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DailyFinance.com

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    Financial Markets Wall Street
    Richard Drew/AP
    By Lewis Krauskopf

    NEW YORK -- U.S. stocks edged lower Thursday as investors digested mixed tech and health care earnings a day ahead of Friday's employment report.

    Energy shares dragged more than other sectors as crude prices fell. Qualcomm (QCOM) weighed the most on the S&P 500, falling 15.3 percent to $51.07 after the chipmaker forecast first-quarter profit below expectations. Biotech Celgene (CELG) fell 5.3 percent to $120.46 after its quarterly revenue missed targets.

    Overall declines were limited by a rise in Facebook shares following the social media company's strong quarterly results, and a 0.4 percent gain in the financial sector. Facebook (FB) shares jumped 4.6 percent to $108.76.

    Investors were looking to Friday's nonfarm payrolls report as they gauge whether the Federal Reserve will raise interest rates in December.

    "This is a big piece of data as to what the Fed is looking for," said Scott Colyer, chief executive officer of Advisors Asset Management in Monument, Colorado. "I think everybody wants them to move or not move. The month-to-month stuff is killing everybody."

    The Dow Jones industrial average (^DJI) fell 4.15 points, or 0.02 percent, to 17,863.43, the Standard & Poor's 500 index (^GSPC) lost 2.38 points, or 0.1 percent, to 2,099.93 and the Nasdaq composite (^IXIC) dropped 14.74 points, or 0.3 percent, to 5,127.74.

    The declines paused a rally that took shape in October, the best monthly performance for major stock indexes in four years.

    "We have had in the past month ... a very strong market, a very sharp rebound, and I think that's also probably causing some profit taking more than you might expect from the news that's out there," said Tim Ghriskey, chief investment officer of Solaris Asset Management in New York.

    Seven of the 10 major S&P sectors finished lower. The S&P energy sector fell 1 percent, with Chevron (CVX) off 2.3 percent to $94.55 and Exxon Mobil (XOM) down 1.4 percent at $84.81.

    The utilities group dropped 0.8 percent and materials declined 0.5 percent.

    The S&P health care sector fell 0.4 percent, weighed down by Celgene's results.

    Drug Price Probe

    A U.S. Senate panel began a probe Wednesday into drug price increases, seeking documents from four drugmakers including Valeant Pharmaceuticals. U.S.-listed Valeant (VRX) shares tumbled 14.4 percent to $78.77 on Thursday.

    The probe hit the entire biotech group and the broader market as well, said Larry Peruzzi, a senior equity trader at Cabrera Capital Markets in Boston.

    HomeAway surged 25.3 percent to $40.15 after Expedia said it would buy the vacation rental site for $3.9 billion. Expedia (EXPE) rose 2.4 percent to $137.40.

    Declining issues outnumbered advancing ones on the NYSE by 1,561 to 1,488, for a 1.05-to-1 ratio on the downside; on the Nasdaq, 1,497 issues fell and 1,283 advanced for a 1.17-to-1 ratio favoring decliners.

    The S&P 500 posted 22 new 52-week highs and 7 new lows; the Nasdaq recorded 94 new highs and 71 new lows.

    About 7.3 billion shares changed hands on U.S. exchanges, compared with the 7 billion daily average for the past 20 trading days, according to Thomson Reuters data.

    -With additional reporting by Sinead Carew and Caroline Valetkevitch in New York and Abhiram Nandakumar in Bangalore, India.

    What to watch Friday:
    • The Labor Department releases employment data for October at 8:30 a.m. Eastern time.
    • The Federal Reserve releases consumer credit data for September at 3 p.m.
    Earnings Season
    These selected companies are scheduled to report quarterly financial results:
    • Berkshire Hathaway (BRK-B)
    • Cigna (CI)
    • Humana (HUM)

     

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    Senior couple using tablet computer at home
    Getty ImagesWith a few adjustments, the home where you raised your children can be an excellent place to retire.
    By Tom Sightings

    The typical retirement dream involves riding off into the sunbelt, golf clubs and beach umbrella in hand. However, the reality is that the majority of retirees never leave home. Most people opt to age in place, or if they do move, they find a smaller house near their old neighborhood.

    Only about 7 percent of older Americans move every year, according to a long-term study by the Center for Retirement Research at Boston College. And even though more people have recently been relocating with the improving economy, an AARP survey found that most people approaching retirement hope to remain in their current residence as long as they can.

    Here's why retirees resist the siren call of the beach and tropical breezes:

    Home is where the heart is. Many people feel attached to their home towns. Whether they grew up there or moved there to raise a family, they still enjoy going to the park where they took their kids as toddlers. They feel comfortable knowing about the best hardware store and the best pizza place. Many old-line suburbs have developed programs and amenities for their older population. Another benefit: urban centers in the north provide better public transportation than the retirement meccas of the sunbelt. There's no subway in San Diego or T in Tampa.

    Home is where your friends are. You go to the library and see familiar faces. Maybe you belong to a book club, or regularly meet friends for lunch, tennis or golf. All the research says that a strong social network is crucial for successful aging. Friends not only supply emotional support, but sometimes offer practical benefits like loaning you a book or DVD, helping with a project at home or giving you a ride. Why should you uproot yourself, move a thousand miles away and then be faced with the sometimes difficult challenge of finding a new group of like-minded friends?

    People retire in the last place they land. Some people never settle down to live in one place for 20 or 30 years to raise their kids in a single community. Many baby boomers have moved around for work, or just because they're restless, and then finally put down roots when they're in their 40s or 50s. For example, my sister-in-law grew up in New Jersey, then moved to Michigan, Texas and finally in her late 40s settled down in Pennsylvania. She's pretty adamant that she's not moving again.

    You don't necessarily save much money. It costs a lot to move. You give up about 10 percent of the selling price of your house in real estate commissions, legal fees and taxes. Then there's the cost of buying, moving and resupplying your new house. If you're moving a long distance there are additional expenses involved in traveling and researching your new location. You might need to rent for a while or store some furniture. It's not worth it if you only save a couple thousand dollars a year in your cost of living.

    It doesn't have to cost a lot to age-proof your home. Of course you can spend a lot of money if you want to remodel your entire house. But many of the safety issues involved in age-proofing a home involve modest expenses. Improve the lighting in stairways and outdoor areas. Change out doorknobs for lever handles that are easier to manipulate. Install bathroom grab bars and raised toilet seats. Get rid of scatter rugs, and put down colorful traction strips on the front edge of your stairs to help prevent falls. None of these changes costs much money. Depending on the layout of your home, it may even be possible to turn a study or den on the first floor into a master suite, converting the upstairs rooms into guest quarters.

    Visit a virtual village. Virtual retirement villages can help seniors access resources to make it easier to age in place. A virtual village is a local non-profit organization that posts information online, providing referrals to member-recommended service companies and volunteers available to help out with dog walking, yard work and other homeowner needs. Some villages host social activities such as concerts, restaurant gatherings and group trips. Check out Village to Village Network to find out more information on what villages do and how they work.

    Tom Sightings blogs at Sightings at 60.

     

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    Millennials Say 'Venmo Me' To Fuel Mobile-Payment Surge
    Andrew Harrer/Bloomberg via Getty ImagesThe trend toward digital payments and away from cash is increasing the need for easy exchanges between friends.
    When Victoria Scipione has to pay back friends after a weekend getaway, she pulls out her phone and uses the Venmo app. Since it's linked to her bank account, she can quickly reimburse them for anything from dinner to Uber. "I'm extremely guilty of not always carrying around cash, and when I go out to dinner with friends we usually split the bill -- that's when Venmo comes in handy," says Scipione, 23, a communications coordinator in New Jersey.

    Venmo is one of the many new tools that make it easier than ever to reimburse friends and family. Choosing the right one for you often comes down to personal preference and needs -- whether you're moving funds domestically or overseas and your reason for sharing money in the first place.
    Scipione says she's drawn to Venmo largely because all her friends have the app, too. "When I think of PayPal, I think of my parents," she says. Her generation, she adds, tends to prefer the social aspect of Venmo, which makes it easy for users to send each other friendly notes about payments, almost like texting. (Venmo is part of PayPal and charges a 3 percent processing fee per credit card and some debit card payments; receiving the funds is free.)

