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    Inheritance note
    Getty Images
    By Susan B. Garland

    Many retirees hold both a tax-free Roth IRA and a tax-deferred account, such as a traditional IRA or a 403(b). And it's now a mantra among many financial advisers that the Roth is the better account to leave to your children because they can take tax-free withdrawals over their lifetimes.

    But this may not always hold true. Your children could end up with a bigger inheritance if you tap the Roth for your own expenses and leave your traditional IRA to them, even though they will pay income tax on each withdrawal. The deciding factor: your tax rate versus your beneficiary's rate, according to a recent study in the Journal of Personal Finance.

    The general rule of thumb, the researchers found, is that a child who has a lower tax rate than the parent will get a bigger pot of money if he gets most or all of the inheritance from the traditional IRA. If the child has a higher tax rate than the parent, the heir will do better getting most or all from the Roth. "The widow and heir can maximize their joint after-tax amount by having the person with the lower tax rate pay tax" on the traditional IRA, says William Reichenstein, professor of investment management at Baylor University in Waco, Texas. (He is a co-author of the study with Tom Potts, a professor of financial planning at Baylor.)

    Say the mother has $100,000 in a traditional IRA and $100,000 in a Roth IRA. She needs $60,000 in after-tax income to meet her spending needs. Assume she dies after she pays her expenses.

    Also assume that the mother has a 40 percent combined federal and state tax rate, while the son's rate is 15 percent. She takes the $60,000 tax free from the Roth for expenses. She leaves her son the $40,000 Roth balance, plus the $100,000 in the traditional IRA. His after-tax take on the traditional IRA is $85,000 -- for a total after-tax inheritance of $125,000.

    If instead the mother taps her traditional IRA for expenses, she must withdraw the entire $100,000 to get $60,000 in after-tax income. Her son's take: the $100,000 tax-free Roth.

    The son fares much better with the first strategy -- getting the bulk of his inheritance from the traditional IRA. That's because the funds in the traditional IRA are "being taxed at the son's 15 percent tax rate instead of the mom's 40 percent tax rate," Reichenstein says.

    What happens if the tax rates are reversed, with the son at 40 percent and the Mom at 15 percent? The son will inherit $100,000 in after-tax money if his mother takes her expenses from the Roth, according to Reichenstein. He gets close to $124,000 if she taps her traditional IRA to live on and pays just 15 percent tax on her withdrawal.

    When There's More Than One Heir

    The calculations can be even more complex if a parent has two or more children with different tax rates. Giving each child an equal share of each account will lead to unequal after-tax inheritances, the study found. To equalize the inheritances, the parent should give the kid with the lowest tax rate a bigger share of the traditional IRA and the kid with the higher rate a larger share of the Roth.

    Say a widower has a $100,000 Roth and a $100,000 traditional IRA that he wants to leave to his daughter and son. Assume the son pays a 15 percent tax rate, and the daughter pays a 40 percent tax rate.

    Dad leaves half of each account to each child. Each child gets $50,000 tax free from the Roth. But the son, at his 15 percent tax rate, gets an after-tax $42,500 from his $50,000 share of the traditional IRA, while the daughter, at 40 percent, gets an after-tax $30,000.

    To even out the legacies, Dad gives his son $7,500 in tax-free money from the Roth, plus the $100,000 traditional IRA. Taking into account his 15 percent tax tab when he withdraws from the traditional IRA, his after-tax inheritance is $92,500. The daughter inherits $92,500 tax free from the Roth. Because the IRA owner won't know how much will be in the accounts when he or she dies, the owner can leave the children percentages: 7.5 percent of the Roth to the son and 92.5 percent to the daughter, Reichenstein says.

     

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    detail of several social...
    Shutterstock
    By Emily Brandon

    President Franklin D. Roosevelt signed the Social Security Act on Aug. 14, 1935. Regular monthly payments to retirees began in 1940 and have continued ever since. But there have been several important adjustments to the program, including changes in the retirement age and increases in benefits to keep up with inflation. Here's how the Social Security program has changed over 80 years.

    Electronic payments. "When we first started 80 years ago, we were mostly providing face-to-face service," says Carolyn Colvin, acting commissioner of the Social Security. "Over the years we have moved to our 800 number, and we are gradually offering additional products online." Retirees can now sign up to receive Social Security payments online. "There is waiting time on the phone and wait time in the office. On the Internet it is immediate," Colvin says. The Social Security Administration no longer mails paper checks to most retirees. A 2013 law requires all beneficiaries to receive payments electronically via direct deposit to a bank account or loaded onto a prepaid debit card

    Online statements. Workers can create an account to view their Social Security statement online, which includes their earnings history, taxes paid and a personalized estimate of their future Social Security benefit. "We introduced the earnings statement so people could check the accuracy of the statement before they retired," Colvin says. She recommends that workers sign in to check their statements once a year. Paper Social Security statements are mailed to most workers who don't opt into online statements about once every five years.

    Automatic cost-of-living adjustments. Social Security payments were initially increased only by special acts of Congress. When payments began in 1940, workers received the same amount for 10 years until Congress decided to boost payments, and further increases were implemented on an ad hoc basis. "A lot of those increases occurred in election years," says John Palmer, a Syracuse University professor and former public trustee for the Medicare and Social Security programs. Congress passed a law in 1972 creating automatic cost-of-living adjustments to Social Security payments based on the annual increase in consumer prices. These annual increases in payments, which were first paid out in 1975, have ranged from zero in 2010 and 2011 to 14.3 percent in 1980.

    Changes to the retirement age. The original age to claim Social Security payments was 65. A 1961 law allowed workers to begin claiming permanently reduced Social Security payments as early as age 62, but they still needed to wait until the full retirement age, 65, to receive the entire payment they qualified for. "Anytime from 62 on you could claim, but the benefit was reduced proportionally to how much earlier you did start to claim," Palmer says. "Now a majority of people opt to start claiming at 62." A 1983 law raised the full retirement age to 66 for most baby boomers and 67 for people born in 1960 or later and increased the reduction in monthly payments for people who sign up before their full retirement age. Provisions were also added to increase payments for retirees who delay claiming benefits past their full retirement age up until age 70.

    Elimination of the earnings test. A 2000 law eliminated the earnings test for people at their full retirement age or older, meaning they can work and claim Social Security benefits at the same time without penalty. However, if you work after signing up for Social Security prior to your full retirement age, part of your payments will be temporarily withheld. Beneficiaries under age 66 can earn up to $15,720 in 2015, after which $1 in benefits is withheld for every $2 earned above the limit. Retirees who turn 66 in 2015 can earn $41,880 before one benefit dollar is withheld for each $3 earned above the limit. However, after you reach your full retirement age, there is no limit on earnings, and Social Security payments are recalculated to factor in the temporarily withheld benefits. "If you are 66 or older, now you can work full time and collect Social Security benefits," Palmer says. "It's meant to put much more emphases on work incentives for people to both be able to collect Social Security and still be able to work at least part time."

    Taxation of benefits. Part of Social Security benefits became taxable for people who earn above a certain amount beginning in 1984. If the sum of your adjusted gross income, nontaxable interest and half of your Social Security benefit exceeds $25,000 for individuals and $32,000 for couples, up to 50 percent of your Social Security benefit becomes subject to income tax. And if these sources of income top $34,000 for individuals and $44,000 for couples, 85 percent of your Social Security payments may be taxable. "The thresholds that are set up aren't indexed to inflation, so more people will have some portion of their Social Security income be subject to taxation," Palmer says.

    Addition of spousal and child payments. Amendments were made to the Social Security program in 1939 that added payments to the spouse and minor children of retired workers and benefits for survivors of prematurely deceased workers. Spouses continue to be eligible for up to 50 percent of the higher earner's benefit, if it's greater than the payments they are due based on their own work record. Dependent children under age 19 can also claim payments. "Participating in Social Security provides core protection for all of our children," says Eric Kingson, a professor of social work at Syracuse University. "It's life insurance, in effect."

