 index posted five new 52-week highs and eight new lows; the Nasdaq composite recorded 73 new highs and 28 new lows.
About five billion shares changed hands on U.S. exchanges, compared with the 6.1 billion daily average for the month to date, according to data from BATS Global Markets.
What to watch Monday:
The Federal Reserve Bank of New York releases its survey of manufacturing conditions in New York state for June at 8:30 a.m. Eastern time.
The Federal Reserve releases industrial production for May at 9:15 a.m.
The National Association of Home Builders releases its housing market index for June at 10 a.m.
Products with ridiculously high markups exist because somebody, somewhere, is willing to pay that price. Whether it's because of convenience, perceived value or simple ignorance, is up for debate. The good news is that with a little forethought, most of these markups can be avoided, or at the very least lessened. Here are nine of the biggest, along with some common sense solutions and workarounds.
1. Bottled Water. If you're buying designer bottled water brands like AquaDeco or Fine, you're getting nailed by an unbelievable 280,000 percent markup. Although, if you're reading Wise Bread, I'm guessing you probably don't buy designer brand water. But you probably do buy bottled water from the grocery store or warehouse club on occasion, in which case you're paying a 4,000 percent markup compared to tap water.
Solution: Buy a Brita water filter pitcher and filter your tap water from home. You can then take the filtered water with you when you're on-the-go by using a reusable BPA-free water bottle.
2. Pre-Cut Vegetables/Fruit. Veggies and fruit that are cut up and ready to go are definitely convenient, especially for busy families. But did you know that you're easily paying a hefty 40 percent markup on the pre-cut varieties?
Solution: Shop your local farmer's market and grocery store for deals on fresh vegetables and fruit. Solve the convenience aspect by cutting them all up at once and store them in Ziploc bags. This is a great way to save money and have healthy snacks ready to go for school lunches and quickly-thrown-together family meals.
3. College Textbooks. According to CollegeData, the average student spent over $1,000 on textbooks and supplies for the 2014-15 school year with markups hovering around 200 percent for brand new textbooks.
Solution: If you plan on reselling your textbooks at the end of the semester, you should consider renting, instead of buying, from websites like Chegg an TextbookRentals. Also, if you plan on buying them, always ask for used textbooks at the college bookstore, or buy them in gently used condition from websites like AbeBooks.com and Half.com. (See also: 20 Places to Buy or Rent Textbooks)
4. Designer Handbags. The average name brand handbag carries a markup of well over 100 percent. Brands such as Coach, Dooney & Bourke, Kate Spade and Michael Kors have built a luxury brand reputation based solely on consumer perception.
Solution: Always buy handbags on sale. Because of the 100 percent markup, you'll often see 50 percent off sales on handbags at department stores. Also, shop at discount stores such as T.J. Maxx and Marshalls for name brand handbags at heavily discounted prices. You might not find Coach or Louis Vuitton, but you'll still find very high quality brands at good prices.
5. Designer Jeans. According to The Wall Street Journal, designer jeans often come with a markup in the 260 percent range. For example, the fact that someone would spend $208 on a pair of jeans from 7ForAllMankind, tells me that for some people, being fashionable at any price is the number one priority when it comes to covering your legs with denim.
Solution: Shop discount clothing stores and thrift shops for denim. On several occasions I have found designer denim on the rack at thrift stores for pennies on the dollar. Sure, they were a little worn, but most of the designer jeans bought brand new are quite worn, or even have holes in them. Some even have paint all over them like these $575 jeans from Neiman Marcus.
6. Prescription Drugs. Prescription drugs can be incredibly expensive, especially if you have sub-par health insurance and get stuck footing most of the bill. According to AHIP Coverage, the price markup on prescription drugs is at a whopping 443 percent.
Solution: Ask for free samples while at the doctor's office. A few years ago I was prescribed Lamisil, an expensive prescription drug, which at the time cost $30 a pill and had no generic equivalents. On a whim, I asked the nurse on the way out of the office it they had any free samples. She went and looked and returned with a bag full of Lamisil samples. She told me to come back when I ran out as she didn't have enough for a full treatment plan. Simply by politely asking she saved me over $500 on prescription drug costs.
Also, when approaching the pharmacy window, always ask about generic alternatives to your prescription. Often times the doctor will unknowingly prescribe the name brand drug, and by switching to the generic, you can save significant money.
7. Eyeglass Frames. Eyeglass frames have a ridiculously high markup in the 500 percent range. I recently discovered this when I needed a new pair of glasses and decided to buy them directly from the optometrist as my vision insurance was going to pay for them. But after looking through my choices, and the hefty price tags, I quickly realized that you'd be crazy to buy directly from the doctor if you have little or poor insurance. The frames I eventually chose were close to $350, and after doing some research, I could have gotten them online for $125.
Solution: To avoid the markup as much as possible, always shop eyeglass frames and lenses online as well as warehouse clubs including Costco and BJ's Wholesale.
8. Coffee and Tea. When you hit the Starbucks or local coffee shop, know that you're getting hit by a 250 to 400 percent markup. Sure it's a nice treat from time to time, but visiting everyday can really be a budget buster.
Solution: Start brewing at home and take your morning cup of joe with you.
9. Furniture. According to CBS Money Watch, most furniture stores markup their prices about 80 percent. This is especially true at boutique shops and high-end department stores like Macy's and Nordstrom.
Solution: Because of the high markups you should always try to negotiate a deal, even if the price is already discounted, as the majority of furniture stores have plenty of room to come down in price and still make a profit. This is especially true if you're paying with cash as the store won't have to pay credit card fees.
By knowing what products have the highest markups, you can learn to avoid them whenever possible. Sure, you'll get stuck buying a $5 bottle of water on occasion, or splurge on a $4 cup of coffee, but by developing smart long-term spending habits you can really save significant money. Money that can serve you much better by paying down debt, building that emergency fund, or saving for retirement.
What product markups drive you crazy and how do you avoid them?
Most financial planners have no interest in working with millennial clients, according to a recent survey by Corporate Insight, a consulting firm. The survey of 500 advisers found just 30 percent are attempting to gain clients under age 40.
The reason: millennials for the most part don't have any money. And financial planners make their living by advising wealthy clients.
But millennials aren't exactly keen on financial planners, either. Here's why:
1. The Financial Industry's Reputation
Millennials are a skeptical bunch in general, but no industry has felt their collective distrust as heavily as the financial services sector. In the aftermath of the Great Recession, movements such as Occupy Wall Street and Bank Transfer Day made it clear Generation Y has little faith in the people who manage our nation's money.
"Millennials have watched their parents' retirement take a major hit, so it becomes harder for them to see the value in traditional financial planning," said Aaron Hatch, a certified financial planner and co-founder of Woven Capital. "It's understandable that millennials don't trust financial planners because frankly, they haven't served them well."
Andrew Wang, senior vice president of Runnymede Capital Management, said millennials value transparency from the people and companies they interact with. "Traditional financial services companies on the whole are not delivering on those things," he said.
2. Confusing Jargon
Although varying levels of skepticism have caused a disconnect between millennials and financial planners, education surrounding the industry is another major divider. "The industry is very confusing to consumers with the ubiquitous title 'financial adviser,' " Wang said, "which actually includes a very diverse group of professionals such as brokers, financial planners, insurance agents, investment managers and bankers -- each paid differently."
Some millennials who would be excellent candidates for financial planning services never take advantage because they don't understand what it entails, the benefits of hiring a financial professional or even what type of professional they need.