    PayPal is also offering a new-and-improved service, called PayPal.Me​, which launched in September.​ Users can create a personalized link they can share with others to collect payments. Sending money to friends and family within the U.S. is free if it's done using a PayPal balance or bank account. If it's done using a debit or credit card, there is a fee of 2.9 percent plus 30 cents, paid by either the sender or recipient. ​

    People were looking for a quick and easy way to collect money for group payments.

    "People were looking for a quick and easy way to collect money for group payments," says Meron Colbeci,​ senior director for global consumer product management at PayPal. "People find collecting money to be very awkward, and by giving a link right there in the email or text message, it hopefully reduces that awkwardness," he adds. A PayPal Money Habits Study of 4,000 consumers released earlier this year found that, on average, adults owe friends almost $450, but many people said they were afraid to ask for reimbursement because they felt uncomfortable doing so.

    Because of the trend toward digital payments and away from cash, the need for easy exchanges between friends is growing, Colbeci says. "Down the line, cash will be a very small portion of the overall wallet," he adds.

    In September, Google announced the Google Wallet app, which allows users to send money for free to anyone within the U.S. using an email address. While Google is rolling out different features​, the app is currently available on Google Play and the App Store.​

    Blended families exchanging child support payments often have specific needs when it comes to money, and that's where the payment platform SupportPay can help. Founder Sheri Atwood ​says that as the ​child of divorced parents and who is now a single mom, she saw the need for making easier payments. "My parents constantly fought, and it seemed like everything they cared about was about money," she says. She was determined to have a more amicable divorce, but she still found it hard to track the multiple payments and expenses shared between her and her ex-husband. "I was a single mom and now a debt collector," she says -- and that latter role is not one she wanted.

    SupportPay, which is currently used by ​30,000 parents, keeps a record of support agreements as well as payments and receipts. "It's like an expenses management system," she says. It also assures the parent paying child support that the money goes toward the child's expenses and not the other parent's lifestyle. SupportPay, which has a free version as well as a premium version that is $19.99 a month, also handles notifications and billing, so divorcees don't have to make requests of their exes.

    For those exchanging money with people overseas, TransferWise aims to reduce costs associated with bank exchange rates. "Twenty percent of people in the U.S. will need to send money abroad at some point in the year, whether they're paying friends or family abroad or booking travel," says Joe Cross, ​U.S. general manager of TransferWise. "It's incredibly expensive and hard. We're trying to do what Skype did for international calling," he adds, which is to keep it simple and cheap.

    TransferWise works by finding a counterpart in Europe, for example,​ who wants to send money to the U.S, so the dollars go to that recipient and the money stays in the country of origin​. That way, paying exchange rates can be avoided. After the launch in the U.S. about a year ago, customers have already used TransferWise to transact around ​$4 billion. The company charges a small fee, typically 1 percent, to handle the transaction. "We believe it should be as close to free as possible," Cross says.

    Banks are also joining the friend repayment party: Chase launched QuickPay in 2009​, making it one of the first banks to launch its own "person to person" payment service, according to company spokeswoman Lauren Francis. ​Customers can access QuickPay through Chase apps or the website, and they made 30 million transactions on mobile devices in 2014, an 80 percent increase from 2013.​

    After comparing the perks and fees of each tool, you can pick the one that makes the most sense for you -- and reimburse your friends for that fun night out.

    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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    Macy's Black Friday
    Paul Abell/AP Images for Macy's
    By Brian Sozzi

    Black Friday may be on life support.

    The day after Thanksgiving, replete with doorbuster deals at jam-packed department stores and long lines at electronics purveyors, has for years marked the unofficial start of the holiday shopping season. But Black Friday continues to diminish in importance for shoppers as major retailers start offering deals online right after Halloween in order to get the jump on one another and drive more holiday sales overall, and more people choose to shop on their mobile devices at their own leisure.

    Black Friday was named for the start of the period when stores traditionally began to claim a profit for the year, with black ink used to mark profits by accountants, versus red ink for losses. But Black Friday shopping as a relic of years past is once again starting to take shape this November.

    On Nov. 1, Walmart (WMT) began offering discounts on thousands of items online, including toys and electronics. For example, Apple's (AAPL) iPad Mini 2 is being sold for $199, down from $268. A 48-inch RCA smart TV could be had for $299.99 compared to $319.99 previously. At the top of its homepage, Walmart is promoting "hot holiday rollbacks all season long", likely in an attempt to reawaken sluggish sales in the U.S. before the holiday season kicks into gear.

    Walmart's fiercest rival, Amazon (AMZN) isn't standing idly by. On Nov. 2, Amazon rolled out its new "deals of the day" holiday season promotion, which will lead up to its more serious discounts for Black Friday on Nov. 27.

    Reminiscent of once popular flash sales, Amazon's deals are timed, in order to create a sense of urgency among gift-seeking consumers. Some of the first deals offered by Amazon include video-game Metal Gear Solid 5 for Sony's (SNE) PlayStation 4 and Microsoft's (MSFT) Xbox One, which is discounted to $39.99 from $59. A pair of Saucony running sneakers is listed for $39.99, down from $70 previously. While Walmart and Amazon do battle online for holiday dollars in the early going, Target (TGT) isn't joining the fray. The Minneapolis-based retailer began to stock its stores with holiday merchandise on Nov. 1, but isn't offering any specific deals in the weeks leading up to Black Friday. Target didn't return a request for comment.

    Meanwhile, department store retailer J.C. Penney (JCP) downplayed the declining relevance of Black Friday, saying via email that "Black Friday remains an important shopping period for the company."

    "Black Friday is not dead, but it's definitely different -- I don't think it will ever die, but it has to change because customers are changing," said Kathy Grannis Allen, senior director at the National Retail Federation. Those changes to traditional Black Friday buying, fueled by a combination of more mobile shopping and earlier deals offered by retailers, were front and center during Black Friday 2014.

    U.S. shoppers spent $9.1 billion at brick-and-mortar stores on Black Friday last year, according to data from research firm ShopperTrak. That represented a drop of 7 percent compared with Black Friday in 2013. In 2013, sales at physical retailers declined an even steeper 13.2 percent from the previous year.

    Customer traffic on Black Friday has also declined by a similar amount, falling 5.6 percent in 2014 and 11 percent in 2013, according to ShopperTrak.

    However, online and mobile shopping have surged. Online sales on Thanksgiving Day last year increased 14.3 percent over 2013, with sales on Black Friday up 9.5 percent year over year, according to IBM Digital Analytics Benchmark. Black Friday mobile traffic reached 49.6 percent of all online traffic, an increase of 25 percent from 2013. Black Friday mobile sales accounted for 27.9 percent of total online sales, up 28.2 percent from a year earlier.

    "Black Friday is not irrelevant, it's just that a lot more people are [buying] on mobile devices," says Hannah Egan, product strategy specialist at IBM Commerce. Egan notes that mobile buying experiences have improved, as retailers have done a better job of targeting consumers with specific promotions on mobile devices.

    Adds Egan, "the mobile device has become one's personal shopper -- those retailers that will win are the ones who treat their customers as one customer, offering good deals both online and in-store."

    If traditional Black Friday shopping at physical stores is starting to become a thing of the past, there may be some distinct winners and losers from the retail sector.

    Winners could include companies that sell electronics such as Best Buy (BBY) or Amazon, as consumers look for good deals on these products throughout November and December and not just on Black Friday weekend. On the other hand, companies hawking impulse items people would buy for themselves while they're out shopping on Black Friday, such as winter coats, boots and other apparel, may be hurt.

    "Athleisure normally sells well over Black Friday weekend because it's never discounted," noted Allen, suggesting the likes of Lululemon (LULU) and Nike (NKE) could be impacted if fewer consumers are in the malls to buy yoga pants and joggers.

    And this year, November may also mean another in which the Black Friday buying orgy fades further into the background of importance for retailers.

     

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    More going out than coming in?
    Getty Images
    By Louis DeNicola

    Short-term savings often take the form of an emergency fund -- the three to six months' worth of living expenses everyone should have in case of a layoff, family crisis, medical emergency or other misfortune. Savings can also be set aside for short-term goals or expenses that may come up in the next one to three years, such as a vacation, renovations or a car.