    Addition of disability payments. Disability payments for older workers were first added to the program in 1956. President Dwight D. Eisenhower signed a law in 1960 extending disability payments to workers of all ages and their dependents. Within a year, half a million people were receiving disability payments that averaged $80 per month. "Social Security is really the underpinning of economic security it the country," Colvin says. "It was a security program designed to help people in periods of transition."

    Tax rate. The original Social Security contribution rate was 1 percent of pay, which was matched by employers. The tax rate grew to 1.5 percent in 1950 and gradually increased to top 5 percent by 1978. The current tax rate of 6.2 percent has been in effect since 1990. However, some workers don't pay Social Security taxes on all of their income. The Social Security tax applied only to earnings of $3,000 or less in 1950 and earlier. The tax cap has increased over time to $51,300 in 1990 and $118,500 in 2015. Earnings above this amount aren't subject to the Social Security payroll tax or factored into benefit payouts.

    Payouts. The first monthly retirement check was paid to Ida May Fuller of Ludlow, Vermont, in 1940 for $22.54. The average monthly payment for retired workers has since climbed to $1,335 in June 2015.

    Emily Brandon is the senior editor for Retirement at U.S. News. You can contact her on Twitter @aiming2retire, circle her on Google Plus or email her at ebrandon@usnews.com.


    Get Your Due from Social Security

     

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    Family with For Sale sign outside of house
    Getty Images
    By Bob Sullivan

    I had a depressing conversation recently with someone who does big housing construction deals for a big bank. There's only two types of deals that work, he said: 1) Building pricey, premium, granite-countertop homes for well-off folks, or 2) Building affordable housing with government subsidies. Roughly speaking: There is construction for the rich or the poor. Nothing in between.

    Most important, nothing for that apartment-dwelling couple with a toddler and a baby on the way. That's the lament I hear from all my urban friends around the country. Where can I start my family? Where is my starter home?

    It's gone. Builders and banks just can't make money off humble homebuilding, or at least they think they can't.

    If he's right, my banking friend solved a riddle that has been at the heart of The Restless Project: Why do middle class folks feel so lost, even if they have decent jobs? I set about trying to confirm my friend's sentiment, and it was harder than I thought. There's little agreement on what a starter home is. He blamed demanding millennials, who refuse to live in a house without granite. While that's partly true, I think the problem is much deeper.

    In fact, you could argue -- and I will -- that starter homes are basically disappearing. They aren't being built, and those that exist are either falling into functional disrepair (they are old), or more likely, being snapped up by investors to rent to young families.

    First, a little housing lesson. Back in the postwar boom, America's housing industry was on fire. Single-family housing starts jumped an incredible 400 percent during the decade. According to this great housing history, in 1950, the average price was $11,000. For perspective, median income, in real dollars, was about $3,300.

    But here's the number to watch: the average home was 963 square feet. A majority of homes had two bedrooms and one bathroom.

    By 1972, prices had jumped to $30,000 while family income was nearly $10,000. Homes, which typically had three bedrooms and at least a bath and a half, now averaged 1,600 square feet. That kind of house can pretty comfortably shelter a family with 2.3 children.

    Today, families are smaller -- from 1970 to 2014, family size shrunk by about half a person. What's the average square footage of a home? About 2,500. More space, fewer people.

    That's progress, of course. Now homes have central air and finished basements and man caves and spa tubs and, yes, granite countertops. But all those things are useless to young families who have no idea where to find the $500,000 they have to pay to live in a place with decent schools that's within 50 miles of their workplace.

    A healthy housing market would provide a wide spectrum of housing -- the $200,000 tiny place, the $400,000 step-up home, the $700,000 dream home. I promise you that plenty of my apartment-dwelling friends would love a two-bedroom starter home on a cozy lot. But they don't seem to exist. Why?

    This BuilderOnline.com story, "Are new starter homes history," offers a tidy explanation. For now, let's peg $200,000 as the price of a starter home. (For a fun fact, $30,000 in 1970 has the spending power of $185,000 today. But I'm going with round numbers). It begins with a tale I've told in other places -- if a builder can construct homes that cost 2.5 times median household income in a neighborhood, the homes will sell like hotcakes. Two-and-a-half times? Median household income is roughly $50,000 in America today. See a lot of $125,000 homes sprouting up?

    No. You don't even see $200,000 homes sprouting up. In fact, only 46,000 sub-$200,000 new homes were sold in 2014. Anywhere.

    And here's why, according to BuilderOnline:

    Making a $200,000 home work as a homebuilder is junior-high-level arithmetic. Solving for profit -- say, 20 percent -- land and building direct costs can not exceed $160,000. Problem is, a 20 percent margin on a sub-$200,000 house has become frighteningly elusive in the past decade.

    The lowest build cost is around a $50 a foot, says David Goldberg, a homebuilding and building products manufacturers analyst for UBS, New York. "If you do a 2,000-square-foot house, which is what you'd have to do to compete with existing stock, that leaves you with $100,000 of sticks-and-bricks cost. The maximum cost on the land would be $60,000."

    The catch to all this is that it's not just one problem. No single culprit is killing the new starter home. A stream of factors -- land, operational risk, labor, material costs, entitlement fees -- converge at a single, all-too-real vanishing point where affordability becomes unaffordability.

    Even if land can be secured at a reasonable cost, cash-thirsty localities heap fees upon fees that weigh more and more heavily on final home price tags. Chris Cates, co-owner of Fayetteville, North Carolina-based Caviness & Cates Communities, estimates that regulations that stipulate he has to convert stormwater ponds to permanent ponds and bond items such as street lights, sidewalks, landscaping and retention ponds have doubled his development costs.

    So the numbers just don't work. But left unsaid is another obvious factor, typical in all industries: every business strives to sell premium, high-margin goods. Your coffee shop wants to sell you pour-over brews at twice the price. You bar wants you to buy microbrews. Your car dealer wants you to buy a Ford Expedition, not a Ford Focus.

    The low end of the market is for suckers, or Walmart. At least until demand becomes overwhelming in that segment. But even then, housing isn't like hamburgers. Even if builders today decided America needed 5 million new midrange affordable homes, it would take years for projects to take shape, get approvals, get financing, etc. Housing is very slow to react to demand.

    But that's why there's "used" homes, right? Young families are supposed to buy a needs-TLC place in their 20s, fix it up and trade up to their dream home later.

    The problem is that cheaper, older starter homes are nearly as hard to find. Here's one piece of evidence: The folks at RealtyTrac ran the numbers for me, and it turns out that year-to-date sales of sub-$200,000 homes is down this year compared to the last three years. That's strange, given that sales above $200,000 are up. For example, two years ago, there were 395,000 sub-$200,000 homes sold from January to May. This year, there were only 343,000. Rising prices can't account for more than a fraction of that drop.

    Worse yet, families who would buy cheaper homes are being edged out by investors who buy the homes and rent them out. Nonoccupant buyers of single-family homes hit a record last quarter, according to RealtyTrac.

    Worst of all, that's even more true in hot, affordable communities where families are fleeing to avoid New York City and San Francisco prices.

    Among metropolitan statistical areas with a population of at least 500,000, Memphis, Tennessee, posted the highest share of institutional investor purchases of single family homes in the first quarter of 2015 -- 14.1 percent -- followed by Charlotte, North Carolina (12.1 percent), Atlanta, Georgia (9.6 percent), Jacksonville, Florida (8.5 percent), and Oklahoma City, Oklahoma (7.6 percent).

    Of course investors are buying in those places. At a time when it's very hard to make money by saving, and the stock market appears fragile, renting to stable families is a great way to make a return on investment.

    Housing expert and loan officer Logan Mohtashami talks about the "cracked equilibrium" that has led to this state of affairs: Dual-income parents with decent jobs shut out of the housing market because there's nothing but luxury homes to buy, trying to stick it out in their one-bedroom apartment. I keep saying that average people with average jobs can't afford average homes in America, and that's the source of untold strife.

    There's no law of nature that says buying a home is superior to renting one. There are plenty of logical reasons that young folks might choose to rent instead of buy, and more power to them. It's been good for America to shed the idea that housing is a guaranteed investment/retirement plan. But Mohtashami warns about the potential long-lasting social consequences of an all-renter/landlord society.

