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- 06/05/15--01:35: _Job Growth Surges, ...
- 06/05/15--02:00: _Week's Winners and ...
- 06/05/15--04:25: _Walmart Keeps It Al...
- 06/05/15--07:51: _You've Been Hacked ...
- 06/05/15--08:10: _Consumer Borrowing ...
- 06/05/15--09:48: _Market Wrap: Strong...
- 06/05/15--22:00: _4 Surprising Retire...
- 06/05/15--22:00: _Should You Take a S...
- 06/05/15--22:00: _The 4 Best Investme...
- 06/05/15--22:00: _The 10 World's Rich...
- 06/05/15--22:00: _Seeking a Last-Minu...
- 06/07/15--22:00: _5 Easy Ways to Save...
- 06/07/15--22:00: _Wall Street This We...
- 06/07/15--22:00: _How to Choose the R...
- 06/07/15--22:00: _A Complete Guide to...
- 06/07/15--22:00: _6 Telltale Signs Yo...
- 06/07/15--22:00: _Don't Touch the Min...
- 06/08/15--01:34: _Survey: Slow 2nd Qu...
- 06/08/15--02:17: _Apple Unveils New S...
- 06/08/15--02:38: _Sears Reports Small...
- 06/05/15--01:35: Job Growth Surges, Wages Push Higher in May
- 06/05/15--02:00: Week's Winners and Losers: Apple Ticks On, Disney Ticks Off
- 06/05/15--04:25: Walmart Keeps It All in the Family, Chair Passed to Penner
- 06/05/15--07:51: You've Been Hacked ... Do This Right Now
- Notify the credit agencies (Equifax, Experian, TransUnion) and request a 90-day credit alert. (Each reporting agency is supposed to notify the others, but you may want to contact all three yourself.) The alert tells businesses to contact you before opening any new accounts in your name. You can renew the alert every 90 days, or you're entitled to keep it in effect for seven years if you find that your identity is stolen and file a report with police.
- You might consider asking the reporting agencies to place a full freeze on your credit. This blocks any business from checking your credit to open a new account, so it's a stronger measure than a credit alert. But you should weigh that against the hassle of notifying credit agencies to lift the freeze which can take a few days every time you apply for a loan, open a new account or even sign up for utility service.
- When your credit card bill comes, check closely for any irregularities. And don't overlook small charges. Crooks are known to charge smaller amounts, usually under $10, to see if you notice. If you don't, they may charge larger amounts later.
- Get a free credit report once a year from at least one of the major reporting agencies (Equifax, Experian, TransUnion), and review it for unauthorized accounts. Ignore services that charge a fee for credit reports. You can order them without charge at www.annualcreditreport.com. If you order from each agency once a year, you could effectively check your history every four months.
- Some experts say there's not much to be gained from a paid credit monitoring service. But it can't hurt to sign up for any monitoring offered for free by a company or any other entity that may have held your information when it was hacked. Note: These services will tell you if a new account is opened in your name, but they won't prevent it, and many don't check for things like bogus cellphone accounts, fraudulent applications for government benefits or claims for medical benefits. Some do offer limited insurance or help from a staffer trained to work with credit issuers and reporting agencies.
- Contact the credit issuer to dispute fraudulent charges and have the bogus account closed.
- Request your credit report and ask the reporting agencies to remove bogus accounts or any incorrect information from your record. See tip No. 1 on setting up a credit alert and/or freeze.
- Submit a report through the FTC website: www.consumer.ftc.gov. Click the "privacy & identity" tab, which will walk you through creating an affidavit you can show to creditors.
- Keep copies of all reports and correspondence. Use certified mail to get delivery receipts, and keep notes on every phone call.
- After a hack, scammers may try to use the stolen data to trick you into giving up more personal information. They can use that info to steal money in your accounts or open new credit cards.
- Don't click on any links from emails. Bad software could be downloaded to your computer that can steal account passwords.
- You might get letters in the mail saying you won a tablet or vacation and give you a phone number to call. Don't do it. It's likely a ploy to gather more information from you.
- Hang up the phone if you get a call asking for account numbers or other information. Scammers may also send texts, so don't click on any links from numbers you don't know.
- 06/05/15--08:10: Consumer Borrowing Surges in April, Up $20.5 Billion
- 06/05/15--09:48: Market Wrap: Strong Employment Report Leads Stocks Lower
- Sears (SHLD) reports quarterly financial results before U.S. markets open.
- H&R Block (HRB) reports quarterly financial results after U.S. markets close.
- 06/05/15--22:00: 4 Surprising Retirement Saving Secrets to Success
- 06/05/15--22:00: Should You Take a Super-Long-Term Car Loan?
- 06/05/15--22:00: The 4 Best Investments for Lazy Investors
- 06/05/15--22:00: The 10 World's Richest Athletes of All Time
- Ion Tiriac: How many athletes can compete at elite levels in two sports, especially ones as diverse as tennis and ice hockey? Romanian-born Tiriac did just that, starting out as a hockey player on the Romanian Olympic Team in 1964. He switched to professional tennis, winning 22 career doubles tennis titles. Tiriac is now worth approximately $2 billion through his multiple business enterprises in Germany and Eastern Europe.
- Michael Jordan: The six-time NBA champion and majority owner of the Charlotte Hornets is worth approximately $1 billion. Besides being a sports mogul, Jordan has made millions off commercial endorsements, most famously with Nike and his popular Air Jordan line.
- Michael Schumacher: The German Formula One driver comes in third with $800 million in net worth. His racing career began in 1991, and his annual income from endorsements has been as high as $50 million. He has kept a very low profile since a near-fatal skiing accident in 2013.
- Arnold Palmer: The legendary golfer is worth $675 million through his many golf-related industries and endorsements, not to mention prize money from his 62 wins on the PGA Tour during his playing days.
- Roger Staubach: The former Navy man and Dallas Cowboys quarterback is worth approximately $600 million, mostly through real estate dealings.
- Tiger Woods: At one time, it was inconceivable that Woods would not top this list someday -- and he may still do so -- but after his infamous family troubles and the subsequent degradation of his golf game, Woods is no longer a sure thing as the eventual richest athlete. He lost many endorsements, but he still has tremendous star power as well as $580 million in net worth.
- Magic Johnson: The former LA Lakers star and entrepreneur has accumulated $500 million through his basketball earnings, endorsements, and his investments through Magic Johnson Enterprises. MJE is known for attempting to establish goods and services in underserved urban areas.
- Ayrton Senna: While Senna passed away in a tragic racetrack accident in 1994, his net worth at the time of his death was approximately $400 million. Certainly, the Brazilian racing star would be further up this list had he survived.
- Floyd Mayweather Jr.: Finally, we get to Money. At the time of this listing, Mayweather's net worth was estimated at $380 million, so it's possible that after the Pacquiao fight payout is finalized he will be closer to sixth or seventh place. Mayweather remains undefeated with 48 wins, and will likely fight one or two more times before calling it a career.
- David Beckham: The retired soccer star and husband of "Posh Spice," Beckham is worth approximately $350 million.