    It's important to stash this money somewhere safe and accessible, rather than tie it up in risky investments. "You're going to need it, and you don't want it flushed away," says Chad Smith, a certified financial planner in North Carolina. "Avoid doing anything aggressive with it."

    So, where should short-term savings go?

    Savings Account. Savings accounts are one of the best ways to make sure your money is secure and available when needed. The Federal Deposit Insurance Corp. and the National Credit Union Share Insurance Fund guarantee that if a bank or credit union goes under, each customer's lost money gets reimbursed up to $250,000. The downside is that the average interest on a savings account is 0.41 percent, according to Bankrate (RATE), although online banks may offer higher rates. Ally Bank savings accounts earn 1 percent.

    High-Interest Checking Account. Often the highest interest rates are offered by regional banks or credit unions, and many of these regional institutions let anyone join, no matter where they live. Lake Michigan Credit Union, for example, opens up membership to people living in the Lower Peninsula of Michigan and those who have a family member with an account -- but also anyone who makes a $5 donation to the West Michigan chapter of the ALS Association.

    The LMCU Max Checking account offers members 3 percent APR for the first $15,000; additional funds accrue no interest. The account also refunds up to $15 in ATM fees each month and is part of a national network of ATMs with free withdrawals.

    Most high-yield checking accounts have monthly requirements. In LMCU's case, account holders must make 10 debit card purchases, log in to the account four times, sign up for emailed statements, and set up direct deposit. At many banks and credit unions, transfers from other bank accounts, including personal accounts, count as direct deposits. Some people buy small-denomination gift cards online or buy gas to meet the 10-purchase requirement.

    It's a bit of a hassle, but using a high-yield account for everyday checking and short-term savings can be rewarding. The difference between 0.41 percent interest and 3 percent interest on $15,000 over three years is $1,206.

    Credit Card Debt. Paying off debt may not seem like a way to save money for an emergency, but consider that the average interest rate for credit card debt is 15.72 percent, according to Bankrate. That means paying off debt yields a guaranteed return of 15.72 percent -- much more than a safe short-term investment would make.The idea here is to use money that would otherwise go into an emergency fund to pay down credit card debt, and fall back on the credit card in case of an emergency. However, keep in mind that some payments cannot be made with a credit card. It is wise to save at least several months' worth of funds for cash-only expenses such as rent rather than put all your savings toward eliminating high-interest debt.

    CD Laddering. This tactic is a bit more complicated but might result in a better yield, and a bank or financial planner can lend a hand. CD laddering is intended for short-term savings that might be needed in one to two years, as opposed to an emergency fund, which should be kept in a liquid account.

    To build a CD ladder, invest equal amounts of money in certificates of deposit with different maturity dates. (The longer the term, the higher the interest rate.) For instance, buy CDs that mature in six months, one year, 18 months, two years, and so on. As the CDs mature, renew them for the longest term on your ladder. This strategy ensures that cash will be available regularly to use if necessary. In the meantime, the money earns more interest than it would in a most savings accounts.

     

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    Anxious father paying bills online
    Alamy
    By Shannah Game

    The word "budget" strikes fear and panic in many. No one likes to think about them, let alone talk about them. The truth of the matter is that most budgets fail, and they fail badly, because most budgets lie. Yes, that's right -- they lie. A budget can represent whatever numbers you put in it. If you forget to add a bunch of expenses in each month, then it makes sense that you would be over budget month after month after month

    To break this silly cycle of money mayhem, here's an easy eight-step system you can use to master your budget in only 20 minutes a month. Open up a spreadsheet and let's get started!

    1. Create a Second Column

    Not to be redundant, but we've got to first start with the budget. Why most budgets fail is because they only have one column, the budgeted column. We've already gone over why this doesn't work. Instead, upgrade your budget to a two-column layout for success. Your first column is the "What I Think I Will Spend" column, and the second column is the "What I Actually Spent" column. Basically, you create two mirror columns to accurately display what is going on in your budget for a given month.

    2. Fill in 'What I Think'

    The "What I Think" column should be the easiest column to complete and shouldn't take you more than a couple of minutes at most. This column represents all of your budgeted items. It's an approximation of what you think you will spend during the month. Most of the numbers should be easy to access from your normal monthly expenses. Don't labor over this column too much, but make sure that you attempt to accurately itemize each income and expense item.

    3. End of Month

    The end of the month is where things start to get a bit more analytical (but don't let that scare you). At the end of each month, print off your most recent bank or credit card statements in which you've incurred your expenses for the month. This is the easiest step in the eight-step process, but it's critical to analyzing what went on during the month.

    4. Add It Up

    Once you're armed and ready with your statements (and receipts, for cash spending), get out a handy calculator and some highlighters. Color-code your statements for budget expense items like groceries, eating out, gas, clothing, utilities, phone, and so on. Then go through the list and highlight each item in each category. This makes it easy to add it all up when you are finished. There's nothing yet to analyze in this step, you are simply categorizing for step six. This will take you the longest out of all the steps, so allow 10 minutes to conquer your statements. Once you do this process for a month or two, it should be very easy to go through your statements in five minutes or less. Practice makes perfect.

    5. 'What I Spent'

    Now it's time to fill in the second column, "What I Spent." Simply take the numbers from your statements and input them into the budget template. If you notice that you've left off a category on your budget, add it and put it in bold so it can jog your memory next month. Each month has its own twists and turns, so it's common that you might leave out a category by accident.

    6. Compare the Columns

    You've done the heavy lifting now, and are almost through your 20 minutes this month. Take a look at your budget and compare the two columns. Are there any areas that surprise you? Did you come in under or over budget, and why? What about those missing categories, are they essential to include going forward? You see the power is in comparing these two columns. It gives you a chance to evaluate your budget from estimation in the beginning of the month, to an absolute at the end of the month.

    7. The Envelope Trick

    If you have a category that is always your Achilles' heel, and month after month you are overspending, then it might be time to kick it old school. For instance, let's say eating out is always an area you overspend in. If you've budgeted $200 for the month in your first column, then at the beginning of the month you can withdrawal that $200 in cash, and stick it in an envelope. For the entire month, every time you eat out, you must dip into this envelope. Once the money is gone, your eating-out budget is gone. While this might seem harsh, it's an old school way to force you to stay within budget. At the end of the day though, none of these steps will work unless you put effort in and are committed to mastering your budget.

    8. Reward Yourself

    We all love a good reward, and you should pat yourself on the back if you've completed these steps for the month. No matter the outcome, you've taken small moves that will lead to big changes in your cash flow. Pick a dollar amount that you are comfortable with at the beginning of the month, and set a goal for yourself. Maybe you want to treat yourself to an extra cupcake at the end of the month, or go to that concert that you are dying to see. Whatever it is, give yourself a pat on the back, but not for too long -- next month is coming quickly and it will be time to restart the 20-minute system.

    What's your budgeting system?

     

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    Jobless Claims In U.S. Rose More Than Forecast Last Week
    Laura Buckman/Bloomberg via Getty Images
    By Lucia Mutikani

    WASHINGTON -- U.S. job growth surged in October and the unemployment rate hit a 7½-year low of 5 percent in a show of economic strength that makes it much more likely the Federal Reserve will raise interest rates in December.

    Nonfarm payrolls increased 271,000 last month, the largest rise since December 2014, the Labor Department said Friday. In addition, average hourly earnings rose a respectable 9 cents.

    The unemployment rate now stands at its lowest level since April 2008 and is in a range many Fed officials see as consistent with full employment.

    Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin, called the jobs growth figure "astounding."

    It's pretty clear that the Fed would be justified in hiking in December if the economy doesn't hit another air pocket.

    "It's pretty clear that the Fed would be justified in hiking in December if the economy doesn't hit another air pocket," Jacobsen said.

    The reaction in financial markets was swift and sharp.

    Prices for U.S. Treasuries plummeted, pushing yields higher, and the dollar rose to a 6½-month high against a basket of currencies as investors braced for higher borrowing costs. U.S. stocks were trading lower.

    Futures markets shifted to imply a 72 percent chance of a rate hike next month, up from 58 percent before the data.

    "We've indicated that conditions look like they could be right for an increase," Chicago Federal Reserve Bank President Charles Evans, who has argued against a rate hike, said in an interview with CNBC. "The real side of the economy is looking a lot better."