    "Are we at the beginning of a sociological movement away from middle-class home ownership and towards a cultural split between the investment property landlords and their renters both of whom may have less personal investment in neighborhood security, local schools and shared public facilities compared to primary homeowners?"

    Buying has one huge advantage over renting -- fixed monthly payments. In all but the most unusual situation, that means housing really becomes cheaper as time passes, thanks to inflation. That is not true of renting, and certainly not now. Rents are rising at record rates around the country.

    That puts families who want a place to live between a rock and ... no place, really.

    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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    Man in front of a display with the website of the internet search engine Google.
    Ulrich Baumgarten via Getty Images
    By Tenzin Pema and Lehar Mann

    Google's overhaul of its operating structure is an acknowledgement of the lack of transparency surrounding its disparate businesses and projects, analysts said, but it remains to be seen how much more the company will actually disclose.

    Analysts and investors have long sought more granular detail on Google's capital spending and cash flow, as well the financial performance of YouTube and the Android operating system.

    Google said Monday it would split into two reporting companies under a new holding company called Alphabet.

    One will hold its core search and Web advertising business, and the other its newer ventures such as driverless cars and Internet-connected thermostats made by its Nest business.

    This supports our view that GOOGL has entered a new era of shareholder friendliness.

    Google (GOOGL) shares were up 5.7 percent at $701 in premarket trading as investors looked forward to a new era of transparency.

    "This supports our view that GOOGL has entered a new era of shareholder friendliness," said MKM Partners analyst Rob Sanderson, who rates the stock "buy."

    Still, Google didn't say what details would be disclosed.

    "Should Google move to 'segment reporting' as referenced in its filing, we would expect to get revenues and expenses for the core and non-core businesses, which should help bring clarity to any profitability drag caused by its non-core assets and their trajectory," said Goldman Sachs (GS) analyst Heather Bellini, who has a "neutral" rating on the stock.

    J.P. Morgan (JPM) analysts said fuller disclosure could make the market more accepting of Google's heavy non-core investments.

    Some analysts also expect the split to mark the start of a more aggressive approach to expense management.

    At least 14 brokerages reiterated their top ratings on the stock while Mizuho Securities raised its rating to "buy" from "neutral" and Stifel Nicolaus to "buy" from "hold."

    Several analysts likened Google's decision to break into two reporting entities to Amazon.com's (AMZN) move to start reporting revenue from its cloud-computing unit.

    Amazon's shares have risen by about a third since the company first broke out results for the cloud business in its first-quarter results in April.

    "Similar to Amazon's share price moves in anticipation of and subsequent to the separate disclosure of its AWS segment, we believe this change sets up Google shares well as investors will now have more clarity around the core Google business' profitability and growth of some of its longer-term investments," Stifel analyst Scott Devitt said.

    Of 50 analysts covering Google, 43 have a "buy" or higher rating on the stock and seven rate it "hold." The median price target is $750.

     

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    Economy GDP
    Lynne Sladky/AP
    By Lucia Mutikani

    WASHINGTON -- U.S. nonfarm productivity rebounded in the second quarter, but a weak underlying trend suggested inflation could pick up more quickly than economists have anticipated.

    Productivity increased at a 1.3 percent annual rate in the April-June period, the Labor Department said Tuesday. But productivity, which measures hourly output per worker, rose only 0.3 percent from a year ago.

    In line with annual revisions to gross domestic product published last week, first quarter productivity was revised to show it falling at a 1.1 percent rate instead of the previously reported 3.1 percent pace of decline.

    What it means is that inflation could be more problematic down the road, but we haven't seen it yet.

    "What it means is that inflation could be more problematic down the road, but we haven't seen it yet. It's something to think about long term," said Gennadiy Goldberg, an economist at TD Securities in New York.

    Productivity is one of the metrics the Federal Reserve is watching as it contemplates raising interest rates for the first time in nearly a decade. Economists had forecast productivity rising at a 1.6 percent rate in the second quarter. The economy grew at a 2.3 percent annual pace in period.

    Longer-term U.S. Treasuries trimmed price gains after the data, while U.S. stock index futures were trading lower. The dollar fell against a basket of currencies.

    Annual revisions showed productivity was unchanged in 2013, the weakest annual reading since 1982. Productivity in 2013 was previously reported to have increased at a 1.2 percent rate.

    The average annual rate of productivity growth from 2007 to 2014 was revised down to 1.3 percent per year from 1.4 percent, well below the long-term rate of 2.2 percent per year from 1947 to 2014.

    Ouput Gap

    Growth in productivity is an important determinant of the economy's non-inflationary speed limit. The downward revisions suggested the economy's growth potential could be lower than the 1.5 to 2 percent pace that economists have been estimating.

    That would imply the spare capacity in the economy is being squeezed out more quickly than thought and that inflation pressures may take hold a little bit faster than had been anticipated.

    "We are growing much faster versus potential than we had previously thought. So the output gap over the more recent time frame looks like it is closing at a faster rate than we had thought prior to GDP benchmark revisions," said Jacob Oubina, senior U.S. economist at RBC Capital Markets in New York.

    "The faster you close the output gap, the faster you get to that threshold where you start to see inflationary pressures."

    But for now, inflation remains benign. Unit labor costs, the price of labor per single unit of output, rose at only a 0.5 percent rate in the second quarter after advancing at a downwardly revised 2.3 percent pace in the first quarter.

    They were previously reported to have increased at a 6.7 percent rate in the January-March period. Unit labor costs rose 2.1 percent compared to the second quarter of 2014.

    Compensation an hour increased at a 1.8 percent rate in the second quarter after rising at a downwardly revised 1.1 percent pace in the first quarter.

    Compensation was previously reported to have increased at a 3.3 percent rate in the first quarter. It was up 2.4 percent compared to the second quarter of 2014.

     

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    Save on Back to School Supplies
    The final weeks of summer are here, and that means it's back-to-school season. Unfortunately, it can also mean more money out of your budget. Luckily, you don't have to pull an all-nighter to learn how to save a few bucks.

    To start, check your supply closet. You might be surprised to find you have plenty of school supplies lying around already. Take what you find and simply gather them in a central location. Then make a list of what you have. This way, when you go to the store, you won't waste money on things you don't need.

    Next, when it comes to timing, waiting a little can pay off big. Since most people will rush out to buy in August, but if you can hold out until September, you can find discounts of up to 75 percent off. Try waiting to buy that new backpack for just a few more months.

    One last place to get more school supplies for less is at the dollar store. You'll find a lot things like pens, pencils and even tissues at super low prices, so go ahead and stock up for the whole school year.

    As we head into back to school season, remember these tips. They'll help you can ace the back-to-school season without failing your budget.

    View Poll

     

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    Burger King Chicken Fries
    JeepersMedia/Flickr
    By CANDICE CHOI

    NEW YORK -- Fans of Burger King's chicken fries may have the boy band One Direction and the website BuzzFeed to thank for the return of the skinny fried sticks.

    At an event to hype a spicy version of the chicken fries coming out this week, Burger King said it decided to resurrect the fries last year after seeing the enthusiasm they generated on social media.

    Eric Hirschhorn, chief marketing officer for Burger King North America, said the company noticed a spike in chicken fry mentions in January 2014 that was traced to a BuzzFeed post titled "35 Foods From Your Childhood That Are Extinct Now."

    One of the items on the list was chicken fries, which Burger King sold between 2005 and 2012.

    A few months later, Hirschhorn says there was an even bigger surge when a One Direction member mentioned them. The company pointed to a tweet by Liam Payne that reads: "I'm so fulllllll!!! Think I just ate my body weight in chicken fries and sides owwwwww."

    The tweet -- which has more than 94,000 retweets -- is confusing because Burger King hadn't yet brought back chicken fries. That raises the possibility that Payne just left out a comma, and meant to say he ate chicken and fries -- not chicken fries.