- 06/05/15--22:00: Seeking a Last-Minute Discount on a Cruise? Don't Bank on It
- 06/07/15--22:00: 5 Easy Ways to Save Money Without Wasting Time
- 06/07/15--22:00: Wall Street This Week: Apple Speaks, Netflix Meets
- 06/07/15--22:00: How to Choose the Right Financial Adviser
- 06/07/15--22:00: A Complete Guide to Refinancing Your Home Mortgage
- 06/07/15--22:00: 6 Telltale Signs You're in Great Financial Health
- 06/07/15--22:00: Don't Touch the Minibar! How to Avoid 10 Annoying Hotel Fees
- 06/08/15--01:34: Survey: Slow 2nd Quarter to Drag on 2015 Economic Growth
- 06/08/15--02:17: Apple Unveils New Streaming Music Service
- 06/08/15--02:38: Sears Reports Smaller 1Q Loss but Sales Keep Sliding
WASHINGTON -- U.S. job growth accelerated sharply in May and wages picked up, signs of momentum in the economy that bolster prospects for an interest rate hike in September.
Nonfarm payrolls increased 280,000 last month, the largest gain since December, the Labor Department said Friday.
While the unemployment rate rose to 5.5 percent from a near seven-year low of 5.4 percent in April that was because more people, likely new college graduates, entered the labor force, indicating confidence in the jobs market.
This certainly puts more ammunition in the Fed's plan to start lift-off in September.
"This certainly puts more ammunition in the Fed's plan to start lift-off in September," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
The dollar rallied against a basket of currencies, while prices for U.S. government debt dropped sharply. U.S. stock index futures fell.
Doubts had sprung up in financial markets over whether the U.S. central bank would be able to raise interest rates this year after weak data on consumer spending and industrial production suggested the economy lacked vigor early in the second quarter after slumping at the start of the year.
The Fed has kept overnight rates near zero since December 2008. Officials from the U.S. central bank will meet on June 16-17.
U.S. gross domestic product contracted at a 0.7 percent annual pace in the first quarter, although the drop probably exaggerated the economy's weakness given a mix of temporary factors at play.
The sturdy jobs reports joined May automobile sales and manufacturing data in suggesting that growth was gaining some traction after getting off to a slow start in the second quarter, in part because of the lingering effects of a strong dollar and spending cuts in the energy sector.
Economists polled by Reuters had forecast payrolls rising 225,000 last month and the unemployment rate steady at 5.4 percent. May payroll gains lifted job growth above last year's average of 260,000 jobs a month.
The labor force participation rate, or the share of working-age Americans who are employed or at least looking for a job, increased 0.1 percentage point to 62.9 percent last month.
A broad measure of joblessness that includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment was unchanged at 10.8 percent.
The increase in average hourly earnings took the year-on-year gain to 2.3 percent, the largest rise since August 2013.
Wages are poised to push higher against the backdrop of firming demand for entry-level workers and a better composition of jobs that are being created. In addition, many states have raised the minimum wage and some large corporations have been increasing pay for workers.
Walmart, the largest private employer in the United States, this week announced it would raise minimum wages for more than 100,000 U.S. workers, its second wage hike this year.
Payroll gains last month were broad-based, though the mining sector purged more jobs as it works through the thousands of cuts announced by oil-field companies.
Manufacturing employment increased 7,000 after adding 1,000 jobs in April. Mining payrolls fell 18,000, logging the fifth straight month of declines.
Schlumberger (SLM) has announced about 20,000 layoffs this year. Baker Hughes (BHI) and Halliburton (HAL) are also cutting thousands of jobs.
Construction employment increased 17,000, reflecting a strengthening housing market. The average workweek was steady at 34.5 hours.
-With additional reporting by Ryan Vlastelica in New York.
Apple (AAPL) -- Winner
Production of Apple Watch devices is finally starting to catch up with demand. Apple announced that the popular smartwatch will be available for purchase in several new countries as well as at stateside Apple Store locations later this month.
There hasn't been any in-store availability since April's launch, but now Apple is saying that all of the orders placed through the end of May outside of a single watch model will be shipped within two weeks.
Apple didn't have a perfect week. There was a recall for one of its Beats speakers on fire hazard concerns. That's not fun, but the Apple Watch news is good enough to land the world's most valuable consumer tech company in the winner's circle.
Pier 1 Imports (PIR) -- Loser
The market isn't a fan of peer pressure -- or Pier pressure. Wedbush analyst Seth Basham downgraded shares of the home furnishings retailer to a ho-hum neutral rating, fearing the implications of the chain resorting to large storewide markdowns in recent weeks.
Pier 1 had said late last year that it wouldn't resort to storewide sales, but here it is doing exactly that. Pier 1's stock has been one of the market's winners since bottoming out at 10 cents six years ago. It made the most of the spike in sales during the housing market's rebound, but it's been struggling lately.
Amazon.com (AMZN) -- Winner
The country's most reputable retailer -- according to brand quality tracker Reputation Institute -- just happens to be the largest online retailer. Amazon took top honors for the third year in a row.
Reputation Institute bases its annual list on tens of thousands of interviews, weighing consumer perception of brands. It does point out that reputation scores in general have been trending higher in recent years, making Amazon's feat of coming out on top for the third consecutive time that much more impressive.
Disney (DIS) -- Loser
The family entertainment giant isn't always "the happiest place on Earth" for its employees. The New York Times ran a scathing article this week about Disney laying off 250 members of its IT team in Orlando, replacing them with cheaper foreign immigrants on temporary work visas.
This is a sliver of the 74,000 people that Disney does employ in Central Florida, but it still looks bad. Turning to these temporary H-1B visas for technology jobs is intended for foreigners with advanced tech skills that can't be found closer to home. However, since these foreign jobs merely replaced existing hires -- and the article points out that some of them were asked to train their replacements -- this doesn't seem to be in the spirit of the federal guidelines.
The layoffs actually happened in January, but The New York Times article is broadcasting the details this week. It's not working wonders for Disney's fairy tale reputation.
Ambarella (AMBA) -- Winner
The company behind the video chips powering HERO wearable cameras and Dropcam security recorders posted blowout quarterly results this week. Ambarella has beaten Wall Street's profit targets by a double-digit percentage margin every quarter since going public three years ago.
Analysts were generally impressed. Topeka Capital Markets boosted its price target to $105 from $75, and Needham upgraded its rating on the stock. Semiconductors can be a cutthroat business, but Ambarella's differentiated solutions continue to gain traction.
Motley Fool contributor Rick Munarriz owns shares of Ambarella and Walt Disney. The Motley Fool recommends and owns shares of Amazon.com, Ambarella, Apple and Walt Disney. Try any of our Foolish newsletter services free for 30 days. Looking for a winner for your portfolio? Check out The Motley Fool's one great stock to buy for 2015 and beyond.
FAYETTEVILLE, Ark. -- Walmart (WMT) is passing the chairmanship of the world's largest retailer from the eldest son of late founder Sam Walton to a third generation.
The company said that board Chairman Rob Walton will step down and be succeeded by Vice Chairman Greg Penner, who is his son-in-law.
The change took effect at the end of the company's annual shareholders' meeting Friday and came despite pressures from labor-backed worker groups to name an independent chairman. The calls for independent leadership mounted in the wake of allegations of bribery in Mexico and other countries Walmart operates in that came to surface in spring 2012.
Walton, son of Walmart founder Sam Walton, has been chairman since 1992. The company says the 70-year-old will continue to serve as a director. Jim Walton, another son of the late founder, also remains on the board.