3. Financial Planning Fees
Then there's the matter of payment. Young adults also tend not to work with traditional financial planners for the same reason these advisers dismiss them: money (or lack thereof).
Stephanie Genkin, an independent fee-only financial adviser who teaches personal finance classes popular with millennials, said the problem is the traditional fee structure of the industry. "Most financial planners earn their living from assets under management and charge a percentage of their clients' investments." She noted that clients with smaller portfolios are typically charged a higher percentage to compensate. "This works against millennials who are at the early stages of building an investment portfolio."
4. Cultural Differences
Diversity isn't a word often associated with the financial services industry. While there are financial planners of all nationalities, genders and backgrounds, a good portion are old, white men. InvestmentNews says 76 percent of financial planners are male. Just 8 percent belong to a minority group. That doesn't discredit these advisers by any means, but it does make it that much more difficult for today's 20-somethings to find any kind of connection.
Age alone plays a major role in millennials' unwillingness to work with financial planners. "There are more CFPs over age 70 than under 30," noted Andrew Mohrmann, a certified financial planner and founder of Modern Dollar Planning. "This generational gap means that most planners simply can't relate. Try discussing the dating challenges of Tinder and Match.com with a 70-year-old!"
5. Financial Planning Information Is Free Online
As the first wave of digital natives, millennials are an incredibly resourceful generation who would rather seek information for themselves than be told what is true. Therefore, Gen Y is more apt to gain financial knowledge and insight from sources outside of formal planners.
"Many turn to the Internet, close friends and family for advice and help gaining entry to the market," said Alison Novak, professor in media studies and production at Temple University. "This type of independence from formal financial organizations helps them assert independence from the financial sector."
Financial Planning for Millennials Can Work
Despite all of the challenges preventing millennials from working with financial planners, there are plenty of reasons why younger generations should pursue professional assistance with their finances. Fortunately, leaders in the modern financial planning industry are making that possible by changing the old business model.
"There are now hourly and subscription-based financial planning models that can allow planners to work with people that haven't accumulated a big portfolio that needs managing," explained Eric Nicewarner, a certified financial planner. "It also allows those people access to the other benefits a planner can provide, like debt reduction strategies, saving and budgeting techniques and insurance planning."
And for the Internet-averse millennial crowd (yes, they do exist), working with a traditional financial planner still has its advantages. "Millennials who are interested in working with a financial planner should seek out a credentialed planner who charges an hourly rate," said Genkin." Millennials would benefit from an initial series of meetings and then annual or semiannual checkups, unless their situation changes, such as a new job, new business venture, home purchase, marriage or a baby."
Despite all the reasons millennials and financial planners have to avoid working together, those reasons are largely based on assumptions. The best thing a person in need of counsel can do, regardless of age, is schedule time with a financial planner and talk. Most planners offer free consultations; the worst thing that can happen is you waste an hour, but you could end up gaining invaluable insight from a pro.
If you were offered the choice to go to Paris next week or -- for the same amount of money -- take a whirlwind tour of 10 European countries 10 years from now, which would you choose?
The future getaway is the better and likely more fulfilling deal -- but few of us would be able to resist the draw of strolling along the Seine seven days from now.
Unfortunately, that inability to delay gratification is what's keeping many of us from building up a healthy nest egg.
Since retirement doesn't feel like an urgent need, people find excuses to put it off, and instead use the money for something they want right now.
According to an April survey of higher income households by SunTrust, 44 percent of people say that current lifestyle spending on things like dining out and entertainment prevents them from saving for the future. Among millennials, it jumps to 71 percent.
"A large portion of my clients struggle with planning an event that's often at least 30 years away," explains Jeff Maas, a certified financial planner and co-founder of Retirement Security Centers. "Since retirement doesn't feel like an urgent need, people find excuses to put it off, and instead use the money for something they want right now."
Of course, it doesn't help that we're programmed to be highly driven by the amygdala, the emotional part of the brain that seeks pleasure and controls short-term decision making, says Brad Klontz, a certified financial planner and managing partner at Occidental Asset Management.
And let's not forget that we live in a pervasive "get it now" world. "Social media has created a culture that's incredibly focused on instantaneous satisfaction," Maas explains. "I joke that we even tap the microwave [impatiently] while making popcorn because it takes too long."
So if we've got biological and societal influences working against us, how can we focus on saving for a far-off, nebulous retirement?
This strategy involves creating an investment plan with your retirement dreams in mind, rather than chasing a specific return. By focusing on what you're saving for, you're helping retirement feel like more than a large (and often intimidating) number to reach -- thus making it harder to ignore.
"Very organized people -- who have color-coded sock drawers and check the air in their tires every month -- probably don't need that extra nudge to get on a pragmatic savings plan," Maas says. "But most of us just get in the car and drive until there's a problem. We defer [saving], saying we'll do it next year -- but we need a dose of reality to force us to take action. We need to feel the urge to save."
How to Get Your Goals-Based Saving Strategy Going
One of the biggest reasons people have a hard time socking away money is that they don't identify with the wrinklier, grayer version of themselves kicking back on the beach. But once the connection is made, better savings habits just might follow.
Case in point: One well-known Journal of Marketing Research study asked people to allocate money across several financial goals -- including retirement -- after viewing avatars of themselves. Some saw representations of how they looked at that time, while others were presented with digitally aged versions of themselves.
Those who saw their future selves put more than twice as much money toward retirement -- and goals-based investing helps achieve a similar effect by making retirement more tangible and personal.
"When I'm working with a client, the first thing I do is have them envision their life in retirement and define what is and isn't important to them," Maas says. "This gets people excited about their future."
So take a cue from the Beatles song "When I'm Sixty-Four" and start envisioning some details -- like a life filled with Sunday morning drives, gardening, grandchildren and a cottage rental in the Isle of Wight.
It may seem humorous, but painting images like these can help you figure out what may be important to you in two or three decades -- and get that pesky amygdala on board. And the more you can describe who you're with and what you see, hear and feel, the better.
"This practice actually changes your biochemistry by increasing levels of [the happiness-inducing neurotransmitter] serotonin," Klontz explains. "And if you evoke a very vivid image, your brain can't tell the difference between it happening in the present or the future -- and will react accordingly."
Sort your goals into three categories: most important, moderately important and least important. This will help you determine what's a retirement need-to-have versus a nice-to-have.
In other words, your brain will be jonesing to stash more in your 401(k) because it will be so psyched about your golf trips.
He suggests writing down your retirement objectives while asking yourself these questions: What do you care about? What are your goals and values? What matters most to you? This could result in a list with items as general as wanting to help pay for your grandkids' college or as specific as buying a $450,000 second home in Aspen.
Next, he says, you need to uncover your retirement blind spots.
Benartzi's research found that the most commonly shared retirement goals tend to fall into 12 categories: financial independence, health care, housing, travel and leisure, lifestyle, a second career, self-improvement, family bequests, giving back, social engagement, ending life with dignity and maintaining a sense of control.
After reviewing your list, are there any goals you may have overlooked? If so, add them to the list.
Finally, sort your goals into three categories: most important, moderately important and least important, using the assumption that you have limited resources to allocate to each of the goals. This will help you determine what's a retirement need-to-have versus a nice-to-have.
Now that you've got your goals in place, your next question is likely to be: What does this mean for my portfolio?
Here are some important considerations to keep in mind when viewing your retirement strategy through goals-colored glasses.