    A preceding tweet also made it appear that Payne was eating at KFC, noted business news outlet Entrepreneur. That tweet included an image of Colonel Sanders and the words "the kernel god bless you and your original recipe."

    A representative for Payne said the singer wasn't available for comment. A Burger King representative said in an email: "Whatever he meant, it certainly helped catapult 'Chicken Fries' into pop culture consciousness as a follow up to the BuzzFeed story."

    Even if Burger King misinterpreted Payne's tweet, it worked out for the company. The return of chicken fries as a limited-time offer last summer was successful enough that Burger King added them to its permanent menu this March. A nine-piece box costs around $3.

    Hirschhorn said people tend to get them as an extra, which drives up the amount people spend. Last month, Burger King's parent company Restaurant Brands International said sales rose 7.9 percent at established stores in the U.S. and Canada for the latest quarter.

    Burger King may have brought back chicken fries even without the social media encouragement.

    Since being taken over by investment firm 3G Capital, the chain has leaned heavily on its past for ideas. In addition the King and Subservient Chicken characters, it has resurrected its Big King sandwich and Yumbo ham sandwich.


     

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    pasadena  ca usa   september 1  ...
    Shutterstock
    DETROIT -- Discount Tire and America's Tire chains are recalling nearly 80,000 light truck and SUV replacement tires because the tread can separate.

    The recall affects certain Pathfinder tires made between August 2013 and May 2015. Affected tires weren't sold after May 19.

    Discount Tire says it noticed premature separations on Pathfinder tires in February and started testing them. It found that the rubber coating between the two steel belts in the tire wasn't thick enough. If the steel belts crack, the tread could separate, increasing the risk of a crash.

    Discount Tire says there are no reports of deaths or injuries due to the defect.

    Stores will notify owners and will either replace the tires for free or offer refunds.

    The National Highway Traffic Safety Administration posted the recall Tuesday.

     

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    A poster board detailing an insider trading scam involving hacking is displayed at the start of a news conference in Newark, N.J., Tuesday, Aug. 11, 2015. An international group of hackers and stock traders made $30 million by breaking into the computers of newswire services that put out corporate press releases and trading on the information before it was made public, federal prosecutors said Tuesday. (AP Photo/Seth Wenig)
    Seth Wenig/APA poster board detailing an insider trading scam involving hacking is displayed Tuesday at a news conference in Newark, N.J.
    By DAVID PORTER

    NEWARK, N.J. -- An international web of hackers and traders was charged by U.S. authorities Tuesday with making $100 million by breaking into the computers of business newswire services, reading corporate press releases before they came out, and then trading on that information ahead of the pack on Wall Street.

    Federal authorities said it was the biggest scheme of its kind ever prosecuted, and one that demonstrated yet another way in which the financial world is vulnerable to cybercrime.

    Nine people in the U.S. and Ukraine were indicted on federal criminal charges, including securities fraud, computer fraud and conspiracy. And the U.S. Securities and Exchange Commission brought related civil charges against the nine plus 23 other individuals and companies.

    The case "illustrates the risks posed for our global markets by today's sophisticated hackers," SEC chief Mary Jo White said. "Today's international case is unprecedented in terms of the scope of the hacking at issue, the number of traders involved, the number of securities unlawfully traded and the amount of profits generated."

    The nine charged with criminal offenses include two people described as Ukrainian computer hackers and six stock traders, all but one of them in the United States. Prosecutors said the defendants made $30 million from their part of the scheme.

    At the same time, the SEC brought a lawsuit that lays out a sprawling network of hackers and traders stretching from the U.S. to Russia and Ukraine, France, Malta and Cyprus, all accused of using the stolen advance information to make illegal trades.

    Hacking Releases

    Authorities said that starting in 2010 and continuing as recently as May, the hackers gained access to more than 150,000 news releases that were about to be issued by Marketwired of Toronto; PR Newswire in New York; and Business Wire of San Francisco. The news releases contained earnings figures and other information from a multitude of corporations.

    The defendants then used roughly 800 of those news releases to make trades before the information came out, exploiting a time gap ranging from hours to three days, prosecutors said.

    This is the story of a traditional securities fraud scheme with a twist.

    In one day in 2013, for example, the group traded more than 75,000 shares of Panera Bread (PNRA) stock in a little over an hour and made $900,000, authorities said.

    A strong earnings report or other positive news can cause a company's stock to rise, while disappointing news can make it fall. The conspirators typically used the advance information to buy stock options, which are essentially a bet on the direction in which a stock will move, authorities said.

    The hackers were paid based on how much profit the traders made, prosecutors alleged.

    "This is the story of a traditional securities fraud scheme with a twist -- one that employed a contemporary approach to a conventional crime," said Diego Rodriguez, head of the FBI's New York office.

    Five defendants were arrested Tuesday, and arrest warrants were issued for four in Ukraine.

    'Relentless and Patient'

    Paul Fishman, U.S. attorney for New Jersey, said the case exemplified the "intersection of hacking and securities fraud" and called the defendants "relentless and patient."

    At various times, the indictment alleges, the hackers were locked out of the news services' computer systems. According to Fishman, they eventually managed to get back in, often using simple "phishing," or sending bogus emails with links that, if clicked on, can eventually lead a hacker to a computer user's login and password.

    The thefts show how hackers are expanding their efforts beyond typical moneymaking information such as credit card and Social Security numbers.

    It's also another example of how companies are often at the mercy of those they do business with. Many major hackings have been pulled off through third-party companies that have access to sensitive information.

    Business Wire said it has hired a cybersecurity firm to test its systems and make sure they are secure. Marketwired and PR Newswire didn't immediately return emails seeking comment.

    The hacker group made more than $600,000 by trading the stock of Peoria, Illinois-based Caterpillar (CAT) in 2011 using a news release that said the company's third-quarter profits had climbed 27 percent, according to the indictment.

    Similarly, the group made more than $1.4 million trading stock in San Jose, California-based Align Technology (ALGN) in 2013 ahead of a press release that said annual revenue was up more than 20 percent, the indictment said.

    The most serious charges in the indictment, wire fraud and securities fraud, carry up to 20 years in prison.

    The SEC lawsuit named 17 individuals living in the U.S., Russia and Ukraine, and 15 companies in Georgia, Pennsylvania, Russia, France, Cyprus and Malta. The SEC is seeking unspecified fines and restitution against the 32 defendants.

    -Associated Press writers Bree Fowler and Joseph Pisani, in New York, and AP business writer Marcy Gordon, in Washington, contributed to this story.

     

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    Financial Markets Wall Street
    Richard Drew/AP
    By Caroline Valetkevitch

    NEW YORK -- U.S. stocks fell Tuesday as China's surprise devaluation of the yuan currency hit companies with a big exposure to the country and added to worries about the global economic outlook.

    Apple fell 5.2 percent to $113.54 in its biggest daily percentage decline since late January 2014, and the stock was the biggest drag on all three major indexes. Jefferies raised concerns about the demand for the iPhone, primarily in China.

    Obviously this devaluation seems to suggest there's a lot of weakness, and we're in thinly traded markets right now.

    Among other companies with a big exposure to China, Caterpillar (CAT) was down 2.6 percent at $78.04. Yum Brands (YUM) fell 4.9 percent to $83.54. General Motors (GM) shares fell 3.5 percent to $30.83, though it said the devaluation of the yuan would have a "limited and manageable" impact on its business.

    The currency move by the world's top metals consumer pushed copper and aluminum to six-year lows, and the S&P materials index dropped 1.9 percent, leading sector declines for the S&P 500. Freeport-McMoRan dropped 12.3 percent to $10.22.

    "Obviously this devaluation seems to suggest there's a lot of weakness, and we're in thinly traded markets right now," said Eric Kuby, chief investment officer at North Star Investment Management in Chicago.

    "To a certain extent, the stocks that have propped up the market this year have slowly fallen out of favor, so I think that you're seeing a little bit of a flight to safety."

    The Dow Jones industrial average (^DJI) fell 212.33 points, or 1.2 percent, to 17,402.84, the Standard & Poor's 500 index (^GSPC) lost 20.11 points, or 1 percent, to 2,084.07 and the Nasdaq composite (^IXIC) dropped 65.01 points, or 1.3 percent, to 5,036.79.