Penner, whose background is in technology and finance, will be the company's third chairman in the company's 53-year history. Rob Walton took over as chair upon the death of his father in 1992. The announcement comes Walmart is facing challenges on all fronts, from how it runs its operations to how it treats its workers.
Penner, 45, joined Walmart as a management trainee and held a number of positions including senior vice president of finance and strategy for Walmart.com and chief financial officer for the Japan unit. He had been a general partner of Madrone Capital Partners, an investment management firm since 2005. He joined Walmart's board in 2008. Rob Walton noted on stage at the meeting that Penner is married to his daughter.
Penner had been the chairman of the company's technology and e-commerce committee since it was formed in 2011 and has been instrumental in guiding the company on the technology front.
"You've been a great mentor. No one can fill your shoes," said Penner, referring to Walton. Penner joined Walton on stage as well as Doug McMillon, the company's CEO, and former CEO David Glass who served at the helm from 1988 to 2000.
Walton said that Penner "brings an ideal blend of finance, technology, and international business expertise -- as well as a deep knowledge and love of Walmart -- to this role."
The announcement wasn't a surprise after Walton named Penner as vice chairman at last year's annual shareholders' meeting. The Walton family controls about 50 percent of the company's shares.
Keeping with Walmart's practice of showcasing celebrities at the annual event, the meeting was being hosted by actress Reese Witherspoon. Singers Brian McKnight, Rod Stewart and Ricky Martin also performed on stage. Entertainer Carol Burnett was on stage, too, and did her trademark Tarzan call.
"I was born and raised in the South. It's nice to be back in the South," said Witherspoon. "I can get my y'alls out." She said she grew up shopping at Walmart.
The meeting, held at Bud Walton Arena at the University of Arkansas, 30 miles away from the company's headquarters in Bentonville, was packed with 14,000 workers from all over the world.
Despite all the hoopla, the company is under a microscope. Revenue at U.S. stores open at least a year have risen for three straight quarters, but that came after seven straight declines. And the recent increases have been small.
Like many retailers catering to lower-income shoppers, Walmart has been hurt by an uneven economy that hasn't buoyed its customers financially. Meanwhile, shoppers are increasingly researching and buying online, and the company faces intensifying competition from dollar stores and Amazon.com (AMZN).
To counter that pressure, Walmart is accelerating the rollout of smaller stores and also investing in technology, like online grocery services. It just launched a subscription service for online shoppers with an annual fee of $50.
But the company, which is also under pressure from labor-backed groups to treat its workers better, is also investing in its workers. The company announced earlier this year $1 billion in wage increases and improved training that includes raising the minimum hourly pay for its workers to $9 in April. By next February, Walmart will raise that minimum to $10.
The company is also relaxing the dress code for the 1.2 million workers at its namesake U.S. stores, piping music to its stores and adjusting the temperatures so workers aren't too cold or hot.
The changes haven't quieted labor groups, which say workers are still struggling. They are pushing for wages of $15 an hour. Among the proposals by shareholders was a call for an independent chairman who doesn't serve as an executive at Walmart. The proposal and four other shareholder proposals were voted down by a majority of votes, according to a preliminary tally because of the Walton family's control.
Walmart is expected to file the final tally of proxy votes next week with the Securities and Exchange Commission.
During the meeting, Walmart CEO and President Doug McMillon, who succeeded Mike Duke to the top position in February 2014, called on workers to fight complacency to serve customers better.
"We're threatened much more by the things we control than those outside our influence," McMillon said. "Our real villains are things like bureaucracy, complacency, a lack of speed or a lack of passion. Let's fight those villains together."
Venanzi Luna, a worker in the Pico Rivera, California, Walmart store that was closed in April, also addressed shareholders Friday. Company officials said the store had to close temporarily because of plumbing issues. But Luna and other workers said it was because it was the site of political activism and the move was in retaliation against the workers.
"Our managers say our stores closed for 'plumbing problems,' but the real reason is that my store had been speaking out for change at Walmart," she said.
"Our board of directors needs an independent chair committed to the highest standards of integrity."
Marc Goumbri, a spokesman at the United Food and Commercial Workers International Union, said that making Penner chairman further cements the family's power over the board and company.
"Instead of listening to and respecting Walmart worker shareholders who have been calling on Walmart empire to implement a new policy establishing an independent chairperson, Walmart and the Waltons have once again decided to elevate family members to powerful positions," he said.
A government investigation is still ongoing regarding possible violations of the Foreign Corrupt Practices Act, which prohibits companies from bribing foreign officials.
-Choi contributed to this report from New York.
The entire U.S. federal workforce may be at risk after yet another intrusion from what security experts believe were hackers based in China. The Department of Homeland Security says that data from the Office of Personnel Management the human resources department for the federal government and the Interior Department has been infiltrated.
It isn't the first and it follows massive data breaches at health insurance companies, major U.S. banks such as JPMorgan Chase (JPM) and retailers such as Target (TGT) and Home Depot (HD).
Here's what to do if you think you've been compromised.
First Things First
The FTC now has a website www.identitytheft.gov that provides step-by-step advice and more information on what to do if you think you have been the victim of a data breach.
WASHINGTON -- Consumer borrowing surged again in April, helped by the largest gain in credit card borrowing in a year. Consumer borrowing expanded by $20.5 billion in April, the Federal Reserve reported Friday. That was down only slightly from a gain of $21.3 billion in March which was the biggest increase in eight months. The strong gains pushed consumer credit to a fresh record of $3.38 trillion.
Borrowing in the category that includes credit cards jumped by $8.6 billion, the largest rise in 12 months. Borrowing in the category that covers auto and student loans advanced a solid $11.9 billion, after an even bigger $16.5 billion increase in March.
Economists expect consumers, who have seen strong job gains over the past year, will keep borrowing and spending in coming months, helping to boost overall economic growth.
The overall economy went into reverse during the January-March quarter, reflecting the adverse impacts from a harsh winter, cutbacks in investment by energy companies and a stronger dollar, which hurt U.S. export sales.
Gross domestic product, the economy's total output of goods and services, contracted at an annual rate of 0.7 percent in the first quarter. But economists say it will rebound to growth of around 2 percent to 2.5 percent in the second quarter, helped by stronger consumer spending. The expectation is that consumer spending will be supported in coming months by continued strong growth in employment.
The Fed's monthly consumer credit report doesn't cover mortgages or any other loans secured by real estate such as home equity loans.
The overall category is up 6.6 percent from a year ago. The category that covers credit cards has risen 3.2 percent in the past year while the category that includes auto and student loans is up a much stronger 7.9 percent.
Consumers' use of credit cards to support their spending has lagged in the current recovery. Economists attribute that in part to the heavy job losses during the recession which made households more cautious about building up credit card debt.
NEW YORK -- The Dow and S&P 500 fell Friday as increasing expectations the Federal Reserve could raise rates as soon as September offset optimism over a recovery in the U.S. labor market.
Stronger-than-expected jobs data for May and a pickup in wages were the latest signs of better momentum in the economy.
Wall Street's top banks said they expect the Fed to begin raising interest rates in September, followed by another increase before the end of the year, according to a Reuters poll.
I think everyone is just waiting to see what happens when rates do start to rise.