    The solid report added to strong services sector and automobile sales data in painting an upbeat picture of the economy at the start of the fourth quarter.

    With speeches from several Fed officials, including Chair Janet Yellen, suggesting a low bar for a December rate increase, economists had said ahead of the report that monthly job gains above 150,000 in October and November would be sufficient grounds for the first increase in overnight borrowing costs since 2006.

    The U.S. central bank has held rates near zero for nearly seven years.

    The Fed has made clear, both in its statement after its last policy meeting in October and subsequent comments from Yellen, that a rate hike is firmly on the table at its Dec. 15-16 meeting.

    Broad-Based Gains

    Economists had forecast nonfarm payrolls increasing 180,000 last month and the unemployment rate remaining at 5.1 percent. In addition to the unexpectedly stronger job gains last month, data for August and September were revised to show 12,000 more jobs created than previously reported.

    The report bolstered views that economic growth will regain momentum in the fourth quarter after braking sharply to a 1.5 percent annual pace in the July-September period.

    Last month's rise in wages, which have been almost stagnant despite a tightening labor market, lifted the year-on-year reading to 2.5 percent. That was the biggest increase since July 2009 and could give the Fed confidence that inflation will gradually move towards its 2 percent target.

    There were improvements in other labor market measures that Fed officials are eyeing as they contemplate a rate hike.

    A broad measure of joblessness that includes people who want to work but have given up searching and those working part-time because they can't find full-time employment fell 0.2 of a point to 9.8 percent, the lowest level since May 2008.

    The employment-population ratio rose to 59.3 percent from 59.2 percent in September. But the labor force participation rate, or the share of working-age Americans who are employed or at least looking for a job, held at a near 38-year low of 62.4 percent.

    Employment gains in October were broad-based, though manufacturing added no jobs and mining shed 4,000 positions.

    Manufacturing has been hurt by a strong dollar, efforts by businesses to reduce bloated inventory and spending cuts by energy companies cutting back on well drilling and exploration in response to lower oil prices.

    The mining sector has shed 109,000 jobs since peaking in December 2014. Oilfield services provider Schlumberger (SLM) last month announced further layoffs in addition to the 20,000 jobs it has already eliminated.

    Construction payrolls, however, increased 31,000 last month, the biggest gain since February.

    The services sector added 241,000 jobs in October, with large gains in retail, health and leisure. Professional and business services added 78,000 jobs, the largest gain since last November. Government payrolls increased 3,000 last month.

    -Tariro Mzezewa contributed reporting from New York.

     

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    A lone shopper enters a K mart retail store, one of many corporate outlet stores throughout the nation. Elmhurst, Illinois.
    Alamy
    There were plenty of winners and losers this week, with a once red-hot maker of mobile apps finding an exit strategy in the hands of an acquirer and a popular restaurant chain having to close down several of its burrito shops after an illness outbreak.

    HBO -- Winner

    Jon Stewart's retirement didn't last very long. The iconic host of Comedy Central's "The Daily Show" stepped down this summer, and on Tuesday Time Warner's (TWX) HBO announced that it had signed him to an exclusive four-year production deal.

    Stewart won't be getting a new full-length show. He'll be contributing short-form content throughout the day that will be made available on its stand-alone HBO Now streaming platform. That's a great way to draw attention to the new online service, and it's something that should help HBO compete in a world with a growing number of video entertainment options.

    Chipotle Mexican Grill (CMG) -- Loser

    The "food with integrity" champ of fast-casual dining has a brand integrity issue on its hands. Chipotle had to temporarily shutter 43 of its eateries in the Northwest after several customers became ill with symptoms suggesting an E. coli outbreak. At least 39 customers in Washington and Oregon have become sick after eating at Chipotle, with a few of them having to be hospitalized.

    Chipotle will get over this. It's not the first time that it has had an issue with customers and even employees getting sick. However, Chipotle's appeal is based on the premise that its natural ingredients are superior and worth paying a premium for. As the headline became a national story it will be that much harder for Chipotle to win back the trust of its burrito-loving audience.

    King Digital Entertainment (KING) -- Winner

    Sometimes social gaming can have a happy ending. Activision Blizzard (ATVI) announced that it would be acquiring King Digital -- the company behind "Candy Crush Saga" and other mobile apps -- in a $5.9 billion deal.

    King Digital shareholders will be cashed out at $18 a share. That is a discount to the $22.50 price tag that it went public at last year, but it's a premium to where it was trading when the deal was announced.

    King Digital saw its gross bookings for "Candy Crush Saga" peak in late 2013, and while it countered that with an uptick in new releases, none of the games failed to surpass the popularity of the original. King Digital had the resources to stick around on its own and fade quietly, but now it has a better chance to succeed with a much larger video gaming company taking the wheel.

    Checkpoint Systems (CKP) -- Loser

    There's some irony to be had when you specialize in arming retailers with theft-prevention devices but you miss something going amiss in your own house. Checkpoint Systems announced that it has overstated its earnings in its two most recent quarters. Checkpoint will be adjusting its bottom-line results lower for the first and second quarters of this year.

    Kmart -- Winner

    The blue lights are swirling again at Kmart. Parent company Sears Holdings (SHLD) rolled out its iconic Bluelight Specials this past weekend through all of its stores. At any point in the day the blue light siren will go off and an announcement will be made on deals that will only be available for 15 minutes.

    Kmart's been a fading discount department store chain for more than a decade, and bringing back the Bluelight Specials that it retired in 1991 should help drum up store traffic. After all, the deals aren't announced ahead of time, so you just have to be inside a Kmart to see if it's worth it. It's a smart move just as the holiday shopping season is getting started.

    Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Activision Blizzard and Chipotle Mexican Grill. The Motley Fool recommends Time Warner. 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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    Arlington, Virginia. An aerial view of the Pentagon.
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    After the storm comes the calm.

    As the clock ticked down toward the end of the Pentagon's fiscal year on Sept. 30, Defense Department acquisitions specialists rushed to shovel money out the door, awarding contracts left and right in the final days of September. By the time all the dust settled, $34.76 billion in contracts had been awarded.

    The month of October, by contrast, was relatively calm. "Only" $17.1 billion in contracts were handed out by the Pentagon last month. And thanks to the Defense Department's open books policy, and its commitment to publishing all contracts of substantial size on the day they're awarded, for public review, we know how much each of these contracts was worth, who won them, and what they bought for taxpayers.

    Today, we're going to review a few of the most interesting things that your tax dollars bought for the Pentagon last month, beginning with...

    Zen and the Art of Drone Maintenance

    In America and around the world, militaries are spending billions of dollars annually to acquire unmanned aerial vehicles -- "drones," in the popular parlance. But buying a drone is just the first step. Once it's bought, you need to keep the device tuned up and well maintained so it will work as expected. As it turns out, that's pretty lucrative work in its own right.

    In October, the U.S. Air Force awarded drone-maker Northrop Grumman (NOC) $204 million to perform maintenance and support, and to run logistics supply chains for its fleet of Global Hawk drones.

    Holy Rollers

    Unarmed drones such as the Global Hawk can be useful for spotting artillery strikes, advising Army artillerists on how to adjust their fire to hit their targets. Of course, you still need to buy the artillery in the first place. Last month, the U.S. Army awarded British defense giant BAE Systems a $245 million contract to supply it with 30 M109A7 "Paladin" self-propelled howitzers, and also 30 M992A3 tracked ammunition carriers to keep the Paladins well supplied.

    Lebanese Fighters

    Like it or not, arms sales are an international business. One contract that illustrates just how international the arms trade has become is a $172 million contract awarded to private U.S. defense contractor Sierra Nevada Corporation. In a contract spanning at least three countries, SNC will build six A-29 Super Tucano fighter planes in cooperation with Brazilian aerospace giant Embraer (ERJ). The U.S. Pentagon will then broker a sale of these fighters to the Lebanese military in what the government refers to as a "foreign military sales" contract.