    'One-Off Depreciation'

    The yuan fell to its lowest against the dollar in almost three years following what China's central bank described as a "one-off depreciation."

    Alibaba (BABA) shares fell 3.9 percent $77.34.

    The day's stock market declines followed a rally Monday that gave the S&P 500 its biggest increase since May.

    Google (GOOG) rose 4.3 percent to $660.78 after it said it would overhaul its operating structure. The stock gave the biggest support to the Nasdaq and the S&P 500.

    Declining issues outnumbered advancing ones on the NYSE by 1,932 to 1,152, for a 1.68-to-1 ratio; on the Nasdaq, 1,967 issues fell and 848 advanced, for a 2.32-to-1 ratio favoring decliners. The S&P 500 posted 10 new 52-week highs and 17 new lows; the Nasdaq recorded 40 new highs and 104 new lows.

    -Sweta Singh contributed reporting from Bangalore.

    What to watch Wednesday:
    • The Labor Department releases job openings and labor turnover survey for June at 10 a.m. Eastern time.
    • The Treasury Department releases federal budget for July at 2 p.m.
    Earnings Season
    These selected companies are scheduled to release quarterly financial results.

     

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    dollars
    Getty ImagesKeep more cash in your wallet when you use online tools like the BillGuard app and search social media for the best travel and retail deals.
    By Kimberly Palmer

    Whether you track every penny you spend or can't remember your last purchase, there are always ways to improve your spending habits. Being more in control of when and how you spend can help cut overall costs, which means more money can go toward savings and other goals. The strategies below are designed to help you exert greater control over your​ finances.

    1. Make use of comparison apps for smarter shopping. Apps such as RedLaser, PriceGrabber and RetailMeNot allow you to easily compare prices and store coupons. You don't even have to worry about organizing and carrying around paper coupons; just hold up your smartphone at the register to scan stored codes. If you shop online a lot, also consider PriceBlink, a browser add-on that lets you know if there's a lower price elsewhere on the Web. Other useful tools include Coupons.com, the Favado app and Slickdeals, which is both a website and an app.

    2. Use online tools to manage money. If you want new ways to track your money, technology is here to help. For example, the BillGuard app makes it easy to stay on top of bills and be aware of any potential fraud. Key Ring stores all of your loyalty card information so you can leave the stack of plastic at home. Mint shows you where your money is going and helps you stay on budget with reminders and suggestions.

    3. Sign up for recall alerts. Since the federal government issues hundreds of recalls each year, it can be hard for consumers to keep track of them all -- and get their money back for faulty products. Sign up for alerts at recalls.gov or cpsc.gov so you can make sure the products you have around your house are safe, and get refunds or replacement products when they're not.

    4. Talk to companies on Twitter. If you feel like you got a bad deal on a product because it broke shortly after you took it home or it just isn't performing the way you expected, consider communicating your displeasure over Twitter. It might be a way to get a refund or replacement more quickly. Banks, cable companies and other service providers are ramping up their Twitter accounts. Sometimes, the easiest way to lodge a complaint or get attention for a problem is by tweeting at the company in question. Any personal information or details should be restricted to direct messages or taken offline, but Twitter can be a good place to start.

    5. Let social media lead you to the best deals. Companies are increasingly interacting with consumers on Twitter and other social media platforms, which means you can often find the best deals there, too. Retailers often release discounts to their fans and followers first.

    To avoid overcrowding your Twitter account, consider creating a separate account dedicated to following retailers, so you can stay on top of upcoming sales. This strategy also works well for cutting travel costs, since many airlines post last-minute discounts on Twitter. You can always ignore the stream when you're not in shopping mode.

    6. Embrace online fundraising. Kickstarter lets people launch creative projects online and collect funds for them. Successful fundraisers often rely on social media to help drum up support for their idea, and many seek relatively modest amounts (most projects aim to raise less than $10,000). If you're looking for a way to fund a specific goal that you think can generate public support, like traveling to volunteer overseas, then it could be a great place to start working toward that savings goal without putting the rest of your budget at risk.

    7. Buy and sell online. Craigslist, eBay and clothing exchange sites like Tradesy make it easy to sell your unwanted items. You can make extra cash and also buy gently used items at a discount. PayPal can facilitate the payment process when you're not making the exchange in person.

    8. Avoid Facebook-fueled spending. It's easy to see photos on Facebook and think all your friends are indulging in five-star meals and trips to exotic locations, but if you let those selfies influence your behavior, you could end up spending far more than your budget allows. Instead, plan activities with friends that don't cost a lot, such as potlucks and game nights.

    Kimberly Palmer is a senior editor for U.S. News Money. She is the author of the new book, "The Economy of You." You can follow her on Twitter @alphaconsumer, circle her on Google Plus or email her at kpalmer@usnews.com.

     

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    Netflix Inc. Illustrations Ahead Of Earnings Figures
    Andrew Harrer/Bloomberg via Getty Images
    There's a lot of streaming going on at Netflix (NFLX) these days. It's serving up roughly 4 billion hours of content a month to its video-hungry audience that now stands at 65.5 million subscribers worldwide.

    The same can't be said about its original mail-order business. Sending DVD and Blu-ray discs in signature red envelope mailers peaked when Netflix was servicing roughly 20 million accounts five years ago, but it's been slipping ever since. Netflix disc plans are down now to just 5.3 million subscribers, just 8 percent of its streaming base.

    This doesn't mean that Netflix will stop mailing out discs anytime soon. Let's go over a few reasons that the leading premium streaming video platform will keep mailing out DVDs and Blu-rays to its thinning audience.

    1. DVDs by mail remain very profitable. Netflix may have seen demand for discs decline -- its subscriber base has fallen to 5.3 million from 6.3 million during the past year alone -- but its DVD-by-mail business was still good for a contribution profit of $77.9 million in its latest quarter. That may be a lot less than the $340 million contribution profit it generated during the same three months from its domestic streaming platform, but it's still higher than streaming on a per-subscriber basis.

    It may be a shrinking base, but it's not broken. It's still making money, and there's no reason to close that down.

    2. Discs are a gateway drug. A lot of people are still renting physical media. Outerwall's (OUTR) Redbox lets TV buffs rent out 146 million discs during the second quarter. As pervasive as Netflix may be, just a third of the homes in the U.S. are currently subscribers.

    As for the rest of the country, some have tried it and moved on. Some just don't have the broadband capacity to stream effectively. However, for those still relying on their DVD players for entertainment, offering this platform is a good way to attract homes that will eventually migrate to the larger streaming service.

    3. There are still plenty of voids in streaming. As massive as Netflix's digital catalog gets -- and it grows along with its subscriber base -- it will never have every single DVD release on its streaming service. Studios want too much for newer releases, and rival services have exclusive streaming rights on other magnetic content.

    That's where DVDs come in. Until Netflix decides to follow the lead of smaller rivals by offering newer releases on a pay-per-stream basis -- and the company appears to have no interest in doing exactly that -- there will continue to be holes in its programming. Netflix can always point to its DVD library for content it doesn't have available to stream.

    4. Netflix has made big investments in its fulfillment centers. Netflix isn't actively promoting its DVD offering, but it did make a big investment to make its mail-order business more sustainable. Cutting down on the number of distribution centers -- to 33 from a peak of 50 -- has helped cut costs, but the real investment came in automation.

    Netflix originally had people slicing open returned envelopes, checking the discs, and repackaging them for their next journey. Now a machine is able to process five times the volume. This is an investment in innovation and technology that will continue to keep the business profitable even as more customers let it go.

    Motley Fool contributor Rick Munarriz owns shares of Netflix. The Motley Fool recommends and owns shares of Netflix. Try any of our Foolish newsletter services free for 30 days. Check out The Motley Fool's one great stock to buy for 2015 and beyond.

     

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    US-COMPANY-COSTCO
    Karen Bleier, AFP/Getty Images
    Almost nobody likes contending with the hassle and stress of buying a car from a traditional dealership. Unfortunately, given the many legal restrictions on auto sales, there's often little alternative for a car buyer.