1. Your target retirement number may need to shift. One general rule of thumb is to strive for a nest egg that can replace about 85 percent of your annual income in retirement. Goals-based saving can help you have a clearer picture of your retired lifestyle, so you can decide whether you can live on less -- or may need to save more.
"If you want to take two big-budget trips every year, you may need to save very differently from someone who plans to retire in a little cabin in the forest," Maas says.
So once you have a handle on how much you may need to cover day-to-day costs and essentials, tack on cost estimates for your various retirement dreams, making sure to account for inflation. If a first-class vacation to Europe costs $10,000 today, in 30 years that would come out to more than $24,000, assuming a 3 percent inflation rate.
If those price tags seem daunting, keep in mind that your golden years likely won't be all get-up-and-go.
"The first 10 years of retirement, from ages 65 to 75, may be considered the 'go-go years,' when you still have plenty of energy to pursue your goals," Maas says. "Ages 75 to 85 are the 'slow-go years,' when people tend to focus on family -- and 85 and onward are considered the 'no-go years,' when you typically stick close to home."
If you want to take the whole family on a cruise one year into retirement, you may decide to take a more conservative approach to your portfolio than if you planned the trip 20 years into retirement.
And make sure to include one-time goal-related costs. Maas, for instance, had a pair of clients who wanted to open a hardware store in retirement, so they had to factor those start-up costs into their retirement number.
2. Your goals could impact your risk tolerance. Although risk tolerance is often thought of as an investing "personality trait" that's hard to change, looking at your investments through the lens of a goal could make you more or less inclined to take on risk -- especially as you get closer to your retirement date.
For instance, if you want to take the whole family on a cruise one year into retirement, you may decide to take a more conservative approach to your portfolio than if you planned the same trip 20 years into retirement, says Maas.
Likewise, how much flexibility you have for the goal itself may also figure into your portfolio moves.
Let's say you've set aside $10,000 of your retirement savings toward a one-month trip five years into retirement. With a more aggressive investment approach, you may end up with enough to splurge on a more expensive dream spot -- but if a less prime locale would suffice, you could take a more conservative approach to saving.
"In the end, you enjoy a month-long vacation regardless -- but the desire to take on additional risk for a potential additional reward might impact your investment strategy," says Maas.
3. Your goals can change and you may need to rebalance. What's important to you now may shift in response to changes in your life, which is why Maas suggests revisiting your goals once or twice a year to determine if you need to rebalance.
Maybe your son just had another kid, so you want to help with future college costs. Or perhaps, on second thought, downsizing your home is more appealing than staying in your current one.
Of course, some of your goals could be met through avenues besides your nest egg.
Maas, for instance, works with a wealthy client who grew up poor and, because of that experience, wants to make sure both of his kids will inherit $2 million. But bequeathing them cash isn't the only option he has to achieve that goal -- there are also life insurance policies, leaving them property or giving them investments.
The bottom line? With a goals-based strategy, as your present life evolves and your dreams get clearer, it can help you better plan for that future you.
Getty ImagesEarning a lot of money doesn't make you wealthy, but these strategies do.By Kimberly Palmer
Several years ago, New York Times Wealth Matters columnist Paul Sullivan opened up his finances to a group of high-powered, high-net worth investors known as Tiger 21. Members gather regularly to discuss investing strategies and at one meeting, Sullivan asked them to critique his own -- relatively meager by their standards -- financial life.
"Given what I do, I thought [my wife and I] had a handle on it, but what I learned from that meeting is that we hadn't thought enough about the risks in life," Sullivan says. Those risks include declining incomes and the unexpected death or disability of a household wage earner. As a result of that meeting, Sullivan and his wife took out life and disability insurance policies and sold off a condo in Florida that had been a vacation home for the family.
"They were so direct and harsh about that being a possible drain, if we weren't able to sell it if something bad happened. That was a wake-up call," Sullivan says.
The lessons he absorbed from that wealthy, exclusive group of over 300 members across the U.S. and Canada led Sullivan to write his new book, "The Thin Green Line: The Money Secrets of the Super Wealthy." The title refers to the security that can come from knowing you're prepared for a negative event, like a layoff, no matter how much money you have or earn. "The people in the book who I call wealthy, whether they're a teacher or a hedge fund manager, are wealthy because they have security. They have behaviors around money that let them be in control of their lives when something bad happens," he says.
Those behaviors, Sullivan says, can be learned or even adopted later in life. As someone who grew up without much money, he says it took him a long time to have a healthy relationship with it. He would avoid credit card debt and overspending so assiduously that he often wore threadbare clothing and skipped even affordable purchases he would have enjoyed. "You should be able to spend money on things you enjoy. If you love $4 Starbucks lattes, then buy it," he says.
If you're looking to adopt some secrets of the wealthy, Sullivan suggests the following strategies:
1. Focus on the things you can control, not what you wish you did in the past. "Too many normal Americans think, 'I wish I bought Apple stock 15 years ago' -- that's the wrong way to think. You can't control that," he says. But you can control how much money you save each month. So instead of fretting over specific stock picks, just put your money into a broadly diversified portfolio and forget about it while it grows slowly over time.
2. Load up on insurance. Term life insurance is very cheap, Sullivan points out. While there is a low probability of a family breadwinner dying early, it would be disastrous if that were to occur. Sullivan suggests asking, "How many years will the surviving spouse need to get back on his or her feet?" Paying around $400 to $500 a year for a basic policy can help alleviate that risk.
3. Don't worry so much about taxes. "People waste a lot of time obsessing about taxes," Sullivan notes. Instead, he recommends sitting down with an accountant to figure out your tax rate -- and then accept it.
4. Find a fee-only financial adviser. "A bad adviser is worse than no adviser, so find an adviser who is really going to act in your best interesting," Sullivan says. Fee-only advisers are obligated to work in clients' best interest and aren't paid based on products they sell to clients.
5. Get your 401(k) benefit. Take advantage of any 401(k) plan your workplace offers, Sullivan says. If you put in even a small percentage of your paycheck each month and your employer matches it, you'll slowly build a nest egg for retirement.
6. Spend on what makes you happy. After the Tiger 21 meeting, Sullivan says he became mindful of the purchases that brought him joy. "What I really like is to go out to dinner and have a nice bottle of wine once or twice a month," Sullivan says, so that is what he and his wife do.
At the end of the day, Sullivan says, it's not earning a lot of money that makes you wealthy. "There are people on the wrong side [of the thin green line] at the top of their earning potential," he says. Even from where he sat at a tennis club near his home in Connecticut during the interview, he says, "there are people all around me who are in the process of making horrendous decisions every day. They have too many cars, giant homes. But it's a house of cards. If the bonus doesn't come in, they could be in a lot of trouble when they shouldn't."
In fact, he says, one of the wealthiest people he knows is his aunt, a retired schoolteacher who lives in Western Massachusetts. "She has a pension, some investments and she gets to do everything she wants. She volunteers at a church, spends time with her grandkids and goes on one big vacation a year," he says. You're truly wealthy, he adds, when you have enough money to do all the things you want to do.
Eric Risberg/AP
Uber has turned the taxi business on its head since being founded in 2009, but that's far from the last industry the company intends to interrupt. It has quietly been testing product delivery services in cities like New York and Washington, D.C., over the past few months, delivering everything from handbags to toilet paper.
The move could make it easier to shop online and get quick delivery of products, and it might also make Uber an indispensable app for millions of people around the world.