"I think everyone is just waiting to see what happens when rates do start to rise."
The S&P utilities index, which includes top dividend payers that tend to fall as prospects for higher rates rise, was down 1.3 percent and among the weakest-performing sectors. The U.S. benchmark bond yield hit its highest since October.
S&P financials, which benefit from higher rates, were up 0.6 percent, among the day's best performing sectors, while the S&P energy index added 0.7 percent. Energy shares bounced with oil prices.
The Dow Jones industrial average (^DJI) fell 56.12 points, or 0.3 percent, to 17,849.46, the Standard & Poor's 500 index (^GSPC) lost 3.01 points, or 0.1 percent, to 2,092.83 and the Nasdaq composite (^IXIC) added 9.33 points, or 0.2 percent, to 5,068.46.
Indexes Down on the Week
For the week, the S&P 500 fell 0.7 percent, its second straight week of losses, the Dow was down 0.9 percent and the Nasdaq was down 0.03 percent.
The Fed has kept overnight rates near zero since December 2008 because the economic recovery has been slow. Cheap credit, however, has helped bolster the U.S. stock market.
New York Fed President William Dudley said he was concerned the economy may not be growing fast enough to absorb the slack among workers sidelined by the financial crisis. Still, Dudley said he expects the Fed would be in a position to raise rates later this year.
Boosting the Nasdaq, shares of Regeneron Pharmaceuticals (REGN) rose 4 percent to $539.40 after a preliminary FDA review of an experimental drug it makes with Sanofi (SNY).
Among decliners Friday were gold miners, which dropped along with gold prices. Shares of Newmont Mining (NEM) were down 3.3 percent at $25.91.
Zumiez (ZUMZ) dropped 19.3 percent to $24 as it estimated current-quarter profit and revenue below analyst expectations.
NYSE decliners outnumbered advancers 1,629 to 1,426, for a 1.14-to-1 ratio; on the Nasdaq, 1,782 issues rose and 962 fell, for a 1.85-to-1 ratio favoring advancers.
The S&P 500 posted 16 new 52-week highs and six new lows; the Nasdaq composite recorded 117 new highs and 42 new lows.
About 6.2 billion shares changed hands on U.S. exchanges, slightly below the 6.3 billion daily average for the last five sessions, according to BATS Global Markets.
-With additional reporting by Tanya Agrawal.
What to watch Monday:
By Hal M. Bundrick
NEW YORK -- Dreams of early retirement are often reserved for Silicon Valley startup nerds, athletic superstars and lottery winners. But run-of-the-mill working stiffs like us? No chance, right? Well, don't count us out yet. More than a quarter (26 percent) of 3,449 currently employed workers who took part in a recent study said they plan to retire before they turn 65. The Allianz LoveFamilyMoney report surveyed 35- to 65-year-old Americans with household incomes of at least $50,000.
So, maybe there is still a chance. The study also revealed four interesting traits shared by the optimistic early retirement hopefuls among us. It's a good chance you haven't heard these tips before: they go well beyond the typical retirement saving advice of "start early," "live below your means" and "earn your 401(k) match."
For example, Tip One: Stay Married.
The survey found workers on-target for an early retirement are more likely to be married -- 76 percent of people on track for an early retirement are married versus 68 percent who never plan to retire. And they're making it stick. More than three-quarters (77 percent) of the respondents are still in their first marriage, compared with 70 percent of those who never plan to retire.
Secondly, they share similar financial habits. The study discovered most of the couples were just naturally "savers" instead of "spenders" and shared a "practical" approach to financial matters compared with those who plan to work forever.
And they talk things out. You've probably heard the stories of couples who hide money from each other, engage in "secret spending" and don't have a full debt disclosure policy. However, these couples -- well on their way to an early retirement -- find it "very easy" or "somewhat easy" to talk with their spouse or significant other about matters of money (90 percent compared with 77 percent of those who plan to be work bound).
And rather than benchmarking their financial success to their neighbors or the S&P 500, the early retirees-to-be compare themselves to their parents' financial status (21 percent compared with 14 percent of those who never plan to retire).
While we're at it, let's bust a retirement myth: Having children isn't a factor in delaying retirement. The study didn't find any difference in expected retirement age based on whether or not respondents have children.
But deciding when to retire also requires a bit of consideration regarding the timing of federal retirement and medical benefits.
"From a Social Security standpoint, you can start getting lower benefits as early as age 62, or you can delay retirement up to age 70 for your maximum monthly benefit amount," says Doug Walker, deputy commissioner of communications at the Social Security Administration, in a blog post. "This is one of the most important and challenging decisions you'll make in your life. When you decide to retire affects not only you, but it could have serious, long-lasting consequences for your family members, too."
For example, retiring at age 62 will trigger Social Security benefits about 25 percent lower than a full benefit payout at age 66. If you delay Social Security until age 70, the monthly amount is 32 percent more than at full retirement age. That kicks your monthly benefits up by $570 -- or $6,840 a year.
And if you retire early without health insurance, you won't qualify for Medicare until you reach age 65 unless you've been on Social Security disability benefits for at least 24 months. That means you'll have to cover insurance premiums with a portion of your retirement income. However, you may qualify for Medicaid or a Special Enrollment Period for coverage through the HealthCare.gov insurance marketplace. And you may also be able to earn a tax credit and lower your out-of-pocket costs.
Retiring early requires a bit of timing, full disclosure, clear communication -- and apparently a strong marriage. All goals worth aspiring to.
reached all-time highs.
In the first quarter of 2015, the average term for a new-vehicle loan was 67 months -- more than five years. The average term for a used-car loan was almost as long, 62 months.
Almost 30 percent of new-vehicle loans in the first quarter were even longer, 73 to 84 months, Experian said. That's six to seven years.
Until recently, such long-term loans for cars were very rare. Are they a good idea? Should you consider one?
Buying More Expensive Cars -- and Borrowing More to Do It
Here's what's driving the trend: People are buying more expensive cars.
On one hand, people are taking on more debt. But on the other hand, "People really are getting more car for the money," says Jessica Caldwell, director of industry analysis for Edmunds.com.
Caldwell notes that while the average new-vehicle loan term rose even further in May, to 67.9 months -- the highest ever -- interest rates also fell. "The average new vehicle loan APR fell to 4.6 percent in May from 4.8 percent in April," she says. That's likely due in part to "zero-percent" financing offers from automakers, which Caldwell says were "abundant" in May.
Longer-term loans and lower interest rates are allowing buyers to spend more on their new cars. Kelley Blue Book said that the average transaction price for a new vehicle in the U.S. in May was $33,363, up 4.3 percent from a year ago. KBB senior analyst Karl Brauer noted that some of the increase is being driven by strong demand for pickups and SUVs, thanks to lower gas prices. SUVs tend to be more expensive than comparable cars.
Not surprisingly, loan amounts are up, too. Experian says that the average new-vehicle loan was $28,711 in the first quarter of 2015, up from $27,612 a year ago.
But do these loans make sense for consumers? Isn't it a bad idea to take on more debt just to have a fancier car?
Isn't a Longer-Term Car Loan a Bad Idea?
The short answer: Not necessarily.