    But one option has been growing exponentially popular lately. It's from a source that few would expect to "move metal." But it's been selling a lot of cars, doing so by sticking to its traditional strength of selling goods at attractive prices.

    Believe it or not, this big success on the auto-dealing scene is Costco Wholesale (COST). Let's open the hood and see what would-be car buyers are getting from the retail giant these days.

    An Affinity for Autos

    Although Costco has become a big-time vehicle seller, don't expect to see Fords (F) or Hondas (HMC) crowding the aisles of its stores.

    That's because -- due to those many burdensome legal restrictions -- the big retailer isn't a dealership, and thus is barred from selling vehicles directly. Instead it offers a buying service, Costco Auto Program, for its members.

    This service is managed by an outside specialist company, Affinity Auto Group. Affinity is essentially a middleman between buyers and sellers.

    Costco, with its roughly 80 million members, represents a potentially huge group of purchasers. As a result, the retailer can require that the over 3,000 dealers it transacts with in Affinity's network promise to beat the prices of other sellers.

    Costco, it seems, trusts auto dealers as much as you or I do -- i.e., barely at all. So it manages a network of mystery shoppers to make sure Affinity's sellers follow through on their beat-the-price commitment to the retailer.

    For these reasons, shoppers who do their car buying at Costco can save significant dough. A recent Bloomberg report on the subject cited one example of a 2015 Toyota (TM) Highlander. A Costco customer buying through the service paid around $39,000 for the car, $4,000 or so below the manufacturer's suggested retail price.

    It's not only the low price that attracts buyers to Costco's virtual car lot. Another advantage of purchasing services like the retailer's is that the price is final. In other words, ideally there's no haggling and no negotiating over the number.

    Convenience at a Cost

    Costco built its retail empire by delivering lower prices on a dizzying range of goods. Since the car business operates with opaque pricing and often tricky sales methods, the retailer must have sensed an opportunity to disrupt this traditional but consumer-unfriendly business model.

    Costco's done a fine job growing car sales since launching the service in 1989. In 2014, through its service it sold nearly 400,000 of them. This made it the country's No. 2 vehicle sales point, behind Auto Nation (AN), with 533,000 cars sold.

    That's impressive. But it seems not every one of its methods is customer-friendly. Some users haven't experienced that low-price/no-hassle ideal through the service.

    On the shebuyscars.com blog, for example, several people vented about their experiences in the comments section of a blog post devoted to Costco's auto sales.

    More than one complained that the dealerships found by the service engaged in shady practices. These included forcing customers into disadvantageous financing arrangements and adding unanticipated charges to the final invoice.

    It wasn't only the dealerships that were the target of the complaints. A few said that Costco passed their data along -- without their knowledge -- to certain dealerships.

    Subsequent to that, one reported getting "harassing phone calls and emails on a regular basis from the aggressive dealer reps." Another complained that a selected dealership "immediately started calling us."

    "Really, Costco?" wrote another. "Is that how you should treat your customers' personal data?"

    Driven to Buy

    At the end of the day, thanks to the many often-ridiculous legal protections afforded them -- guaranteed exclusivity within a given radius, to name but one of many -- there's really no way of fully escaping the nation's car dealers.

    But those Costco complaints aside, the numbers from the retailer's service are growing for a good reason -- consumers are going the extra mile to cut dealerships out of the process as much as they can.

    So it's worthwhile for a would-be buyer to investigate car-buying programs. Costco's is big and powerful, but it's not the only one on the lot. TrueCar (TRUE) is a buying service that has carved out a big slice of the market, while specialty organizations such as AAA operate similar offerings.

    Services like the Costco Auto Program have become a big part of the vehicle sales landscape, and as such might be the source of your next ride. See you on the road!

    Motley Fool contributor Eric Volkman bought the family Honda at a dealership and thinks he could have done better. The Motley Fool recommends Costco Wholesale, Ford and TrueCar and owns shares of Costco Wholesale. Try any of our Foolish newsletter services free for 30 days. Check out our free report on one great stock to buy for 2015 and beyond.

     

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  • 08/11/15--22:00: 7 Great Back-to-School Sales
  • Filed under: , , , ,

    Back to School Shopping At Wal-Mart
    Patrick Fallon/Bloomberg via Getty Images
    By Lori McDaniel

    If the smell of pencils, crayons and paper brings back fond memories of time spent in a classroom, odds are you will enjoy hitting the back-to-school sales. Whether you're buying your own supplies or helping to fulfill a child's list of required items for school, below are some stores that will have everything you need at a great price. To maximize your savings, don't forget to take advantage of tax-free holiday sales, which are offered in 18 states this year.

    Walmart. Walmart has a little bit of everything for those going back to school or college. You'll find clothing, accessories, uniforms, electronics and even computers. However, the best part of back-to-school shopping at Walmart is hitting the supplies aisle. Walmart's Rollback prices on everything from three-ring binders to scientific calculators and dry erase markers make the already-low prices an exceptional deal.

    The store also has a handy online school supplies list tool into which you can type your school's name, ZIP code and state, and the tool will pull a list of suggested products to fulfill required items on the list. Shop online and you'll get free shipping on orders more than $35.

    JCPenney. College-bound students should check out JCPenney's dorm shopping checklist to make sure they are fully prepared for dorm life. Then, they can check items off the list by shopping JCPenny's back-to-school sale, which includes as much as 50 percent off items such as XL twin bedding sets with sheets, shower caddies, closet organizers and more.

    Though it may not be the first place that comes to mind for a back-to-school haircut, through Aug. 31 JCPenney is offering something for the little ones: a $10 haircut for kids in grades kindergarten through sixth grade at the in-house salon.

    Speaking of $10, when you purchase $75 in JCPenney e-gift cards through Aug. 15, you'll earn a $10 off $10 coupon, redeemable in stores and online Aug. 16 through Sept. 7.

    Lands' End. New for 2015, Lands' End's backpack guide takes the guesswork out of choosing the right pack for your child. Categorized by age range, bag style, collection, child's height, color and price range, choosing the right bag has never been so easy. Not only are the bags available in a ton of different colors, but they are made of high-quality materials and are outfitted with reinforced straps and other comfort features. Look for coupons to save on your next order and get free shipping when you spend at least $50 online.

    Macy's. For a wide selection of back-to-school apparel, check out Macy's. You'll find clothing to outfit everyone in your family, from preschoolers to college-bound students (and even something for yourself). Macy's also has a wide assortment of accessories and shoes, which makes it a convenient stop. Save as much as 20 percent off your next order with an online coupon.

    Calendar.com. To keep track of the school year and all the events and activities it brings, you'll find great solutions at Calendars.com. Get wall and desk calendars, as well as school organizers and planners to keep everything in order. Best of all, the company is offering 20 percent off any order through Aug. 31, as well as free shipping on orders of at least $30 with an online coupon.

    Lenovo. College students know going to college without some type of computer is less than ideal, and also that budgeting for them can present a challenge. Fortunately, Lenovo has some great tax-free holiday weekend deals, as well as a sale for 15 percent off various ThinkPad laptops - plus free shipping! Save as much as 80 percent on laptops when you shop the clearance section.

    Office Depot. If you're looking to get ink cartridges, school supplies or even something for your home office, Office Depot is offering a great sale, as well as $10 off orders over $50. Through Sept. 26, you can save up to $200 on select HP printers, and all ink and toner will ship for free (no minimum purchase required). Plus, when you spend $150 or more, you'll get a free $20 gift card.

    While shopping, don't forget to look into a store's price-match or price-adjusting policy, and ask if you can reap additional savings by using online or in-store coupons. Here's to finding a great deal for everything on your back-to-school shopping list!

    Lori McDaniel is the senior content manager at Offers.com. She's a wife and mother of two who can't seem to shake her taste for the finer things in life, which means she always is on the hunt for a great deal.