Location-Based Shopping
Uber has tested two concepts in the past year, one called Corner Store and the other called Uber Essentials. The latter was a Washington, D.C., test that offered "the everyday items you need in 10 minutes or less." Apparently that includes things like a folding snow shovel ($20), an Uber branded umbrella ($15), DayQuil Cold & Flu ($10 for a 16-count pack), and Charmin Ultra Strong Toilet Paper double roll ($4 for four rolls). Uber didn't announce any statistics indicating whether Uber Essentials performed as well as planned or not, but executives did say "the more you love it, the more likely it will last," and since it was shut down after about a year of operation, it likely wasn't a big hit among customers.
Uber Essentials was just the beginning of Uber's merchant plans, though. The company recently launched UberRush, a rush ordering service in New York. Order an item from any number of merchants and Uber will pick it up and deliver it to you. The service can even send documents, much like a local courier service will do. With Uber you can see where your package is and get confirmation when it's delivered.
Merchandise may not be the biggest business Uber has today, but it's showing the power of the company's location services.
Uber's Plan to Take Over the World
Just think of how many applications location services have beyond the taxi. The two-way location platform Uber has built not only lets a service provider know where you are, you can tell where they are as well.
If built into businesses correctly, this could be great for pizza delivery, the cable repair truck and logistics in industries like long-haul trucking. You could track nearly anyone delivering goods or service you need with Uber's technology through a smartphone. That's why it has opened up an API (software that allows developers to tap Uber's technology) for third parties and is moving into new markets like product deliveries.
The grand vision is to have so many drivers and so many vehicles on the road that Uber becomes a go-to for both your transportation needs as well as deliveries. Tying those drivers in with the location-based infrastructure is where Uber's true value could lie.
I think Uber deliveries will eventually be integrated into thousands of merchants, just the way Apple (AAPL) Pay is trying to integrate itself, and Uber will be a delivery option. Of course, this would only be for local deliveries, but if you want a sandwich in 20 minutes or don't want to drive to the store for an item you need right away, maybe Uber can fill that need.
Will Uber Be the Merchant of the Future?
Considering how successful Uber has been as a taxi competitor and how many drivers are on the road, I have no doubt it will be able to transition into a delivery service as well. As of early 2015, Uber had 160,000 active drivers on the road, four times what it had a year ago, and was signing up 40,000 new drivers a month. That's an incredible network to build from.
With that said, it probably doesn't make sense for Uber to stock products itself and it will instead be an integrated player with other merchants in areas where offerings like UberRush are available.
If it's successful, Uber could be even more integral to our daily lives than we know. If the number of drivers it has continues to grow, the possibilities with Uber are endless.
Lionel Cironneau/APTwitter CEO Dick Costello, who resigned last week, is scheduled to speak Tuesday at the Bloomberg Technology Conference.
From a new video game console with extra storage capacity hitting the market to the latest earnings report out of the speedy parcel delivery specialist, here are some of the things that will help shape the week that lies ahead on Wall Street.
Monday -- Tech on Deck
The 2015 Bloomberg Technology Conference: Code and the Corner Office kicks off Monday. The two-day expo features some heavy hitters including Marissa Mayer and Dick Costolo.
You can't get into the conference; it's sold out. However, you can be sure that the more colorful comments and developments will make the rounds -- and not just on Bloomberg.
Tuesday -- Xbox Marks the Spot
Microsoft (MSFT) will ship a new Xbox One model Tuesday. The new gaming console will offer a full terabyte of data storage, double the capacity of the current system. It will be priced at $399, and the current 500-gigabyte model will see its existing $349 promotional price become a permanent move. Storage capacity has become a big deal for consoles as the industry shifts from disc-based games to digitally delivered diversions.
Microsoft's Xbox One hit the market a week after the PS4, but it was introduced at a higher price. It also didn't help that its arrival was accompanied by bad press about restrictive features that Microsoft abandoned just ahead of the launch. Beefing up its specs while keeping pricing competitive should serve the console well heading into this year's holiday shopping season.
Wednesday -- Delivering More Than Just Earnings
FedEx (FDX) reports quarterly results Wednesday morning. There's plenty of money to be made in the speedy delivery of parcels. Analysts see FedEx checking in with $12.32 billion in revenue, 4 percent more than it did during the same period a year earlier.
FedEx is a compelling company to track. It's a great proxy for the economy in general, as parcel deliveries rise and fall depending on how open consumers and companies are to paying a premium for shipping.
Thursday -- Supermarket Dash
There aren't too many companies reporting financial results this week, but one of them is Kroger (KR). Wall Street sees the chain of 2,625 supermarkets and other stores earning $1.22 a share for the quarter, well ahead of the $1.09 a share it rang up a year earlier. That may seem like ambitious growth for a sleepy grocery store operator, but Kroger has actually beaten analyst profit targets every single quarter over the past year.
Friday -- Pixar Strikes Again
Disney's (DIS) latest animated feature -- "Inside Out" -- hits theaters Friday. Pixar's release carries a plot that may be a harder sell than its earlier blockbusters. We're talking about following around the five emotions that govern a young girl's mind.
This will be the first year that Disney's Pixar puts out two movies. "The Good Dinosaur" was supposed to hit a multiplex near you last year, but its release got bumped to the 2015 holiday season.
Motley Fool contributor Rick Munarriz owns shares of Walt Disney. The Motley Fool recommends FedEx and Walt Disney. The Motley Fool owns shares of Walt Disney. Try any of our Foolish newsletter services free for 30 days, and check out our free report for one great stock to buy for 2015 and beyond.
Nick Ut/APA sign encourages people to save water at an April news conference in Los Angeles.By Sandra Block
Kiplinger's spoke with Daniel Sumner, a professor in the Department of Agricultural and Resource Economics at the University of California-Davis, about the effects of California's drought on produce prices over the long-term. Here's an excerpt from our interview:
California is in its fourth year of drought. Why haven't we seen big price increases on produce from California farms?
Start with the geography. Many crops for which California is the major supplier -- lettuce, strawberries, avocados -- grow along the coast, which hasn't been as severely affected by the drought.
What about prices for crops grown in the hard-hit Central Valley?
Most of the acreage cuts are in field crops, such as cotton and alfalfa, which have a limited effect on food prices. Some produce crops are affected; cantaloupes could get cut back a bit, so there may be a period this summer when they're more expensive. But farmers are doing everything they can to move water. Groundwater is scarce, but farmers have enough stored in aquifers so that, when they're hit with these severe droughts, they can usually pump a little deeper. Water is incredibly valuable for crops that are crucial to U.S. produce supplies (think carrots, tree fruits, grapes), so a farmer will idle a thousand acres of cotton, cut back on alfalfa or grow only 60 percent of his usual rice crop. Given a very complicated set of rules and regulations, farmers are being really innovative
Is that sustainable long-term?
We can't go on pumping water forever like we have over the past few years. If this drought continues, we'll gradually have to cut back water even for more-valuable crops.
The U.S. Department of Agriculture says that fresh fruit and vegetable prices will increase between 2 and 3 percent this year. What do you think?
I'd agree. Competition from other countries, such as Mexico, and even other states, such as Arizona and Texas, will keep prices from rising more. But there's a lot of weather yet to happen before the year is over.
What about California wine? Will we have to pay more for cabernet sauvignon?
Farmers aren't cutting back too much on the vineyards. But the drought could affect lower-priced wines, which tend to be made from grapes from the Central Valley. You might eventually pay more for those wines but probably not this year. The weather in the spring seems favorable for high yields and quality. And the strong dollar means that some wines from Chile, Australia, France or Italy will be a little cheaper, and that puts pressure on wine prices here.