    Missiles From Heaven

    Yet another aerospace giant, this time America's own Lockheed Martin (LMT) landed a $305 million contract in October. The funds will be used to purchase an unspecified number of Lockheed's new Joint Air-to-Surface Standoff Missiles for the U.S. Air Force. Armed with 2,000-pound conventional warheads, these missiles are designed to be launched from U.S. B-1, B-2, and B-52 strategic bombers, and from tactical fighter jets such as the F-15, F-16, and the new F-35 stealth fighter jet.

    And Bombers From Boeing

    Lockheed Martin's archrival in the U.S. is aerospace giant Boeing (BA). Best known for its Boeing 737, 747 and 787 commercial jetliners, Boeing is also a big name in the defense world. Last month, Boeing landed a monster $898 million award to supply the U.S. Navy with 15 EA-18G Growler electronic warfare aircraft "and associated airborne electronic attack kits." Designed to knock out enemy radar and anti-aircraft defenses before an attack, the Growler is a derivation of Boeing's vaunted F/A-18 Hornet. Together, these two aircraft make up the bulk of naval aviation aircraft flying for the Navy today.

    Of course, these awards represent only a small sampling of the hundreds of contracts your tax dollars funded last month. To see the rest, check out the U.S. Department of Defense contracts website.

    This will be Motley Fool contributor Rich Smith's final defense business column for DailyFinance. It's been a pleasure writing for you all. Rich has no financial interest in any of the companies discussed above, but The Motley Fool recommends Embraer-Empresa Brasileira. 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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    Jeh Johnson Rings Opening Bell At New York Stock Exchange
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    By Lewis Krauskopf

    NEW YORK -- U.S. stocks ended little changed Friday, with a rise in financials countered by a slide in utilities and other sectors, as Wall Street took the strong U.S. jobs report as evidence the Federal Reserve will soon raise interest rates.

    Since the Fed last week opened the door to a rate increase in December, investors have been looking to economic reports for clues to whether the central bank will take action. Data released Friday showed U.S. non-farm payrolls growth in October was the best since December 2014, while the unemployment rate fell to 5 percent, the lowest since April 2008.

    While higher interest rates themselves are not a good thing, a vote of confidence in the strength of the economy I think is going to overshadow that over time.

    The three major indexes posted higher weekly performances for the sixth week in a row, after posting their best monthly results in four years in October.

    The overall market Friday was "holding up well," Peter Jankovskis, co-chief investment officer at OakBrook Investments in Lisle, Illinois, who noted that a Fed action would indicate the economy is healthy enough to tolerate higher rates.

    "While higher interest rates themselves are not a good thing, a vote of confidence in the strength of the economy I think is going to overshadow that over time," Jankovskis said.

    The Dow Jones industrial average (^DJI) rose 46.9 points, or 0.3 percent, to 17,910.33, the Standard & Poor's 500 index (^GSPC) lost 0.73 points, or 0.03 percent, to 2,099.2 and the Nasdaq composite (^IXIC) added 19.38 points, or 0.4 percent, to 5,147.12.

    The S&P financial sector rose 1.1 percent, leading all sectors. Banks tend to benefit from higher borrowing rates, and shares of JPMorgan (JPM), Bank of America (BAC) and Citigroup (C) each climbed at least 3 percent, making them the biggest positive influences on the S&P.

    The rate-sensitive utilities sector dropped 3.6 percent, the worst performing group. The S&P consumer staples sector fell 1.1 percent, while the energy group dipped 0.4 percent as crude oil prices were down.

    Focus on Rate Increase

    "The market is reacting today as if rates will be increased in December," said Ben Halliburton, chief investment officer at Tradition Capital Management in Summit, New Jersey.

    "They're rotating money to take advantage of that or cut back where they're not going to be advantageous," Halliburton added.

    Alibaba (BABA) fell 2.1 percent to $83.61 after a CNBC report said short-seller Jim Chanos pitched the company as a possible short.

    Shares of Disney (DIS) rose 2.4 percent to $115.67 after it reported a higher-than-expected profit.

    ZS Pharma (ZSPH) shares jumped 40.6 percent to $89.04 after Britain's AstraZeneca (AZN) agreed to buy the biotech company for $2.7 billion.

    Tableau Software (DATA) shares jumped 21.4 percent to $102.44 after higher-than-expected results, with other data analytics stocks also rising.

    Declining issues outnumbered advancing ones on the NYSE by 1,931 to 1,186, for a 1.63-to-1 ratio on the downside; on the Nasdaq, 1,726 issues rose and 1,086 fell for a 1.59-to-1 ratio favoring advancers.

    The S&P 500 posted 15 new 52-week highs and 9 new lows; the Nasdaq recorded 151 new highs and 70 new lows.

    -Charles Mikolajczak and Abhiram Nandakumar contributed reporting.

    What to watch Monday:

    Earnings Season
    These selected companies are scheduled to report quarterly financial results:
    • Dish Network (DISH)
    • Lions Gate Entertainment (LGF)
    • Priceline Group (PCLN)

     

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    actual last will and testament...
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    By Scott Gamm

    The most common estate planning mistake may surprise you.

    "The mistake actually isn't part of the will and trust, said Dan Prebish, head of life services events at Wells Fargo Advisors, based in St. Louis. "It actually has to do with beneficiary designation."

    Prebish said people sometimes fail to designate who will gain control of various assets upon one's death. "It's not uncommon to find that someone still had their ex-spouse named" as the one to receive control of the asset, he added.

    However, the fix is easy. When changing the beneficiary on a retirement account, for example, the update is as simple as filling out a form. Prebish said communication with one's heirs is key, given the uncomfortable nature of estate planning.

    "Surprises are what breeds hurt feelings and even litigation," he said. "Find a way to explain this to your children or heirs."

    He says the starting point to any successful estate plan is a will, which is a legal document that delineates which heirs are to receive which assets or properties you own. "Talk to a local attorney to draft a will,' Prebish added. 'I know people are tempted to go to the Internet and write their own."

    He said the online programs can be helpful. "But if you gave me a Stradivarius, it wouldn't sound good because I don't know how to play the violin," he added. User error is typically how things go wrong when drafting wills without the help of an attorney.

    Another factor to keep in mind: taxes. "An individual who has a total estate of less than $5.45 million in 2016, won't pay any Federal estate tax," he explained. "Above that, we're talking about a 40 percent flat rate." These thresholds were raised slightly for 2016 and stood at $5.43 million in 2015.

    Regardless, federal estate tax generally doesn't matter to the majority of the American public, Prebish said. That's because one would need an estate worth over $5.45 million in order for Federal estate tax to kick in. Keep in mind, however, that individual states have different thresholds -- some in the sixfigures, which may affect a wider demographic.

     

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    By Louis DeNicola

    Health insurance costs are creeping ever higher. The Kaiser Family Foundation reports that average premiums will rise 5.1 percent in 2016 for the lowest-cost marketplace silver plans available to a 40-year-old nonsmoker earning $30,000 a year in 14 major cities. The increase will be lower for people with tax credits, but could still represent a significant jump in the monthly bill.

    While there aren't as many clear discounts for health insurance as there are for auto and renters insurance, there are ways to save. Here are seven tactics that can lower health insurance costs.

    Increase the deductible. Health insurance premiums correspond to the plan's deductible; that is, the total amount you must pay for care before insurance kicks in. Increasing the deductible can be risky -- in a serious emergency the amount due can climb quickly, leaving you on the hook for hefty out-of-pocket expenses. Still, this might be a reasonable choice if you're not concerned about the cost of routine care (which counts towards the deductible) and have funds set aside to cover a major illness or emergencies.

    Choose an insurer with phone-in consultation. For someone who is generally healthy, a plan with a high deductible and a phone-in service might be a good option, says Eric O'Brien, president of Mosaic Employee Benefits, a multistate independent broker. Teladoc, for example, lets plan participants call or video chat with a doctor at any time for diagnoses of minor ailments and prescriptions. In some instances this is cheaper than visiting a doctor or emergency room. Consultation costs vary by telehealth provider but typically settle around $35. The fee may be lower for people with a monthly or annual subscription.

    Pick a narrow-network plan. Save on premiums by choosing an insurance provider that maintains a skinny, or narrow, network in the region. In other words, the insurer may be a large, even national, company but includes only one or two medical centers in its local network. Premiums may be lower than plans with more in-network hospitals and physicians. If you want to stick with your primary care physician, first check to make sure he or she is in the narrow network before opting in.