     

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    Putting golden egg in nest
    Getty Images
    By Sarah Morgan

    Most of us have occasionally daydreamed about early retirement. Have you gone a step further, crunching some numbers to figure out how much money you would need and cutting back on your spending so you can max out your savings rate?

    How would early retirement actually work? How would you structure your investments to throw off income for 40 or 50 years? Here are five tips from financial advisers on how to prepare your portfolio for a long retirement:

    1. Be ready to take some risk. If your money needs to last 40 or 50 years, it will have to keep growing after you retire. That means you will need to continue investing somewhat aggressively. The exact balance of stocks versus lower-risk investments will depend on your age and risk tolerance, but investment professionals recommend keeping a minimum of 50 percent of your portfolio in stocks, and some advise 70 or 80 percent. "The younger you are, the more investment risk you have to take, regardless of what the situation is," says Michael Kresh, CFP, the chief investment officer of Creative Wealth Management. A risk questionnaire, such as the one by investment firm SigFig, can help you determine what portion of your portfolio should be in stocks, given your investment horizon and risk tolerance.

    2. Keep some cash on hand. For younger retirees, financial planners recommend keeping about two years' worth of living expenses in cash or short-term instruments like money market accounts or CDs. "You don't want to get in a position where you're selling into a down market just to maintain your standard of living," Kresh says. Sitting on some cash will allow you to sell chunks of stocks when the market is strong, not when you have to pay the cable bill.

    As for the balance of your portfolio -- whatever isn't in stocks or cash -- the pros recommend shorter-term bonds for now, because interest rates are so low. "Even though the rate is not fair to savers, it's still something to get a safe return and hedge the risk of the equity side of your portfolio," says Mickey Cargile, the president of Cargile Investment Management.

    3. Don't overspend. The general rule of thumb for someone living off an investment portfolio is to keep withdrawals to 4 percent a year. Some experts now say that even that is too high, but it is still a reasonable place to start, Cargile says. "Some years it's going to erode your principal some, and some years it's going to grow much more," he says. "If you can withdraw less early on, that's great," Cargile adds. In those early years in particular, you still want your total portfolio to be growing faster than you are spending it.

    4. Watch out for friends with investment ideas. This is a common trap for people who are successful early in life, Kresh says: A friend or family member approaches them with a supposedly can't-miss investment or business idea, and, overconfident because of that early success, they put too much money behind a risky venture. "You think because you've been successful early that you can understand other businesses that you have not been involved in," Kresh says. Even a large nest egg won't last a lifetime if you start throwing money at ill-advised schemes.

    5. Find something to do. Investment managers say that being emotionally prepared for retirement is a challenge for their clients at any age -- and one that often takes people by surprise. "I think as human beings we weren't meant to sit around and watch Jeopardy for 30 years," Cargile says. Idleness may appeal now, when you are stuck in an office, but people who work with retirees say the ones who enjoy their retirement find a purpose for all that free time. "You need to have something to get up for," says Roger Streit, a certified financial planner with Key Financial Solutions. Volunteering for an organization or cause you are passionate about is one good option, Streit says. "I think it definitely helps to have a cause, to be involved in giving back," he says.

    Retiring at 40 may be nothing more than a pipe dream for most of us, but even those of us who don't plan to retire early should plan for a long retirement. If you stop working at the traditional retirement age of 65, investment managers say you should plan to make your money last about 30 years. That may mean you will need to work, or work part-time, longer -- or take some of the tips we just shared.

    Sarah Morgan is a contributing writer at SigFig. Nearly a million people use SigFig to track, improve and manage over $300 billion in investments.

     

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    Kraft Heinz Layoffs
    Toby Talbot/AP
    By CANDICE CHOI

    NEW YORK -- Kraft Heinz says it is cutting about 2,500 jobs as part of its plan to slash costs after the food companies combined.

    Spokesman Michael Mullen says affected workers are in the U.S. and Canada and were to be notified in person. About 700 of the cuts were coming in Northfield, Illinois, where Kraft had been headquartered.

    The company wouldn't specify where other cuts were taking place but said that all the jobs were salaried. It said none of the job cuts involved factory workers.

    The Kraft Heinz Co. (KHC) said it had a total of around 46,600 employees before the cuts. That included about 1,900 in Northfield.

    The job cuts aren't surprising, given the reputation of the company's management on Wall Street.

    The combination of Pittsburgh-based Heinz and Kraft earlier this year was engineered by Warren Buffett's Berkshire Hathaway (BRK-B) and Brazilian investment firm 3G Capital, which has become known for its tight cost controls.

    Bernardo Hees -- a 3G partner -- is CEO of the merged Kraft Heinz.

    Hees had already overseen cost-cutting at Heinz since the ketchup maker was taken over in 2013 in a prior partnership between 3G and Berkshire. That means the cuts announced Wednesday mostly affect people on the Kraft side of the business.

    Together, the two U.S. food giants own brands including Jell-O, Heinz baked beans and Velveeta that are facing sales challenges amid changing tastes. Their combination was nevertheless seen as attractive because of the opportunity to combine functions like manufacturing and distribution.

    Executives say they expect to save $1.5 billion in annual costs by 2017.

    In a statement, Mullen said Wednesday the job cuts are part of the company's process of integrating the two businesses and "designing our new organization."

    "This new structure eliminates duplication to enable faster decision-making, increased accountability and accelerated growth," Mullen said. He said the savings will free up money to be invested back into the company's products.

    Affected employees, who worked in jobs such as sales, marketing and finance, will be given severance benefits of at least six months, Mullen said.

    Already, Kraft Heinz had been belt-tightening in recent weeks.

    In a memo to employees dated July 13, Hees outlined a variety of "provisional measures" the company was taking to avoid unnecessary spending. That included instructing workers to print on both sides of paper, reuse office supplies like binders and file folders, and turn off computers before leaving the office.

    Corporate donations to charities also had to be approved, as did memberships in industry associations, the memo said.

    At its office in Northfield, the company also stopped providing free Kraft snacks like Jell-O.

     

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    Job Openings
    Alan Diaz/AP
    By CHRISTOPHER S. RUGABER

    WASHINGTON -- U.S. employers filled more of their available jobs in June, evidence that steady if modest economic growth is putting more Americans to work.

    The Labor Department said Wednesday that total hiring rose 2.3 percent to 5.18 million in June, the most in six months and second-highest total since the recession ended in June 2009.

    Employers posted fewer job openings, but that figure has risen strongly in the past year. And more people quit their jobs, which is a good sign because many people quit when they have new jobs lined up, typically at higher pay. More hiring, quitting and healthy levels of job openings could pressure companies to lift wages.

    Hiring and quits "remain at levels consistent with a pickup in wage growth over the medium-term," said Jeremy Schwartz, an analyst at Credit Suisse (CS). "Indeed, this is a key reason to believe recent weakness in average hourly earnings ... may be temporary."

    Job gains have been strong for the past two years but sluggish pay increases remain a weak spot in the economy.

    Average hourly pay rose just 2.1 percent in July compared with a year earlier, the government said last week. That is far below the 3.5 percent to 4 percent gains that usually occur in a healthy economy.

    The number of available jobs fell 2 percent in June to 5.25 million, down from a 15-year high of 5.36 million in May. Still, openings have soared 11 percent in the past year. The rise is a sign that companies are confident that demand for their goods and services will pick up and that they need more workers to meet that demand.

    Yet hiring has increased at a slower pace, rising just 7.4 percent in the past year. That has been a source of frustration for many job-seekers, who are facing increasingly long periods after they apply for jobs before companies make offers.

    According to Glassdoor, a jobs and recruiting website, the average length of time for an interview process to result in a filled job increased from 12.6 days in 2010 to 22.9 days last year.

    Extended Interview Times

    The increased use of background checks, skills tests and more extensive interviews have combined to lengthen the hiring process, according to Glassdoor research released in June. The increase in high-skill jobs involving information technology in recent years has also extended interview times. Those jobs take longer to fill than lower-skill positions.

    The pickup in hiring in June, however, suggests that companies may be filling jobs a bit more quickly. A new Glassdoor report released Wednesday found that even as hiring times have lengthened, job-seekers who land interviews are more likely to receive job offers. The report found that 68 percent of interviews resulted in a job offer in 2014, up from 56 percent in 2009.