The higher your age, the lower the price. Kinda makes getting older sound better.
Even as companies chase millennial spending dollars, they recognize that older Americans actually have money. They know baby boomers appreciate a good value.
Here are some of the Top Best Most wonderful discounts for seniors. By the way, can we pick another word? Senior sounds so old. Maybe we should call them Smarter Citizens?
Travel
Most airlines provide discounts to fliers who are at least 65 years old, if you ask for them.
Once you're on the ground, The Senior List has discovered that Hertz (HTZ) and Avis (CAR) provide AARP members discounts of up to 25 percent, and Budget will help your budget with discounts as high at 30 percent.
Marriott (MAR) provides 15 percent discounts for customers who are at least 62, but some Hyatt (H) hotels will boost that discount to as much as 50 percent.
Retailers
Shopping during the week? Good.
Ross Stores (ROST) discounts purchases by shoppers ages 55 and over by 10 percent on Tuesdays. Kohl's (KSS) provides 15 percent discounts on Wednesdays. Banana Republic will discount sales 10 percent if you are at least 63.
Food
The list of restaurants that provide discounts to seniors is very, very long. Many of them will knock 10 percent off the price of your meal.
However, Outback Steakhouse discounts meals 15 percent for AARP members, excluding booze (dang!). Jack-in-the-Box (JACK) provides discounts of up to 20 percent.
Dunkin' Donuts (DNKN) will give you a free donut with the purchase of a large cup of coffee (at participating stores).
PapaJohn's discounts online pizza orders by 25 percent for people who are at least 55 years old if you type "AARP25" in the promo code.
Groceries and Drugstores
Publix knocks 5 percent off the price of your groceries every Wednesday if you're at least 55, except in Florida.
In the Northeast, Waldbaum's will discount orders of $30 or more by 5 percent for shoppers ages 55 and older, usually on Tuesdays. You need to present a coupon.
For prescriptions, AARP discounts of up to 38 percent are recognized at 64,000 participating pharmacies, so ask.
Chains like Rite Aid (RAD), CVS (CVS), and Walgreens (WBA) have special programs that may cost a small fee to join in exchange for discounts on some prescription and generic meds.
Target (TGT) has a prescriptions savings plan that saves 10 to 50 percent on certain prescriptions at participating stores. You don't even have to be a senior citizen to join! So it's not really just a senior discount, it's just a great discount. The bonus here: Other members of your household can use the card, and you can earn reward points toward in-store discounts after filling five eligible prescriptions.
And for dessert ...
If you are at least 60 years old, The Senior List reports you can get 10 percent off your Ben & Jerry's ice cream. That totally makes turning the big 6-0 worth it.
NEW YORK -- The average price of regular grade gasoline rose by 3 cents over the last two weeks, the smallest gain in more than two months of steady increases, according to the Lundberg survey released Sunday.
"Prices appears to be peaking," said Trilby Lundberg, publisher of the survey.
Drivers paid an average of $2.87 a gallon, 82 cents below the average price paid at this time last year. If strong U.S. gas supply continues and oil prices stay steady, then pump prices will likely stop rising for the first time since April, Lundberg said.
The lowest average-price gasoline in the survey of cities in the lower 48 states was found in Tucson, Arizona, at $2.45 a gallon. The most expensive was San Diego, at $3.62 a gallon.
Richard Drew/APShopify officials celebrate the company's IPO in May on the New York Stock Exchange.
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.
Recently public Shopify moved higher after an expansion of its "buy" button test on the leading social media network. Shopify offers a cloud-based commerce platform, and the market's excited about the potential of its alliance with Facebook (FB) as the social network tests Shopify's "buy" buttons, where merchants can complete transactions with shoppers never having to leave Facebook.
Shopify went public at $17 last month. It's been a hot debutante, and last week's pop now finds the stock nearly doubling in less than a month of trading.
ITT Educational Services (ESI) -- Up 20 percent last week
A better-than-expected quarterly report sent shares of the provider of technology-oriented postsecondary degree programs higher. As with many for-profit educators, revenue did clock in lower than it did a year earlier. However, ITT's profit managed to nearly triple to 44 cents a share. Wall Street was braced for a year-over-year decline.
Krispy Kreme Doughnuts (KKD) -- Up 16 percent last week
Another big mover on earnings news was Krispy Kreme. The home of decadent doughnuts saw its revenue climb 9 percent, fueled by brisk expansion and a 5.2 percent uptick in comparable-store sales. Yes, those glazed circular treats are bad for you, but folks apparently can't get enough of them these days.
The sweetness carried all the way down to the bottom line: Krispy Kreme's adjusted profit rose slightly to 24 cents a share. Analysts were only holding out for net income of 22 cents a share, making this the first quarter in a year that Krispy Kreme has beaten analyst forecasts.
LeapFrog Enterprises (LF) -- Down 29 percent last week
The losses and sliding sales continue to mount at LeapFrog. The company that a generation ago raised the bar in the realm of electronic learning toys is struggling to remain relevant in this era of cheap tablets and even cheaper educational apps.
Consolidated net sales plunged 36 percent since the prior year's quarter. LeapFrog was hoping that new products that it introduced last year -- a video game console and a fitness tracker for kids -- would help offset waning demand for its earlier educational playthings. It obviously didn't happen. LeapFrog got schooled, again.
Boulder Brands (BDBD) -- Down 23 percent last week
Boulder Brands got rocked after announcing that its co-founding CEO had resigned effective immediately. It also warned that sales for the current quarter would clock in lower than in the same period a year earlier. This is the first time that Boulder Brands will be posting a year-over-year decline in quarterly sales in years.
Boulder Brands may not be a household name, but many of the company's health and wellness food brands are supermarket staples, including Smart Balance buttery spreads and EVOL natural frozen foods. It's also a big player in the gluten-free market with its Glutino and Udi's product lines.
Hovnanian Enterprises (HOV) -- Down 16 percent last week
At least one homebuilder is feeling the pain of a real estate rally that appears to finally be losing some steam. Hovnanian slumped after posting uninspiring quarterly results. Revenue inched slightly higher, but the developer's quarterly loss has widened since last year.
Cancellation rates held steady and its backlog of home orders has improved, but the market's concerned about its inability to get out of the red. It has posted a loss in four of the past six quarters.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Facebook and LeapFrog Enterprises. The Motley Fool owns shares of Facebook and is short Boulder Brands. 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.
M. Spencer Green/APA Ford Motor employee works on the engine assembly of a 2016 Ford Explorer at the Chicago Assembly Plant in Chicago.By Lucia Mutikani
WASHINGTON -- U.S. industrial production unexpectedly fell in May as manufacturing and mining activity remained weak, a sign that a strong dollar and spending cuts in the energy sector continued to constrain economic growth.
The softness in the production side of the economy contrasts starkly with recent upbeat data on retail sales, employment, and small business and consumer confidence, which have pointed to a growth pickup after a sluggish start to the second quarter.
Signs of spring remain largely absent in the industrial sector. The challenges of the stronger dollar and drop in energy prices linger.
"Signs of spring remain largely absent in the industrial sector. The challenges of the stronger dollar and drop in energy prices linger," said Tim Quinlan, an economist at Wells Fargo Securities in Charlotte, North Carolina.