There are two factors that could make a longer-term loan make sense. First, interest rates are very low right now, especially if you score one of those zero-percent financing deals. But even if you don't, rates are still very low, historically speaking -- especially if you have good credit. That means the overall cost of buying the car might be lower than you think, even with a longer-term loan.
Second, you might not mind keeping your car for six or seven years -- or even longer. Lots of people are doing it: The average age of a "light vehicle" (the industry term for cars, pickup trucks, and SUVs) on the road in the U.S. is now a little over 11 years, according to IHS Automotive.
IHS' analysts don't expect that to change any time soon, in part because of the increasing quality of today's cars, trucks and SUVs. The intense competitive pressure to improve quality in the auto business means that today's cars -- from just about any automaker -- have the potential to last a very long time and accumulate very high mileage without needing huge, costly repairs. That's a big change from what was true as recently as a decade ago.
So if a longer-term loan helps you buy a car you're willing to keep for a longer time, it might actually make good sense in the long run.
Longer-Term Car Loans Can Make Sense, for Some
But do these longer loans make financial sense? If you get a good interest rate, they can.
If you're the kind of person who tends to keep new cars for a long time, and the lower monthly payment on a longer-term loan makes it comfortably affordable, longer-term loans can be a useful tool. And keeping a car for a long time nearly always works out better -- financially speaking, at least -- than buying a new one every few years.
The risk with any car loan is that if your financial situation changes and you have to sell the car, you could end up owing more on the loan than your car is worth at that moment. Obviously, the longer the loan, the greater the risk that your financial situation will change before you've paid it off. It's hard to really know what your finances will look like five, six or seven years from now.
But if you're comfortable that you can handle that risk, these longer-term loans can give you a way to get into the ride of your dreams at a price -- or at least a monthly payment -- that's comfortably affordable.
Motley Fool contributor John Rosevear has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. Investing for the long term? Check out our free report on one great stock to buy for 2015 and beyond.
By Julie Rains
Here's good news for time-strapped investors: You can ignore your investments and still get rich.
You don't have to spend endless hours conducting research, developing watch lists, trading shares, monitoring performance and rebalancing your portfolio. Fortunately, there are investments that require minimal upfront work and even less maintenance on an ongoing basis. Here are the four best investments for lazy investors.
Portfolios created and managed by robo-advisers require minimal involvement beyond signing up for the service. They are diversified among various asset classes and market segments, such as U.S. stocks, stocks of emerging markets worldwide, U.S. corporate bonds, international bonds, etc. Depending on the adviser's approach, portfolios may be tilted toward small caps and value funds.
Robo-advisory portfolios often contain commission-free ETFs, which tend to be low-cost and tax-efficient. Generally, rebalancing and tax-loss harvesting are included in the services provided to investors (or are available for a nominal fee).
Choose an adviser based on the firm's investment philosophy, account minimums, asset-under-management fees, other investment fees (if any) and unique features, such as Betterment's goal-setting emphasis or Wealthfront's direct indexing service.
To invest your money, respond to prompts regarding your time horizon and risk tolerance. Typically, you'll enter your age or number of years until you reach retirement (or other financial goal), and choose among conservative, moderate, and aggressive portfolios.
Target-date funds, or life-cycle funds, are often "funds of funds" comprised of passively managed (index) and/or actively managed mutual funds. These typically give investors a balanced portfolio that adjusts from riskier, growth-oriented holdings like stocks toward safer, more stable ones such as bonds as you get closer to the target date associated with your financial goal.
Generally, target dates are aligned with the investor's expected year of retirement. For example, if you are 35 years old in 2015, you may consider purchasing a fund with the target date of 2045 -- the year you turn 65.
To choose a fund, consider the target date, investment-related fees (such as sales loads), expense ratio, mix of underlying funds and glide path, which describes the rate at which the portfolio moves from more aggressive to more conservative investments.
Blue Chip Stocks
Blue chip stocks represent well-established, nationally recognized, financially stable, and reliable companies, typically with consistent business performance. Definitions vary, but experts name the 30 stocks in the Dow Jones industrial average (^DJI) as blue chips.
Companies with household names such as Nike (NKE), Johnson & Johnson (JNJ) and Intel (INTC) are part of the Dow. Often, blue chip stocks pay dividends, which can boost overall performance when reinvested.
To build a portfolio of blue chip stocks, accumulate shares of individual stocks through your brokerage firm or purchase a Dow index fund, such as iShares Dow Jones U.S. ETF (IYY).
Alternatively, create a blue chip motif at Motif Investing, where you can buy up to 30 stocks for $9.95. Weight your stock positions according to your preferences, such as market capitalization. Periodically, rebalance using this broker's tools.
Lazy portfolios typically consist of a few to several handpicked mutual funds or ETFs that represent the broader stock and bond market domestically and worldwide. These portfolios are diversified, low cost, and minimalistic. Their purpose is to deliver reasonably consistent returns in varied market conditions.
Choose among portfolios with as few as two or as many as 10 funds. For example, you might adopt the Coffeehouse portfolio as specified by Bill Schultheis, author of The Coffeehouse Investor. Accumulate shares in these funds to create an investment portfolio that mirrors the percentages indicated by the model portfolio. This particular portfolio contains Vanguard funds that you can purchase free of commissions with a Vanguard account.
Periodically, rebalance by buying more shares of funds that lag percentage-wise in the portfolio.
There are no guarantees that investments for lazy investors (or diligent ones) will deliver positive returns, year after year. But after making initial purchases, you can minimize the time spent on managing your investments and enjoy other pursuits.
The key to building a healthy portfolio is consistency, rather than finesse. On a regular basis, invest your money, avoid withdrawals when you are in a crisis or panic mode, and keep contributing to your investment accounts in all market conditions.
Are you a lazy investor? What investments have you discovered to be easy to manage?
Who's at the top of the list? Michael Jordan? Guess again: Ion Tiriac, of course. Who?
For those of us in middle age, he will always be remembered for his mustache and his hilarious Miller Lite ad with Bob Uecker, but his wealth has far surpassed his sporting fame -- at least in America.
Read on to find out about Tiriac and the others in the top 10 list, according to each athlete's category of CelebrityNetworth.com. We have edited the list to leave out those who were only coaches, executives or managers -- we believe at least some direct professional-level competition in the sport was necessary for inclusion -- but we will mention those other sporting figures at the end along with their net worth.
The next five on the list are Shaquille O'Neal, Roger Federer, Greg Norman, Dale Earnhardt Jr. and Alex Rodriguez of the New York Yankees. Will any of these five, or any other athletes (maybe LeBron?), overtake the current top 10? Only time will tell.
By Brian Sozzi
NEW YORK -- Summer is almost here and for many individuals and families, that means it's time to go on a cruise.
Be mindful, though, there are several big industry trends to know before you set set sail.
According to the Cruise Line Industrial Association, a record 23 million passengers are expected to take a cruise this year. Once on-board gargantuan ships from the likes of Royal Caribbean (RCL), Norwegian Cruise Line (NCLH) and Carnival (CCL), chances are the vacation experience may seem different than on last year's water-based vacation.
Most in the industry have vastly improved the speed of their Wi-Fi connections. Dining options have also been enhanced to feature dishes and cocktails inspired by celebrity chefs.
But there are also some broader trends of which to be aware. TheStreet takes a look at three of the biggest.