    Separately, the number of Americans quitting their jobs inched up 0.6 percent to 2.75 million. That is below the seven-year high of 2.78 million reached in January.

    The government said in last week's monthly employment report that employers added a solid 215,000 jobs in July. The unemployment rate was unchanged at 5.3 percent.

    Those figures are a net total: Jobs gained minus jobs lost. The data reported Wednesday, in the Job Openings and Labor Turnover survey, are more detailed. They calculate total hires, as well as quits and layoffs. Wednesday's JOLTS data contain figures for June, a month behind last week's jobs report.

     

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    Inexpensive (or Free!) Campsites
    With a little pre-planning, your next tent situation, doesn't have to be a tense situation for your wallet. It's easy, and all you need to do is go online.

    At ReserveAmerica.com you can compare different campground fees to find the right deal for you. The site also offers free guides for nearby attractions to help you save time along with your money.

    Also, if you think nightly fees can go take a hike, check out FreeCampgrounds.com. Keep in mind, though, that most have few amenities, so things like electricity or bathroom facilities are not guaranteed.

    Heading out on a camping trip? Remember that doing a little research online can take your budget a long way on your next great outdoor adventure.

    View Poll


     

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    Financial Markets Wall Street
    Richard Drew/AP
    By Caroline Valetkevitch

    NEW YORK -- U.S. stocks rebounded in afternoon trading Wednesday to end little changed as energy shares and Apple rebounded, offsetting continued concerns about a slowdown in China.

    Investors picked up shares of energy companies, which have been hit hard by the China concerns along with other commodities in recent weeks, as oil prices bounced back. The S&P energy index rose 1.9 percent, the S&P 500's biggest positive.

    Apple (AAPL), for which China is a key market, also reversed course after falling more than 3 percent earlier to its lowest since January. It ended up 1.5 percent at $115.24 and was the biggest positive factor for all three major indexes.

    Stocks had been down sharply early in the session after the yuan hit a four-year low, falling for a second day after Chinese authorities devalued the currency. The move has exacerbated worries about the outlook for China's economy and its impact on the rest of the world.

    The Dow moved nearly 300 points from its low of the day to its high before closing flat.

    The S&P 500 briefly slipped into negative territory for the year during the session, and traded below its 200-day moving average, before bouncing back. The S&P 500 ended above that technical support level and up for the year so far.

    "China is a huge wild card both in terms of the rate at which it's slowing but also how the leadership is handling it," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

    "The reversal today is bullish ... at least in the short term."

    Among sectors, financial shares declined the most, with the S&P financial index down 0.8 percent. China's currency move has created more uncertainty over how soon the Federal Reserve may raise interest rates, analysts said.

    The Dow Jones industrial average (^DJI) fell 0.33 points to 17,402.51, the Standard & Poor's 500 index (^GSPC) gained 1.98 points, or 0.1 percent, to 2,086.05 and the Nasdaq composite (^IXIC) added 7.60 points, or 0.2 percent, to 5,044.39.

    The CBOE Volatility index, a measure of the premium traders are willing to pay for protection against a drop in the S&P 500, also reversed course. It jumped as much as 18.7 percent to 16.28, its highest in a month, before ending down 0.7 percent.

    Huge Implications

    New York Federal Reserve President William Dudley said the yuan devaluation has huge implications for demand in the rest of the world and commodity prices, but it is too early to judge what is happening with Chinese currency policy.

    Alibaba (BABA) was down 5.1 percent at $73.38 after hitting an all-time low of $71.03 after revenue growth slowed at China's biggest e-commerce company. Yahoo (YHOO), which has a 15-percent stake in Alibaba, fell 4.3 percent to $34.49.

    Macy's (M) fell 5.1 percent to $64.11 after it also reported weak quarterly sales.

    NYSE decliners outnumbered advancers 1,553 to 1,524, for a 1.02-to-1 ratio; on the Nasdaq, 1,564 issues fell and 1,229 advanced for a 1.27-to-1 ratio.

    The S&P 500 posted 10 new 52-week highs and 19 lows; the Nasdaq recorded 30 new highs and 120 lows. About 8.2 billion shares changed hands on U.S. exchanges, above the 7.0 billion daily average so far this month, according to BATS Global Markets.

    -Tanya Agrawal contributed reporting from Bangalore.

    What to watch Thursday:
    • At 8:30 a.m. Eastern time, the Commerce Department releases retail sales data for July, and the Labor Department releases import and export prices as well as weekly jobless claims.
    • At 10 a.m., the Commerce Department releases business inventories for June, and Freddie Mac releases weekly mortgage rates.
    Earnings Season
    These selected companies are scheduled to release quarterly financial results:
    • Advance Auto Parts (AAP)
    • Applied Materials (AMAT)
    • Coty (COTY)
    • King Digital Entertainment (KING)
    • Kohl's (KSS)
    • Nordstrom (JWN)
    • Tribune Media (TRCO)

     

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    GOP 2016 Trump
    Carlos Osorio/APRepublican presidential candidate Donald Trump addresses a GOP fundraising event in Birch Run, Mich.

    I wouldn't bet on a Donald Trump presidency. Still, it's interesting to see where Trump's wealth would stack up compared to the wealth of historical Presidents. As the election season revs us, there's a lot of yammering about money in politics. People are concerned about the price candidates are paid for speeches, the vast contributions made by corporations, and the net worth of some of our more colorful candidates.

    Yes, Donald Trump is certainly high on the hog, compared to the rest of the candidates in the race for the Republican nomination. Experts peg Trump's net worth $4 billion, but "The Donald" himself claims it's more than $10 billion. Whichever the case, the only historical candidate who can claim this level of fortune is Ross Perot, who ran in 1992 and 1996.

    Whatever Trump is worth, the rest of the candidates simply aren't in his league. The second wealthiest candidate is Carly Fiorina, with a net worth of about $80 million. Hillary Clinton is a distant third, at about $15 million. At the low end of the scale, we have Democrat Bernie Sanders, with a mere $500,000.

    The media tends to attach moral value to wealth and poverty. Depending on who you talk to, Trump is an embodiment of the American Dream or a bloviating oligarch. Whatever the reality, a President Donald Trump (startling as the thought may be) would be the wealthiest president in U.S. history. But he wouldn't be the wealthiest by the margin you might be imagining. Certain heads of state, recent and from long ago, have trailed not so far behind Trump in terms of personal wealth.

    Early U.S. Presidents

    Our earliest presidents were usually men of property. In fact, it wasn't until 1853, when Franklin Pierce took office, that the United States had a head of state who wouldn't at least be a millionaire today. Leaders such as George Washington and Thomas Jefferson owned sprawling estates, had slaves and purchased vast acreage to farm and develop as they pleased. Adjusted for inflation, Washington's wealth and assets would total more than half a billion dollars today, making him our second wealthiest president. Behind him are Thomas Jefferson, Theodore Roosevelt and Andrew Jackson, each worth $212 million, $125 million and $119 million, respectively.

    Later Presidents

    Most of the presidents who served from the 1860s to the late 1920s were among the nation's poorest. Lincoln would have been middle class today, as would have Andrew Johnson, Ulysses S. Grant and Calvin Coolidge. So who was the poorest president of all time? It's not truly known, but Harry Truman probably finds the bottom of our list.

    Who Was the Wealthiest?

    Without question, John F. Kennedy was the wealthiest U.S. president ever to serve, with a net worth of up to $1 billion. By some figures, George Washington may have had more in terms of property. But no other president could touch JFK's monetary wealth, though, Trump, were he elected, would top them both.

    It's also interesting to note that Trump, should he be nominated and win, would also be the first U.S. president to hold office having never been a lawyer, elected official or member of the military.

    People at all sides of the political spectrum are scoffing at Trump's chances at even receiving the Republican nomination. But don't overlook the influence that dollars like his can have in a race like this. It's not inconceivable that the list of wealthiest presidents may one day have a new No. 1.

     

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