Industrial output slipped 0.2 percent last month after declining 0.5 percent in April, the Federal Reserve said Monday. Industrial production has been weak since December, and economists had expected output to rise 0.2 percent last month.
The U.S. central bank isn't expected to raise interest rates at this week's policy meeting, but rather to wait until later this year.
Industrial production last month was held down by a 0.2 percent drop in manufacturing output. Manufacturing has been whacked by a strong dollar, which has eroded the profits of multinational corporations.
Companies like Microsoft (MSFT) and Procter & Gamble (PG), the world's largest household products maker, and healthcare conglomerate Johnson & Johnson (JNJ) have warned the dollar will hit sales and profits this year.
The dollar has gained about 13.2 percent against the currencies of the United States' main trading partners since last June largely on expectations of tighter U.S. monetary policy.
U.S. financial markets were little moved by Monday's data as investors kept a wary eye on Greece, which inched closer to defaulting on its debt. U.S. stocks were trading lower, while the dollar slipped against a basket of currencies. Prices for U.S. government debt rose.
Weak Orders
Although motor vehicle production, machinery, and computer and electronic products increased last month, it was not enough to offset the drag on manufacturing output from declines in the production of electrical equipment, appliances and components, fabricated metal products and wood products.
Manufacturing, which accounts for 12 percent of the U.S. economy and more than 72 percent of industrial production, was also weighed down by falling output of nondurable goods such as food and petroleum products.
It is likely to remain weak in the months ahead.
In a separate report, the New York Fed said its Empire State general business conditions index dropped to a reading of minus 1.98 in June from 3.09 in May.
That was the weakest reading since January 2013 and the second negative reading in the past three months. A gauge of new orders contracted, while shipments edged down. Though a measure of unfilled orders increased last month, it remained in contraction territory, indicating order books remained weak.
"Manufacturers will continue to struggle with the impact of the dollar's rise for some time yet," said Paul Ashworth, chief U.S. economist at Capital Economics in Toronto.
But given manufacturing's small share of the economy and recent signs of a sharp pickup in growth in the non-factory sectors, Ashworth said "there is every reason to believe that GDP growth will average between 2.5 percent to 3 percent annualized over the rest of this year."
That upbeat assessment was bolstered by a third report showing confidence among homebuilders vaulted to an eight-month high in June, suggesting the housing market recovery was gaining traction. Housing is expected to take up some of the slack from weak manufacturing.
GDP contracted in the first quarter, slammed by bad weather, port disruptions, dollar strength and energy sector spending cuts.
Last month, mining production fell 0.3 percent, the fifth straight monthly decline, as oil and gas well drilling and servicing fell 7.9 percent after plunging 14.5 percent in April.
That took the cumulative drop since the end of 2014 to 51.8 percent. But the pace of decline in oil and gas well drilling and servicing is moderating, suggesting the worst of the spending cuts is over.
Companies like Schlumberger (SLM), the world's No. 1 oilfield services provider, and Halliburton (HAL) have slashed their capital spending budgets for this year.
Oil and gas production, however, increased 0.5 percent in May. Unseasonably warm weather last month lifted demand for air conditioning, leading to a 0.2 percent increase in utilities production.
The amount of industrial capacity in use last month fell to its lowest level since January 2014.
Target will sell its pharmacy and clinic businesses to the drugstore chain CVS Health for about $1.9 billion in a deal that combines the resources of two retailers seeking to polish their health care reputations.
The acquisition allows CVS Health to reach more patients and expand its in-store MinuteClinic brand, which it has been growing aggressively for the past several years. It also gives the nation's second-largest drugstore chain a retail presence in new markets such as Seattle, Denver and Salt Lake City.
Target customers, in turn, will gain access to CVS Health Corp.'s pharmacy care programs that help them manage their prescriptions, find low-cost generic drugs and buy specialty medications, a rapidly growing slice of the pharmaceutical market.
Drugstore chains, grocers and big retailers such as Target and Walmart (WMT) have all pushed deeper into customer health in recent years, in part to serve the aging baby boom generation and the millions of uninsured people who are expected to gain coverage under the federal health care overhaul. They've added walk-in clinics to their stores and, in some cases, expanded the care those clinics provide to include monitoring chronic conditions like diabetes.
Retailers also are putting more health care products on their shelves.
Drugstores have long-since slowed their push to grow by building new stores and shifted to expanding what their existing stores offer. That includes groceries and other non-pharmacy items, aside from health care products, as they try to attract customers who are looking to buy more in a single stop.
CVS Health gained national attention last year when it announced it would pull tobacco from its store shelves as part of a push to improve its reputation as a health care provider. The drugstore chain also changed its name to CVS Health from CVS Caremark last year as part of its increased focus on health.
Target had already quit selling tobacco in 1996.
The deal announced Monday includes more than 1,660 pharmacies in Target stores that will be branded as CVS/pharmacy. The agreement also calls for new Target stores to include a CVS/pharmacy if they are going to offer pharmacy services.
Rebranding
Target Corp.'s nearly 80 clinic locations will be rebranded as MinuteClinic. CVS Health will also open up to 20 new clinics in Target stores within three years of the deal's closing.
In addition, Woonsocket, Rhode Island-based CVS Health and Minneapolis-based Target plan to develop five to 10 smaller stores over two years. The stores will be branded as TargetExpress and include a CVS/pharmacy.
Target has nearly 1,800 stores and also sells products through its Target.com website. The retailer, which caters to customers who have a little more money than Wal-Mart shoppers, is trying to reinvent itself as a more nimble and innovative company and is trying to reclaim its reputation as a cheap chic retailer under CEO Brian Cornell.
It expects after-tax proceeds of about $1.2 billion, which it plans to use buying back stock, among other capital priorities.
CVS Health will pay for the deal with new debt and has lowered its share repurchase guidance for this year to $5 billion from $6 billion. CVS Health runs 7,800 drugstores and nearly 1,000 walk-in medical clinics, a total it plans to expand to 1,500 clinics by 2017. It also operates one of the nation's largest pharmacy management businesses, which runs prescription drug coverage for insurers, employers and other big customers.
Shares of CVS Health (CVS) climbed 66 cents to $102.88 Monday before markets opened, while Target (TGT) rose 52 cents to $79.99.
-AP Business Writer Michelle Chapman contributed to this report from New York. Murphy reported from Indianapolis.
If your couch has seen better days, you can restore it for just a few dollars. Here's how.
To fluff up your back cushions with a material called polyester fiberfill. They sell it at most craft stores for about $20. Just unzip the cushion on the back of your couch and fill it to your liking. It will work on your throw pillows, too.
If you're tired of seeing a permanent imprint on your seat cushion, pick up a bag of quilt batting for around ten bucks. Simply remove the cushion from its cover, wrap a few layers of quilt batting around the cushion, and then put it back in its cover. This is a quick and easy way to bring comfort back to your couch.
Before you send your saggy couch to the curb, save your cash and your cushions, with these simple fixes.
Gene J. Puskar/AP
NEW YORK -- Gap plans to close 175 of its namesake stores and 250 jobs at its headquarters as the company tries to strengthen the struggling brand.
Gap Inc. (GPS), which owns Gap, Old Navy and Banana Republic, said Monday it will close about 140 Gap stores in North America in the fiscal year that ends Jan. 31 -- and the remainder afterward -- based on factors that include location and performance. The San Francisco company also is closing an undisclosed number of stores in Europe. And it's cutting jobs at its headquarters in an attempt to make it faster and more decisive.