1. Say goodbye to last-minute discounts. For the last several years, growing access to online booking has led to cutthroat pricing on cruise vacations. The cruise lines essentially trained customers to believe that the best prices could be had if they waited to the last minute, instead of booking months earlier. That philosophy is now being done away with industrywide in order to protect profits.
Having ships booked well in advance of peak vacation season allows a cruise line to better plan their business and articulate financial goals to Wall Street.
The buzzwords being tossed about by execs are "revenue management" and protecting "price integrity."
"We are at roughly 80 million passenger cruise days a year, so $1 a day across our fleet is $80 million and $10 a day is $800 million -- so revenue management is absolutely a prime area of focus as it's the biggest driver we have and small tweaks add up to real dollars," said Carnival CEO Arnold Donald in a March 27 earnings call.
He explained, "So whether it's the actual tools that we use, the management systems that allow us to do more inquiry and change prices at smaller increments faster, or whether it's actual presentation and psychology and packaging on pricing, all of those are areas that we continue to mine."
Royal Caribbean has undertaken two initiatives with the goal of supporting higher-priced vacations.
First, it has begun marketing sailings earlier in the year. Second, in March, Royal Caribbean adopted a new policy that it wouldn't offer any last-minute discounts on bookings in North America. On an April 20 call, Royal Caribbean CEO Richard Fain conceded the decision may cost it some bookings in the short-term, which was reflected in the latest financial guidance it shared with Wall Street.
Norwegian Cruise Line is singing the same tune as its rivals. "I reject the notion that the only way to stimulate demand is by dropping prices, and that the industry can't increase prices over time," said Norwegian Cruise Line CEO Frank Del Rio in a Feb. 25 interview with TheStreet.
2. The crowds at the pool and bar may feel bigger this year. Amid an improving U.S. economy, the cruise industry enjoyed a strong "wave season." The wave season is the winter period in which people book their summer vacations.
"Overall, we have had a good wave period with both booking volumes and pricing exceeding last year's levels," said Royal Caribbean's Fain. He added, "We are seeing consistently strong booking trends for guests from North America, while trends during wave were particularly strong relative to expectations at the same time last year for Caribbean itineraries."
Carnival was even more bullish on the wave season. "We are enjoying a strong wave season, and are particularly pleased with demand for the Caribbean for the remainder of the year," said Donald. According to Carnival, its bookings during this year's wave season were strong, and prices were up "nicely."
As for Norwegian Cruise Line, booking trends during wave season in Europe and Alaska were characterized as strong and the Caribbean was seen as "very good."
3. All of the cool new ships are going to China. Sorry U.S. vacation goers, you may have to settle for riding the waves with just slightly upgraded amenities instead of the absolutely newest and coolest ships.
Cruise line operators want a sliver of the rising affluence of the Chinese, and are positioning their most technologically advanced ships in that country's waters.
Carnival, which is profitable in China, said CEO Arnold Donald in an interview with TheStreet, already has four vessels in China in its Costa and Princess lines and will debut another ship in 2016. The company projects 2.5 million passenger cruise days in China this year, jumping to 4 million or so next year.
As for Royal Caribbean, it positioned its newest, most advanced ship ever, the Quantum of the Seas, in Chinese waters this year.
"As expected, Quantum is commanding significant premiums -- its early success, with over 80 percent of her revenue currently booked for the inaugural China season, provided us with the necessary confidence to place her sister [ship], Ovation of the Seas, into the China market when she debuts in 2016," said Royal Caribbean CFO Jason Liberty on an April 20 earnings call.
China represents about 6 percent of Royal Caribbean's capacity.
Norwegian Cruise Line is the only operator sitting the party out in China, for now. "Well, what appears to be every ship in the world is going to China.. I say that only tongue-in-cheek but it is incredible to see our competitors devoting their newest largest, probably their best performing ships to the Chinese market," said Norwegian's Del Rio on a May 10 earnings call.
Norwegian Cruise Line recently hired an executive with experience launching cruise lines in China to explore its own entrance into the red-hot market.
It's hard to blame execs for betting big on the Chinese market. The number of cruise vacationers in China could top 8 million a year by 2020, accord to CLIA. In 2014, a mere 700,000 out of China's 110 million leisure travelers booked a cruise.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.
By Paula Pant
We want to save more money, but let's be honest: The hectic pace of life can make it hard to cut corners. If you're too busy to clip coupons, hunt for deals and make your own laundry detergent to save a few cents, how can you manage to save?
Here are five tips that can help you maximize your savings while also being frugal with your time.
1. Review your budget. A budget can be a great way to keep your spending in check, but it's only effective if it's aligned with your current needs and priorities.
Once a month, set aside a little time (just 15 minutes can help) to make sure your budget categories and real-life spending are where they should be. Look for areas you can trim and ask yourself if any new expenses have cropped up that need to be factored in.
If you notice you regularly overspend in a certain category, ask yourself if you can change your habits or if you can trim another budget category to free up some extra money. Re-evaluating and readjusting your budget on a regular basis helps you make sure your money is working for you.
Programs like Mint.com can help track your spending for you and alert you when you're getting close to exceeding your monthly spending goals.
Want to make things super easy? Try the "anti-budget" -- yank your savings from the top first, and force yourself to live on the rest.
2. Grocery shop smarter. A little preparation ahead of time can save you plenty at the grocery store - and help make cooking easier throughout the week. (And who doesn't want that?)
Sit down over the weekend and come up with a meal plan for the week ahead. Create a list with only the items you'll need for those meals (plus any staples you're running low on, like milk or bread). Keep your shopping trips quick and to the point; make a beeline for the items on your list and don't get distracted by flashy displays or sale signs. Get in, get what you need and then get out.
Want to make things even easier? Cook a large batch of something in a slow cooker on the weekends and then divide it up into meals for the week to come.
3. Cancel unused memberships and services. If it's been several months and you still haven't used that gym membership you keep swearing you're going to use, it's time to face reality. All it's doing is sucking money out of your bank account each month. There are plenty of other ways you can work out, like running, biking or finding free exercise videos on YouTube.
Look for other recurring expenses you're not utilizing, such as magazines you rarely read, pricey cable packages when you only watch a handful of shows and that land line you still have even though the only calls you ever receive on it are from solicitors.
These things are all drains on your budget. Cancel them, and voila! Extra money appears each month.
4. Think ahead. Establish several savings goals for short- and long-term expenses you can expect to face down the road. An emergency savings fund will give you a cushion to help you deal with things like home and car repairs, illness and accidents without blowing your regular budget.
Review your calendar for other expenses coming up in the year ahead: birthdays, weddings, vacations, holidays. Create a budget for these costs and start putting aside a little each month so you won't have to find the cash for them in one fell swoop. When it comes to travel, booking things like flights and hotels far in advance can help you net some great deals you won't find if you wait till the last minute.
5. Sign up for daily deals sites. Sites like Groupon, Amazon Local and Seize the Deal offer great daily bargains on everything from restaurants to entertainment to travel. Sign up for their mailing lists and set up a rule in your inbox so that any messages you receive from them go straight into a separate "deals" subfolder. This way, you can skim all your daily deals at once and they won't clog your regular inbox.