    Adjust income to be eligible for tax credits. People who buy health insurance through the government marketplaces may be eligible for tax credits depending on their "modified adjusted gross income" and family size. The lower the income, the more credits are available. You can decrease adjusted income by increasing tax deductions. One of the easiest ways to do this is by contributing to a retirement plan -- either a 401(k) or 403(b) plan through an employer or a traditional Individual Retirement Arrangement on your own.

    Quit smoking. Using tobacco (cigarettes, cigars, snuff -- or just plain chewing it) for anyone who buys health insurance. Marketplace plans may charge tobacco users up to 50 percent more than nonusers. Quitting comes with other financial benefits, as well. In addition to not paying for the tobacco products, premiums for life, renters, and homeowners insurance may be lower for nonsmokers.

    Look beyond the exchanges. Instead of limiting your search to HealthCare.gov or state-run marketplaces, try direct shopping with insurers or compare options on a private exchange, such as eHealthInsurance or GoHealth. Prices may not be lower for identical plans, but you might find a plan that isn't listed on the government exchange and fits your budget better. An added benefit is follow-up convenience: If there are any administrative or billing problems, they can be resolved directly with the insurer rather than having to work through the marketplace.

    Consider a nonprofit health care co-op. An alternative to mainstream health insurance plans is one of the health cooperatives created when the Affordable Care Act passed. Health co-ops are nonprofit insurance organizations governed and owned by their members. A 2013 report by consultants McKinsey & Company found that in 22 states with a health care co-op, the co-ops offered the cheapest insurance plans. Some co-ops are struggling to stay open given lower than expected enrollment rates, but in some places they are a money-saving alternative.

     

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    By Nancy Mann Jackson

    Sometimes, even the best intentions can backfire.

    The latest proof?

    Researchers at the University of Chicago's Booth School of Business find that being determined to save for a goal can lead to poor decisions in other areas of your finances -- like using a high-interest credit card just to avoid tapping any of those sacred funds.

    "We're constantly told that it's important to save money, which it is, and people believe that having savings makes them responsible," says Abigail Sussman, assistant professor of marketing at Booth and co-author of the study.

    "But people become overly focused on this version of responsibility," she adds. "Healthy finances mean more than just having money in savings."

    The Unintended Consequences of Super Saving

    Study participants were presented with an emergency -- needing a $5,000 replacement furnace -- as well as a savings account (earmarked for a child, a car, or an unspecified goal), and a credit card with a low, medium or high interest rate.

    Turns out people were inclined to pull out their plastic to cover an unexpected cost, rather than dip into savings -- even if the interest rate they'd pay for credit was much higher than the interest earned on their savings in the bank.

    And participants were even more likely to use credit over savings if the account was specifically dedicated to a "responsible" goal like a child's college tuition.

    Considering that a typical savings account yields less than 1 percent interest while average credit card rates top 16 percent, super savers can pay a hefty price for those responsible intentions.

    The Value of Seeing the Full Financial Picture

    It certainly is possible to work toward a goal and still deal responsibly when an emergency strikes -- especially, as this study suggests, if you avoid an unhealthy attachment to your savings.

    "An important takeaway is to keep an eye on overall wealth, rather than focusing exclusively on a specific target," Sussman says.

    If you want to refocus your financial game plan, read up on five more money mistakes that even good savers can make.

     

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    By Kimberly Palmer

    The winter months can be expensive: They often encompass holiday shopping, travel, splurges that cheer you up on cold days and larger-than-usual electricity bills. Even winter clothing can be pricier than summer apparel, since outfits include bulky jackets and boots. U.S. News Frugal Shopper contributors offer ideas to keep your costs down as the temperature drops.

     

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  • 11/06/15--21:00: The Downside of Cheaper Gas
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    An Exxon Mobile Corp. Gas Station Ahead Of Earnings Figures
    Daniel Acker/Bloomberg via Getty Images
    By Dandan Zou

    With gas prices down by more than $1 a gallon in the past year, Americans collectively are spending $350 million a day less at the gas pump than they were a year ago, says the American Automobile Association. But the drop in gas prices, along with a stronger economy, has led to more driving -- and more accidents. And that's adding up to higher insurance costs.

    Through the first seven months of 2015, U.S. drivers put a record 1.8 trillion miles on the road, says the Federal Highway Administration. The National Safety Council estimates a 10 percent increase in traffic fatalities over that time compared with a year ago. Geico and Allstate (ALL) have already reported an increase in the frequency and severity of claims, and both have announced that they are hiking rates. Morningstar (MORN) analyst Brett Horn expects other insurers to follow suit.

    It might pay to reshop your policy and to drive as if gas were still expensive. When it is, drivers tend to accelerate and brake gradually and maintain a steady speed to save gas, says Pennsylvania State University professor Guangqing Chi, who has studied the correlation. That's a good way to keep your record clean and your rates low.

     

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    I don't know about you, but I've always wanted to drive a foreign sports car.

    Imagine the moonroof open, accelerating like there's no tomorrow and the breeze blowing through your hair -- it's a dream worthy of pursuit. Or, so I thought.

    My first car was a 1996 red Pontiac Grand Am. I bought the car back in college -- it was the first car that was fully my responsibility. I made the payments that I believed were just part of owning a car. Looking back, I laugh.

    Now, I don't know about you, but I had an awesome grandmother. You know, the kind of grandmother that you wish was your grandmother, too. How did she display her awesomeness? I'll tell you.

    My grandmother offered to pay off my Pontiac Grand Am as a gift for my graduation. This was amazing. Upon graduation, I no longer had a car payment. Most drivers today can't say they have a car they own outright -- having no payments whatsoever! I felt as if I had hit the lottery. Later I would learn that I practically did.

    The sad day eventually came when my grandmother passed away. Kindly, she bequeathed her car -- a 1998 Chevy Lumina -- to my care. I nicknamed it "The Lu" and had some decisions to make. Should I keep the car or sell it?

    While I was driving The Lu, I learned a few valuable lessons -- at least they became more cemented in my mind. Today I'd like to share with you the lessons I learned. If you learn these lessons too, who knows, you just might end up with more wealth than you ever thought possible.

    1. Car payments stink. When I was driving The Lu, an important lesson pierced my soul: car payments stink. Sure, The Lu had a wet cat smell at times, but it smelled better than having a car payment when I was first starting out as a financial advisor.

    Back in college, I took a finance class in which the professor asked a question:

    "How many of you plan on buying a new car every three to five years?"

    I raised my hand along with many of my classmates. Then my professor said:

    "Enjoy making your car payments for the rest of your life while I take my family to Europe on vacation whenever I want."

    At first, I was confused. Later, I discovered he had a point. But his point didn't fully sink in until I had a few years of experience driving cars like The Lu which had no car payment. When you don't have a car payment, you save a whole lot of money.

    Imagine saving $400 a month because you don't have a car payment. That's $4,800 a year. Imagine doing that for three years straight -- you would have $14,400. That will get you a pretty decent vehicle if you ask me!

    2. Saving for retirement trumps having a car with a car payment. What if you took the money you're saving on car payments and put it toward your retirement? Let's say you have 30 years until you retire and you're expecting an 8 percent annual return on your investment. If you invest $400 a month, guess how much you'll have in your portfolio when you retire?

    I'll give you a moment to guess.

    If you just put it into a savings account that yields no interest, you'll have $144,000 at retirement. Not bad!

    2nd Chevrolet Lumina 2
    Alamy"The Lu"
    But how about that investment account? If you put it in there, you'll have $587,260.29 at retirement. Now, this isn't figuring in inflation or the effects of volatility, but it should give you a good idea of what you're giving up by driving a car with a payment.

    When I was driving The Lu, especially when I became a financial adviser, I kept in mind my professor's advice and fully realized that saving for retirement is more important than a car payment.

    Now, am I saying that you should never have a car payment? Not at all. But I am saying that there are more important financial goals than having a car payment, and saving for retirement is certainly one of them.

    3. Learn early. I'm convinced that driving The Lu without a car payment enabled me to put what I would have been spending on car payments to better use. But I'm also convinced that learning this lesson early in life has and will have unforeseen benefits into the future.