The moves are the latest attempt by the once high-flying company to improve the shaky performance at its namesake brand. The brand that used to be a go-to for generations of khaki pants wearers has suffered in more recent years as it's failed to keep up with the right design trends.
To help right the ship, Gap has shaken up its management ranks: Art Peck became CEO in February and leadership of the Gap and Banana Republic brands was changed. The company also has been working to overhaul its fashions to improve their appeal. And it got rid of its Piperlime line.
The latest moves are aimed at making the company more nimble. Gap said the job cuts at its headquarters, in particular, are intended to make it faster and more decisive. In total, Gap said store closings and job cuts will save it around $25 million a year. The company said it will take about $140 million to $160 million in charges related to the moves.
The stores that will close, which won't include Gap Factory or Gap Outlet locations, have about $300 million in annual sales out of Gap's total of $16 billion. After the closings the company will have about 800 Gap stores in North America, down from around 960 now. The company declined to say how many people work in those stores. The company also did not say whether those workers would be laid off or displaced.
Gap doesn't expect the moves to affect its other brands, most of which have been performing better than Gap stores. In fact, Gap Global President Jeff Kirwan told The Associated Press that the company will apply lessons it's learned from its Old Navy brand, which has been a bright spot, to Gap.
NEW YORK -- Stocks fell Monday on Wall Street as investors fretted over the consequences of a possible debt default by Greece, but talk of multibillion dollar health care deals buoyed shares in the sector, cutting into the market's loss.
After Sunday's breakdown of the cash-for-reform talks between Athens and its creditors, Greece has two weeks before facing a 1.6 billion euro repayment due to the International Monetary Fund that could leave it out of cash. On Monday, positions among negotiators hardened.
This market is moving toward the position of an increasing probability that there is going to be a Greek default.
Indexes had opened sharply lower on the Greek developments but cut losses through most of the session.
"This market is moving toward the position of an increasing probability that there is going to be a Greek default. That's what started us off so badly," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.
"We've never had a country part of the euro currency system default, so we don't really know what the impacts are going to be. Away from the consensus you got to become a little cautious thinking what the derivative reactions are going to be."
The Dow Jones industrial average (^DJI) fell 107.67 points, or 0.6 percent, to 17,791.17, the Standard & Poor's 500 index (^GSPC) lost 9.68 points, or 0.5 percent, to 2,084.43 and the Nasdaq composite (^IXIC) dropped 21.13 points, or 0.4 percent, to 5,029.97.
Health Care Lends Support
Cigna (CI) shares jumped as much as 19.4 percent to a record high of $164, buoying the health sector, after The Wall Street Journal reported Cigna rebuffed a takeover offer from rival Anthem (ANTM) that valued it at about $45 billion. Cigna closed up 11.7 percent to $153.43.
The WSJ story said UnitedHealth could be also eyeing deals with Cigna or Aetna. UnitedHealth (UNH) shares rose 1.1 percent to $118.98 and Aetna (AET) added 4.4 percent to $121.01. Humana (HUM) previously seen as a target from Cigna, fell 2.8 percent to $206.58.
"This is another indication of the growing importance of clout, or better negotiating power, in the health care market," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia, which counts Aetna among its largest holdings.
"You're seeing insurers combine for more power to negotiate with hospitals and pharmaceutical companies."
A deal that was announced involved drugstore operator CVS Health buying Target's pharmacies and clinics. The $1.9 billion deal should help CVS bargain with drugmakers for lower prices. CVS (CVS) shares edged up 0.4 percent to $102.58 while Target (TGT) gained 1.2 percent to $80.45.
Shares of United Technologies (UTX) weighed the most on the Dow industrials, down 2.5 percent at $114.61. It said it is exiting the helicopter business and would decide whether to spin off or sell its $8 billion Sikorsky unit, the U.S. military's largest helicopter maker.
Declining issues outnumbered advancing ones on the NYSE by 1,983 to 1,075, for a 1.84-to-1 ratio on the downside; on the Nasdaq, 1,639 issues fell and 1,149 advanced for a 1.43-to-1 ratio favoring decliners.
The S&P 500 posted 5 new 52-week highs and 12 new lows; the Nasdaq composite 98 new highs and 55 new lows.
About 5.84 billion shares changed hands on U.S. exchanges, below the 5.98 billion daily average so far this month, according to BATS Global Markets.
What to watch Tuesday:
The Commerce Department reports housing starts for May at 8:30 a.m. Eastern time.
Federal Reserve officials begin two-day meeting on interest rates.
Adobe Systems (ADBE) reports quarterly financial results after U.S. stock markets close.
Are you thinking about redecorating your bedroom or sprucing up the den? If so you're probably in the market for some new furniture. To stretch your home makeover budget, plan ahead and buy furnishings during the times of year when prices tend to be lower.
New furniture models are released in February and August each year, so retailers tend to have furniture sales in January and July. However, the January sales often extend through Presidents Day weekend in mid February, when price cuts are particularly steep, says Sean Graw, of Brad's Deals, a website that tracks deals and coupons. Furniture sellers including IKEA and Overstock.com slash prices as much as 70 percent on select items during Presidents Day sales, he says.
If a new mattress is on your shopping list, Memorial Day sales offer the biggest discounts and the best selection on mattresses, says online shopping expert Brent Shelton, of FatWallet.com, a coupon and deal site. Offers.com CEO Howard Schaffer says mattresses can be discounted 50 to 80 percent during holiday-weekend sales, though Shelton says you can usually count on getting an extra 10 percent off during Memorial Day sales versus other holiday weekends such as Presidents Day and Labor Day.
Need a new television to go along with the new sofa and recliner in your redecorated family room? If price is more important than quality, the week of Thanksgiving is the best time to get a great price on a basic high-definition TV, says Graw. Most off-brand sets are discounted 30 to 50 percent. For big-screen TVs from name-brand manufacturers, look for sales that coincide with the Super Bowl, says Schaffer. Prior-year models will be discounted to make room for new models, which are released in February. Data from DealScience.com, a website that predicts the best times to make purchases based on historical sales, shows that sets are 30 to 40 percent off during sales in mid-January through February.
And don't neglect the outside of your home when redecorating. Rock-bottom prices on patio furniture can be found in October and November, says Schaffer, when retailers try to clear out the remaining inventory of summer merchandise. Shoppers can expect discounts of up to 85 percent then, he says. However, the selection will probably be pretty limited by fall. So if you're more concerned with style than savings percent, try shopping in late summer, when retailers begin marking down patio furniture, says Kristin Cook, managing editor of Ben's Bargains, a website that specializes in finding online deals. Discounts will be smaller, but choices will be greater.
With American homeownership in a steady decline, according to the U.S. Census Bureau, many households aren't living in the passive asset that is a house.
Homeownership is a long-term play, and for most families, true wealth only materializes when the mortgage is nearly paid off. Renters have an array of alternative strategies for building wealth, but doing so requires an extra dose of self-discipline to save money in the absence of a mortgage that converts an essential cost of living to an asset.
The costs of ownership are so high in so many areas that it does make sense to rent -- if you can invest the difference.
"The costs of ownership are so high in so many areas that it does make sense to rent -- if you can invest the difference," says Rachel Podnos, a financial planner with Wealth Care, based in Merritt Island, Florida.
Start by validating your decision to rent, recommends Yuval D. Bar-Or, assistant professor at the Johns Hopkins Carey Business School.
"Map out those two scenarios so you can make a detailed comparison," Bar-Or says.