Paula Pant is the founder of Afford Anything, a website that helps you build wealth and maximize life. Afford Anything is an online movement against tired old financial advice that says you should skip lattes and chain yourself to a desk for 40 years. Paula Pant launched the site after she quit her 9-to-5 job, traveled to 32 countries and became a successful entrepreneur and real estate investor.
Monday -- An Apple a Day
Apple (AAPL) kicks off the new trading week with its annual WWDC expo. The five-day conference for developers will run through Friday, hosting 100 technical sessions with more than 1,000 Apple engineers on hand.
WWDC is geared toward iOS and OS X developers, but it's also full of developments for consumers. Apple is widely expected to introduce its new streaming music service, and there may be other newsworthy moments.
Tuesday -- Splitting Headache
Netflix (NFLX) investors will gather Tuesday afternoon for the leading streaming video service provider's annual shareholder meeting. The stock is rolling these days, so Netflix won't have activists or proxy battles to worry about this year.
This doesn't mean that this will be an uneventful meeting. A big topic will be the likelihood of a stock split announcement. Netflix is asking shareholders for the right to have enough share issuing flexibility to declare a stock split as substantial as a 30-for-1 move. Approval should pass. The only real mystery is how big the stock split will be.
Wednesday -- It's Time to Make the Doughnuts
One of the companies reporting quarterly results Wednesday will be Krispy Kreme (KKD). Analysts see the company behind the decadent doughnuts growing sales at a hearty 12 percent clip over the prior year's period, but it sees essentially flat profitability.
Wall Street's holding out for net income of 22 cents a share, just below the 23 cents a share it posted a year earlier. It's hard for investors to be optimistic on that front. It's been more than a year since Krispy Kreme has beaten analyst profit forecasts.
Thursday -- Don't Be Chicken
Bojangles' (BOJA) went public last month, and posts its first financial results Thursday as a public company. There are more than 600 Bojangles' locations across the country, and the fried chicken chain is on a roll after posting year-over-year growth in comparable restaurant sales for 19 straight quarters.
Consumer-facing companies also tend to see a spike in business when they go public. It's apparently a form of free advertising to get the financial press to talk about you. We'll see Thursday how it all plays out.
Friday -- Orange Is the New Three-peat
"Orange Is the New Black" is arguably Netflix's most popular show after "House of Cards." It returns Friday for a third season. Just as we've seen with nearly all of the original content on the leading premium streaming service, Netflix will make the entire season available on its debut date.
It remains to be seen if the "binge viewing" craze that Netflix inspired by providing instant gratification to serial junkies is the right call, but it's hard to argue with the performance of its stock since "House of Cards" and "Orange Is the New Black" premiered two years ago.
Motley Fool contributor Rick Munarriz owns shares of Netflix. The Motley Fool recommends and owns shares of Apple and Netflix. Try any of our Foolish newsletter services free for 30 days, and check out our free report for one great stock to buy for 2015 and beyond.
By Hiram Reisner
For most of us, feeling confident in our financial decisions calls for the help of a skilled and reliable adviser. A professional can help us create the path to our investment goals, whether that means generating immediate returns, providing college education for a pack of kids, securing a comfortable retirement, or all of the above.
Here's the challenge: There are at least 250,000 financial advisers in the United States, according to the Bureau of Labor Statistics, and not all are created equal. So how do you choose one? Read on.
1. Trawl for referrals. Start by getting recommendations from friends, family and reliable Internet sources. If you're getting referrals from friends, it makes sense to rely on those who are in a similar stage of life, with similar financial needs, Forbes suggests. Money Talks News founder Stacy Johnson notes that your accountant or lawyer may be another good source for referrals, depending on their familiarity with your circumstances.
Check out registries with professional associations like the National Association of Personal Financial Advisors or Garrett Planning Network to locate advisers in your area who have received training and agreed to the organizations' ethical standards, says Marketwatch.com.
Also, knowing some financial advisers may be distracted by sales quotas and time prospecting for new clients, you want to make sure that your financial adviser won't sign you up and then file you away, warns personalcapital.com.
Once you think you have some potential candidates, ask them these questions:
2. What are you going to do for me? Beware the salesman, Ameriprise Vice President Pierce Hardman tells MTN.
"I think one of the most important things is for the financial adviser to listen to the potential client," Hardman says. "All too frequently they talk themselves up a bit and blather on about what they can sell you, when in reality it is all about what you need -- not what they can sell you."
Shomari Hearn, a vice president at Palisades Hudson Financial Group, describes his philosophy with clients.
"I'm going to approach it from a holistic approach. I'm going to look at your overall situation," Hearn says. "Not only looking at your investment portfolio, but taxes, estate planning, retirement planning."
3. How are you paid? 'Fee-only' vs 'fee-based.' Your potential adviser should outline products that meet your needs. You should avoid advisers who have a financial incentive to focus on the offerings of particular firms or on specific investments. These are known as fee-based or commission-based advisers.
Stacy recommends a fee-only adviser to eliminate conflicts of interest. Fee-only advisers charge you a rate, usually based on the assets you put under management.
Here's a cautionary tale that illustrates what can go wrong with an adviser motivated by commissions: How to Find an Awful Financial Adviser.
In any case, make sure you are clear about what you are getting.
"No matter how they get paid, ask them, so you know," says Stacy.
4. Credentials, disciplinary history. If you want someone to manage your money, then look for a registered and educated investment adviser, according to Forbes.
The Financial Industry Regulatory Authority allows you to check out the advisers through Brokercheck, Ameriprise's Hardman says. FINRA oversees the people and firms that sell stocks, bonds, mutual funds and other securities.
You type in your current or prospective broker's name to see employment history, certifications and licenses - as well as regulatory actions, violations or complaints. You also can get information about your broker's firm, according to Brokercheck.
The U.S. Commodity Futures Trading Commission, which investigates suspected fraud, can clue you in on advisers who have had disciplinary actions. Disciplinary History is a searchable repository of the agency's active investigations and past violations. Look for CFTC SmartCheck.
Run this search to find out if your financial professional has a disciplinary history with the CFTC. The AARP also offers a questionnaire to help you weed out the bad players.
5. How will I know how I am doing? It's important to be clear about communication with your financial adviser.
You need to set a schedule, laying out how often you will meet to evaluate and review your portfolio and whether this will be done in person or remotely. The adviser should be ready to help you measure your progress over time with regular meetings and check-ins as well as access to your account online.
Proper communication is the key to a successful relationship that can last through many market cycles: It is important to work with an adviser who talks to you, not through you, according to Right Financial Advisor.
Bottom line: Always remember that your adviser should be working for you, not the other way around.
Do you have hints or tips for getting the most value from a financial adviser? Share them with other Money Talks News readers.
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By Teresa Mears
If you're paying an interest rate of more than 5 percent, now may be the time to refinance your home mortgage.
Although interest rates have risen slightly in the past few weeks, they are still at historic lows. The average rate for a 30-year, fixed-rate mortgage was 3.87 percent in the last week, and the average rate for a 15-year mortgage was 3.11 percent, according to the Freddie Mac weekly mortgage rate survey.
Deciding to refinance comes down to whether it will actually save you money, says Casey Fleming, author of "The Loan Guide: How to Get the Best Possible Mortgage" and a mortgage professional in the San Francisco Bay Area. "Everybody wants a rule of thumb, and rules of thumb don't work."
The biggest mistake people make is they keep regenerating their loan so it's never paid off.