    By learning these valuable lessons early in life, the rest of my life will naturally be easier than if I hadn't learned the lessons. In a way, lessons learned early have similarities to the concept of compounding.

    How many more times will a young person be able to put into good use the lessons they learned earlier than those who are older? How many ripple effects will make their way through time and space to make that young person's life so much more productive and satisfying?

    Now, you might be saying: "Okay, Jeff, I understand I need to learn early, but you're missing something -- I'm not so young anymore. Is there hope for me?"

    Of course there's hope for you. But there's going to be less hope if you take action later instead of now.

    When I was driving The Lu, I realized that I was going to benefit from learning a few financial lessons about vehicles early in life. If I had shrugged off my professor's advice, I probably would have been driving a BMW with a big fat car payment that I really couldn't afford. That might have led to me buying other things I couldn't afford.

    It's almost as if small decisions -- like the decision to keep The Lu for a few years -- can put people on a course that changes the rest of their lives. One little change now may result in a very different future.

    What Should You Do?

    Perhaps you have a few decisions you need to make regarding your vehicles. Maybe you have car payments and you'd like to experience the freedom that I found. It could be that there are a few other financial changes you need to make, too.

    Whatever it is that's on your mind, think about your future. Are you doing yourself a favor over-consuming instead of saving and investing? Of course not. While nobody can predict the future, there are some things you can do to slightly change your course to -- in all likelihood -- discover a better financial future.

    You should do the right thing. Sell the expensive car you can't afford. Pay off your debt. Learn about investing. Make long-term goals an immediate concern along with your short-term goals. I promise you, those are decisions you'll never regret.

     

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    ShutterstockDividend stocks are more stable than other types of equities, but have more risks than bonds.
    By David Ning

    With many savings accounts paying less than 1 percent interest, some retirement savers are turning to dividend stocks to provide a more reasonable return. Dividend stocks provide a stream of income as well as the potential for capital gains, but they also carry more risk than a savings account, certificate of deposit or bonds. Here's what you should know about using dividend stocks to pay for retirement.

    Dividends can stop at any time. Dividends are distributions of company profits to shareholders. Using the income derived from dividend paying stocks to fund retirement is a viable strategy for many people. However, if profits decline, your dividend might also decrease or even be eliminated. You have to be prepared for the possibility of a surprise dividend cut in the future. If the companies you choose have a bad year, your retirement income might suffer as well. Of course, the reverse could also be true. A company that performs well might provide an increase in dividend payments.

    Diversification difficulties. Companies that pay significant dividends are concentrated in a few industries. Investing exclusively in dividend stocks isn't likely to provide adequate diversification of your investments. It's difficult to make a diversified portfolio of stocks that currently sports a high yield and has the ability to grow its dividend for the foreseeable future. You may have to spend time researching and monitoring these stocks during your retirement years.

    Less volatility. Dividends are less volatile than stock valuations. Dividend stocks tend not to increase as quickly as the market as a whole, but they also tend to hold their value a little better when the market goes down. However, dividend stocks are not a risk-free investment, and carry more risk than high-quality bonds. The business landscape is always changing. Investing in a single stock always carries the risk of something going wrong at that company. A stock that does extremely well for decades could suddenly start declining because innovations are disrupting that industry. You may be able to mitigate some of the risks by building a diversified portfolio with many stocks or investing in high-dividend mutual funds or ETFs instead of picking stocks on your own.

    Tax efficiency. Dividends are typically taxed at a lower rate than bonds or other ordinary income, which makes dividend stocks a tax-efficient source of retirement income. However, when you sell the investment you may also owe capital gain taxes. If you are forced to sell all of your stock in a company years from now at a tremendous gain because the prospects are no longer bright for that company, it could result in a large tax bill. Selling only a portion of your investments every year, and spreading out the capital taxes to be paid in multiple years and possibly within a lower tax braket, could result in a smaller overall tax bill.

    Spending only income will result in money for heirs. If you spend only the dividends your investments generate, you will almost certainly leave money behind for heirs. This may be desirable to parents who want to pass on wealth to their children, but it also means that you aren't spending as much as you could in retirement.

    David Ning is the founder of MoneyNing.com.

     

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    Veterans Day Parade
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    By Elizabeth Harper

    Many retailers offer discounts on goods and services for active duty or veteran military personnel out of respect for those who serve, and some of these discounts are well worth taking advantage of. But with dozens of deals and policies varying by business, it can be tough to navigate.

    With Veteran's Day right around the corner, we thought it was high time we update our guide to where you can find military discounts, and how they might apply.

    How to Get Military Discounts

    Some businesses advertise their military discounts prominently, but at many you may have to ask, show ID or other proof of service, or even be in uniform to get a discount. Complicating matters further, many national retailers (particularly franchises) offer discounts that may vary from location to location; you're most likely to find deals at locations near military bases.

    So despite what's on this list, you'll want to check with your local retailer to be sure what discount is offered.

    What Discounts to Expect

    The discounts available, when you're willing to jump through the hoops to get them, can vary greatly in quality. But many retailers will offer around 10 percent off. If you're a military member or veteran, you can usually find car manufacturers willing to offer you $500 or more off, though deals depend on what make you're shopping for as well as when you're shopping for it.

    Travel deals are also common, but typically vague. Many hotels offer discounted rates for military members and families on leisure travel that are based on government per diem rates, which may or may not be the best deal you can find.

    No matter where you're shopping or what you're shopping for, be sure to ask about a military discount before you buy. Even retailers who aren't on this list may offer military discounts -- you just don't know until you ask.

    Here's a look at the deals.

    Store Discount Who's Eligible? Details
    24 Hour Fitness Discounted membership Active duty
    Alamo Rent A Car Discounted rates Active duty
    AMC Theatres Discounted tickets Active duty, retirees, and family Typically after 4PM
    Apple Discounted products Active duty, veterans, reservists, National Guard members, and family
    Applebee's 10% off, free entree on Veterans Day Active duty and veterans
    AT&T Wireless 15% off phone plans Active duty, veterans, and qualified military spouses In-store only
    Baskin-Robbins 10% off Varies
    Bass Pro Shops 10% off Active duty and retired For one week, beginning on the 15th of every month
    Best Buy Up to 10% off Varies
    Best Western Based on government per diem Active duty
    Burger King 10% off Varies
    Carl's Jr./Hardee's 10% off Varies
    Chick-fil-A Discounted pricing, free meals on Military Appreciation Nights Varies
    Choice Hotels Based on government per diem Active duty, retired, and family
    Chrysler Up to $500 Active duty, active reservists, retirees, and veterans discharged within the last 12 months
    CiCi's Pizza 10% off Varies
    Cinemark Movie Theatres Discounted tickets Active duty
    Dairy Queen 10% or more off Varies May only be available certain days of the week or to uniformed personnel
    Dell Up to 30% off Active duty, veterans, and families
    Ford $500 bonus cash Active duty, reservists, National Guard members, veterans (within 180 days of discharge), and family Offer only good on eligible models
    Fuddruckers 10-20% off Varies
    Geico Up to 15% off Active duty, National Guard members, reservists, and retired
    General Motors Discounted pricing, up to thousands off Active duty, active reservists, National Guard members, retirees, veterans discharged within the last 12 months, and spouses
    Greyhound 10% off Active duty, retired, and family
    Hard Rock Cafe 15% off Varies
    Hertz Discounted rates Active duty
    Hewlett-Packard Various discounts Varies
    Hilton Hotels & Resorts Based on government per diem, 10% off leisure stays with Military Family Rate Active duty, reservists, retired, and family
    Home Depot 10% off Active duty, reservists, retired, disabled veterans, and family
    Honda $500 off Active duty, reservists, spouses, retirees, and veterans (within 180 days of discharge) Only available if you finance or lease from Honda
    Howard Johnson Based on government per diem Active duty Depending on availability
    Hyundai $500 off Active duty, reservists, National Guard members, retirees, veterans, and spouses Only for select 2014, all 2015, and all 2016 models
    Jiffy Lube Up to 15% off Varies
    Kohl's 15% off Varies
    La Quinta Inns & Suites Based on government per diem Active duty
    Lowe's 10% off Active duty, reservists, National Guard members, retirees, veterans receiving VA benefits, and family
    Marriott Hotels Based on government per diem Active duty
    Mazda $500 off Active duty; reservists, veterans, and retirees (within 12 months of discharge/retirement) Only for 2015 and 2016 models
    Motel 6 10% off Active duty, retirees, and family
    National Car Rental Discounted rates Active duty, retired, and family
    National Park Service Free Annual Pass Active duty, family, reservists, and National Guard members
    Nike 10% off Active duty, reservists, and retirees
    Nissan Varies Active duty, reservists, retirees, veterans (within 12 months of discharge), and spouses and partners
    Old Navy 10% off Varies Mondays
    Pep Boys 10% off Active duty, National Guard members, reservists, and retired Tuesdays, Wednesdays, Thursdays
    Regal Entertainment Group Varies Varies
    Scion $500 off Active duty, reservists, National Guard members, retirees and veterans (within one year of service), and family
    Shoney's 15% off Varies May have to wear a uniform
    Showcase Cinemas $5.50 or $7.50 per ticket Active duty and family
    Sprint Monthly service discount Active duty and retirees
    Starwood Hotels & Resorts Based on government per diem Active duty
    Toyota $500 rebate Active duty, retirees and veterans (discharged within 12 months), and family
    Verizon Wireless 15% off monthly plan and 25% off select accessories Active duty and veterans
    YMCA Free membership and child care Families of active duty service members