Bear in mind that property appreciation must be weighed against the costs of property ownership, Bar-Or says. Those include property taxes, maintenance, improvements, homeowners insurance and the fact that you'll lose about 6 percent of the value of the property when you sell, thanks to realty commissions.
Still, many Americans view a mortgage as a forced savings plan that converts a basic cost of living into property ownership. If that's not part of your plan, you'll want to think about how to integrate similar long-term asset growth into your strategy.
"The more diversified your assets, the more choices you have in the future. Real estate is a traditional mainstay among asset choices. By not investing in your own home, you're taking direct ownership out of your nest egg," Bar-Or says. "So the question is, how can you get diversification with the same characteristics of real estate?"
Advisers sketch two ways to capture long-term gains: equities and real estate.
Bar-Or recommends two categories of equities that are likely to diversify the typical retirement portfolio and serve as a stand-in for home equity: foreign stocks and domestic small-cap stocks.
REITs
Another route is to approach real estate ownership purely from an investment standpoint, advisers say.
The two ways to accomplish this are through investment vehicles or direct ownership.
Real estate investment trusts and real estate-based funds invest in real estate, as opposed to stocks. Typically, REITs hold commercial and large-scale rental properties, although some specialize in portfolios of single-family homes, and others, in the stocks of publicly traded homebuilders.
Directly owning rental properties is closer to home -- maybe too close, experts say. Renting while owning rental properties is, in some ways, the worst of both worlds, says Bar-Or, because you can't control your landlord's decisions about the rent you pay, while you are, in turn, a landlord at the mercy of your tenants. "If you're nearing retirement or very busy, this may be the last thing you want," he says. "But on the positive side, if you are able to identify a good business investment -- a good price, good location, and build equity with profitable cash flow -- then if it's a good business decision, it stands on its own."
One key consideration, he adds: Is there, or will there soon be, sufficient cash flow to hire a property management firm to buffer you from the daily headaches?
Consider testing your tolerance by owning a single property. If it's worth the hassle, buy several more rental properties and "gain economies of scale" that let you farm out maintenance and management, he suggests.
Rental Stigma
Check your assumptions about the investment returns on owning single-family rentals. According to recent research conducted by Velma Herbert, an associate professor with the College of Family and Consumer Services at the University of Georgia, houses that are rentals when they go on the market typically sell for 8 percent less than similar houses. That's only the case for properties that haven't been rentals for long; properties that have been rented for years don't suffer the same discount.
The difference might be explained by landlords' reluctance to polish properties they know they will be selling soon, or it might have to do with how such properties are presented and marketed, Herbert says. But the implication is that you might get less than you think if you buy a house that has been owner-occupied and figure you'll capture some rental income while local values increase. "You need to pay attention to the longer term and to the whole span of investment," Herbert says.
Even if you think you might want to buy a house eventually, renting can give you some perspective on home economics, Podnos says. She says long-term returns for real estate are about 2 percent, while long-term returns for equities are about 6 percent. "All you have to do is look at that and say, 'I understand I want a home, but it's not an investment,' " she says.
"Building equity is not the same as gain through investing," she says. "You might sell at the right time and make a profit, but you can't count on it. Your motivation for buying a home should not be that it's an investment. Do it because you want the security of having a home and building equity."
ShutterstockSome systems allow seniors to record health information in an app then share it with family members and health care providers.By Maryalene LaPonsie
Every morning, Marion Berg measures her blood pressure and heart rate and then uses a tablet to relay the results to her health care team. At 101 years old, the Sun City, Arizona, resident says the system is a change for her, but one she likes.
"Using a tablet is new to me, but my health care coach is helping me learn every week when she visits my home," Berg says.
Berg participates in the Banner iCare program, and her experience is one example of how long-term care plans are integrating technology as a way to reduce costs and improve quality of life.
How Long-Term Care Is Using Technology
Virtual long-term care services can vary significantly, and almost all programs can be used in combination with a home health aide or other home care.
We see this as an affordable way to extend [a caregiver's] budget.
"We see this as an affordable way to extend [a caregiver's] budget," says Danna Gomez, founder and co-owner of Managed Senior Care in Grand Rapids, Michigan. She notes that home health aides can cost an average of $21 an hour in her area. By using a remote monitoring system, a caregiver may be able to reduce the number of hours an aide needs to be in the house without sacrificing a senior's safety.
While technology-based care systems can be set up in many ways, they usually fall into one of three categories:
1.Independent-Use Systems. Some systems are used independently by families to record information that can then be shared with health care providers or used to keep other family members informed of a loved one's condition.
For example, eCaring is software that can be downloaded as an app and set up for independent use. Family caregivers or seniors themselves can enter information such as what they ate, what medications they took and how they are feeling.
"We needed to create something simple," says Robert Herzog, founder and CEO of eCaring, "so we invented language that uses symbols for caregivers to enter information about a patient."
Authorized family members or health care professionals can access the information, and customized alerts can be sent to notify a caregiver of potential safety concerns, such as when meals are skipped or a blood glucose reading is too high.
2.Virtual Reporting Systems to Complement Home Health Care. This category of care combines some level of virtual monitoring with traditional home health care visits. Deborah Dahl, vice president of patient care innovation for the health care nonprofit Banner Health, says Banner iCare uses this type of delivery system to keep seniors at-home and healthy.
"We are focused on the chronic, complex patient population who have five or more conditions," Dahl says. "Our objective is to keep them living at home."
To do that, Banner iCare uses a number of tools. The program may set patients up with a Philips Lifeline system, so they can easily call for help, and Samsung tablets are typically installed in each patient's home. Through the tablet, vital statistics such as blood pressure, heart rate, weight and other data can be transmitted to health providers. Two-way video conversations may be also be used to gauge how a person is doing that particular day. While the technology does the daily monitoring, a home health aide may visit once a week to provide personal follow-ups as needed.
3. Twenty-Four Hour Remote Monitoring. For those who want to maximize their peace of mind, Gomez says the Cadillac of virtual long-term care is a remote-monitoring system like that offered by grandCARE.
With this system, activity sensors are placed in a senior's home. To use grandCARE, Managed Senior Care first evaluates what a typical "good day" looks like for a senior and sets alerts accordingly. For example, if a senior typically has breakfast by 9 a.m. and the refrigerator hasn't been opened by that time, an alert may go out to a caregiver.
As with Banner iCare, seniors using the grandCARE system are set up with a tablet. In this case, it's an oversized tablet that can be remotely activated. If a caregiver needs to check on a senior, he or she can open Skype which will activate the camera and microphone on the tablet. At that point, the caregiver can look for the senior and call out to him or her to determine whether help is needed.
"One of the reasons we like this product is because it's respectful of the senior," Gomez says. "You know when people are watching. There is no secret monitoring."
"We save over $4,000 per patient per year and avoid hospital visits and readmissions," Herzog says. From 2013 to 2014, Banner Health tracked the outcomes of newly enrolled iBanner members and compared that to claims data from the year before their enrollment. They found the program resulted in an overall 27 percent cost savings of $788 a month for each patient. Hospitalizations also dropped to 6.3 per 100 patients per month six months after enrollment from 11.5 per 100 patients per month in the year prior to enrollment.
While virtual care and remote monitoring systems may never be appropriate for people who require intensive hands-on help, health care professionals say these systems are making a significant impact on the lives of many seniors.
"We feel really good that we're keeping people out of the hospital every week," Herzog says.
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