     

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    Mother and son shopping for Christmas ornaments in store
    Getty Images
    By Raechel Conover

    Christmas is weeks away, but many consumers are already prepping for the annual holiday spending extravaganza -- and they may be on to something. Retailers, to be sure, are revving up the profit engines and setting their sights on Black Friday, traditionally the single biggest shopping day of the year. In the not-too-distant future, Christmas decor will be hanging from store rafters and weekly circulars will be advertising deals on coveted items. These tips can help consumers get their budgets in order, their money saved up and their plans in place for a smooth and financially sound holiday shopping season.

    Make a budget. Hold a "state of the union" about holiday expenses with your spouse, significant other or anyone with whom you expect to buy gifts this year. It may not be fun, but knowing in advance how much you can spend will alleviate a lot of stress. Make your holiday budget all-inclusive: gifts and holiday cards for everyone on your list, wrapping paper and stamps, decorations, food and drinks for parties and during shopping excursions and whatever else requires a cash outlay during the holiday season. Don't budget for more money than you have or know you can save by the deadline.

    Save now. Like, immediately. There is still a month to go and for anyone paid weekly, that's five paychecks before Black Friday. Fix a budget now and stash some cash for the big day. Given the magnitude of many holiday discounts, $30 out of each paycheck stretches pretty far. To ensure the savings intended for Black Friday are actually used for that purpose, consider setting up a targeted bank account. Many employers let employees divvy up their take-home pay into multiple accounts.

    Save up gift cards. Any cash-like asset can be put toward a holiday shopping budget, so get in the habit of saving up gift cards. Dig out old ones that may still hold a few dollars and take them along when you shop; every little bit helps. Alternatively, search a site such as Gift Card Granny and buy a few unwanted gift cards from a marketplace that sells the plastic at a discount off its underlying value.

    Pay with cash. Once you've decided on a holiday budget, stick to it. Credit cards are the enemy here -- they tempt you to spend now and worry later. Be firm and reject the siren call of credit when hitting the holiday sales. Pay for this year's goodies with cash, check or debit card so you don't spend more than you have. Steel yourself to walk away from holiday sales once you've hit your holiday budget limit.

    Purge to make room for new. Everyone has something to get rid of and there's still time to try selling it. In some parts of the country it's still warm enough to host a garage sale. You can also post sale items to Craigslist or with a local buy/sell/trade group on social media. You'll make room for the flood of new gifts while padding the holiday budget with a spot of extra cash.

    Make a list and check it twice. Holiday spending, especially on Black Friday, can easily turn into a cash-flow catastrophe. Seemingly everything is on sale everywhere, luring too many consumers to spend, spend, spend. To help stanch the outflow, make a list of recipients and the amount you're willing to shell out -- and then stick to it. Have a plan of action ready even before the Black Friday ads start rolling out.

    Clip and save. No need to go coupon crazy here, but if you spot a coupon for something on your list, use it now. It's always worthwhile to check some of the best coupon and deal sites. The same goes for store cash: Investigate the offerings from local merchants. Kohl's, for example, frequently runs Kohl's Cash promotions. If you have a similar medium on hand, spend it now on something for the holidays.

    Shop early. Once confined to the Friday after Thanksgiving, big discounts are increasingly leaking into the rest of November. Some retailers now offer a few "Black Friday" deals in advance. In the past, Amazon has released deals all week leading up to Black Friday and Walmart has hosted a "Super Saturday" sale in early November featuring Black Friday-like deals. Similar promotions from these and other retailers are likely this year. If an item on your list is advertised for less than your budget allotted, grab it. You'll get a running start on your shopping and save along the way.

    Sign up for alerts. Want to be among the first to glimpse those coveted Black Friday ads? There's little time for browsing once the crowds descend, so sign up for email lists, "like" retailers on Facebook and follow them on Twitter for an early look-see. Signing up for a Google Alert with the search query "Black Friday" will fill up your inbox with Black Friday ads and related coverage. With all that information at your fingertips, you'll know which items to target long before Black Friday arrives.

    Track your budget. Even if you shop early, be sure to keep your budget up to date. Print out a copy or store it on your smartphone and always carry it with you. Mark down how much you're spending and where and regularly check your progress against the plan. Accountability goes a long way toward keeping your finances straight during the holiday shopping season.

     

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    Big Changes to Social Security on the Way

    By Kimberly Lankford

    Q. If I sign up for Social Security at age 62 but am still working, will that affect my benefits?

    A. Yes. If you sign up for benefits before your full retirement age (age 66 for workers born in 1943 through 1954), your benefits will be reduced by as much as 25% for claiming early -- and reduced further if you earn more than a certain amount of money from a job or self-employment. (Investment earnings, pension benefits or withdrawals from an IRA or 401(k) don't count; pretax contributions to a 401(k) or other retirement plan do count if the amount is included in your gross wages.)

    For 2015 and 2016, you'll lose $1 from your benefits for each $2 you earn above $15,720. Say, for example, you turn 62 in January 2016 and plan to take Social Security benefits. If you were to fully retire, you would receive $600 a month ($7,200 for the year). You know, however, that you will be working and earning $20,800 (which is $5,080 above the $15,720 limit). In that case, you should let Social Security know about the estimated extra income when you apply for benefits. Social Security will then withhold $2,540 of your Social Security benefits ($1 for every $2 earned over the limit).

    Rather than withholding a portion of your benefits each month, Social Security will withhold all benefit payments from January 2016 through May 2016. (Because benefits will be withheld for the full month of May, the total amount withheld will, in this example, be $3,000 rather than $2,540.) Beginning in June 2016, you will receive your $600 benefit and continue to receive that much every month for the rest of the year. In 2017, you will receive the additional $460 that was withheld in May 2016. For more examples, see Social Security's How We Deduct Earnings From Benefits.

    A different limit applies in the year you reach full retirement age. In that year, you'll lose $1 for every $3 in earnings over $41,880 until the month you reach full retirement age. At that point, there's no earnings test; you can keep all of your benefits, no matter how much you earn.

    What happens if you are subject to the earnings test and you make more or less than you estimated? When you file your tax return, the IRS will let the Social Security Administration know how much wage and self-employment earnings you report. That figure will be compared with your estimate, and the government will reconcile the books by either sending you a check -- if your estimate of earnings was too high and the earnings test withheld too much of your benefits -- or requiring you to pay the balance.

    If you unexpectedly return to work and anticipate exceeding the earnings test, let the SSA know of the change in circumstances as soon as possible so your benefits can be withheld. If the tax return you file shows earnings that should have triggered reduced benefits, you'll be asked to pay back the excess in a lump sum or see future benefits reduced.

    Even though the earnings test affects your benefits, the money isn't lost forever. If your retirement benefits are withheld for several months because of your earnings, then your monthly benefit will be recalculated at your full retirement age and increased to make up for the months when your benefits were withheld because of the earnings test.

    For more information, see the Social Security Administration's How Work Affects Your Benefits.

     

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