"The biggest mistake people make is they keep regenerating their loan so it's never paid off," Fleming says.
Jason van den Brand, CEO and founder of Lenda, a Web-based platform that allows homeowners to complete a mortgage refinance completely online, cautions against being drawn in by deals that advertise "rates as low as," because you're unlikely to ever receive those rates. "If it sounds too good to be true, it probably is," van den Brand says. Lenda, which so far handles only refinance loans in California, Washington and Oregon, believes it can save customers money by automating the process. Van den Brand notes that, as a lender, his company is different from sites that provide mortgage quotes and then hand off leads to brokers.
"You end up looking at a lot of sites that are ultimately lead-generation sites," van den Brand says. "Be careful about putting your name and number online unless you're ready to receive 10 calls an hour. Telemarketing is not necessarily the solution to a better experience."
Here are 11 steps to help you navigate the refinance process:
Make sure your credit is in order. Your credit score is perhaps the largest factor that will determine what rate you get on your new loan. Before you apply for refinancing, get a copy of your credit reports and make sure there are no errors. "Even if you think everything is fine, you might have a serious credit issue," Fleming says.
Know your home's value. Your house will have to undergo an appraisal for the lender to know its worth. That number will help determine how much you can borrow. Check comparable sale prices (not just listing prices) in your neighborhood to see if your house is worth as much as you think it is.
Get all your documents together. If you haven't applied for a mortgage recently, you may be surprised at how much documentation and verification is involved. Whether you're scanning, faxing or uploading with your phone, you'll still need to provide proof of employment, income and assets. That could mean pay stubs, tax returns, bank statements and other documents, which places a premium on organization. "The more you can have your documents ready, the faster the process will go," van den Brand says.
Get quotes from at least three mortgage lenders or brokers. When you start shopping for a mortgage, make sure you get quotes from multiple lenders or brokers. You might start with your bank, but also consult an independent mortgage broker because one may have programs and deals the other doesn't. Online quotes give an idea of the range of rates available, but only quotes using your real credit score and the loan-to-value ratio of your deal are truly accurate. Personal referrals are a better way to find a quality mortgage broker. "You need to make sure the mortgage professional you're working with is on your side and is going to give you good advice," Fleming says.
Decide whether to pay more now in exchange for a lower rate. If you pay "points" on a mortgage -- a point is a fee equal to 1 percent of the loan amount -- you can get a lower rate. If you plan to keep the home for more than three years, it may be a good idea to pay the points, Fleming says, as long as you pay in cash upfront and don't add to your mortgage balance. "Not only is your mortgage payment lower, but more of your payment goes to principal," he says.
Make sure you are comparing apples and apples. The numbers you want to compare are interest rate, fees and points. Fees will vary by lender. Rates will, too, but rates also will vary based on whether you want to pay points. You also will have additional fees that should be the same no matter which lender you choose, including state or local taxes and title costs.
Know that 'no-cost' refinance deals don't exist. A refinancing that has no upfront closing costs from the lender has the costs built into the interest rate or adds them to the principal balance. If you plan to keep the loan for a long time, you might be better off paying fees.
Consider whether to lengthen or shorten your mortgage. When you refinance you mortgage, you start the 30-year clock ticking again. If you don't want to do that, consider a 10-year, 15-year or 20-year mortgage, if you qualify. "If you can afford it, a 15-year loan or a 10-year loan is a good idea," Fleming says. Reducing the length of your mortgage can be an appealing option for homeowners seeking to pay off their house before retirement.
Weigh carefully whether to take cash out. If you take cash out to, say, remodel your kitchen, you will be paying for that remodeling job for 30 years -- during which time you may need to remodel again. If you take cash out to pay your child's college tuition, you put your home at risk if you don't make the payments, which doesn't happen if you take out an education loan. There are times when taking out cash makes sense (you can't get that low of an interest rate elsewhere), but there are times it's not wise.
Know what it will cost to close. The fees charged by the bank aren't the only costs you'll need to pay to refinance. You'll also need to pay taxes, legal fees, title costs and perhaps put additional money in escrow for taxes and insurance. In some states, it pays to shop for closing agents because fees may vary significantly. In other states, there is less variation.
Scrutinize the documents before closing. Ask to see the closing documents at least 24 hours before you're expected to sign. That gives you time to ask questions and get any errors corrected.
If this sounds like you, then you deserve a big pat on the back -- you're well on the road to optimal financial health.
But what are the signs that you're really rocking your finances -- that you're not just an "A" student, but picking up extra-credit points along the way?
To help you see if you've entered overachiever territory, we've rounded up six benchmarks that show you're kicking your finances into high gear.
And even if you can't tick off everything on this list, consider them aspirational new goals to work toward, so you can take your money game to the next level.
Telltale Sign No. 1: You're a two-income household -- but you can live off just one.
For couples who bring in two salaries, it can be tough to resist the temptation of lifestyle inflation -- which makes it all the more impressive when you can comfortably live off one income and devote the other to long-term goals, like retirement or a college fund.
"It's a good objective, although it's fairly rare that people can do it," says Kevin O'Reilly, a certified financial planner and principal at Foothills Financial Planning. "It's not unusual to see people with two incomes who can't save anything."
So if you're part of a duo who's resisted trading up your lives with every raise or bonus, consider yourself masters of living well within your means.
"[Living on one income] is a great discipline -- and it provides a lot of financial help if one spouse loses a job down the road," says Jean Keener, a certified financial planner and principal of Keener Financial Planning.
If you're not quite there, comb through your expenses to see which category of costs is eating into your budget the most, and use that as a starting point for paring back.
"If a significant portion of [your budget] is discretionary, it may be easy to cut back travel, make fewer trips to a restaurant, or buy clothes less frequently," Keener says. "However, if [your budget] is going mostly to fixed spending, looking at larger items will lead to longer-term success. Making one big decision, like downsizing your house, [will be] generally easier than making small decisions about cups of coffee and Girl Scout cookies."
Telltale Sign No. 2: Your net worth exceeds your annual income -- and keeps growing.
Net worth is one of the most important barometers of financial health because it looks at your whole money life: your total assets (like the cash in your checking account, the current value of your home and your investments) minus your liabilities (such as student loans, credit card debt and what's left on your mortgage).
While having a positive net worth is great, having a net worth that exceeds what you earn is excellent because it shows you've been diligent about building wealth, living within your means and paying down debt simultaneously -- goals you don't have to be in the wealthiest 1 percent to achieve.
There's no hard and fast rule for how much your net worth should be. But for something aspirational, O'Reilly likes this equation from Thomas J. Stanley, author of "The Millionaire Next Door": 10 percent times your age times your income. So if, say, you're 40 and make $100,000, your target net worth would be $400,000.
"I have people who come in and say they're good savers, but they haven't touched their 401(k) allocation in 10 years. That's a bad sign."But don't let that number intimidate you -- what's really important is that you show an upward trend.
"Is your net worth growing? That's a good sign that debt is going down and savings are going up," Keener says. "Maybe you don't think you have enough yet, but you're headed in the right direction."
Just make sure that you're not relying on just one asset to get into the black. Otherwise, you may not be addressing all of your long-term savings goals.
For example, "[Your] half-million-dollar house is not necessarily something you're going to use to fund your retirement," says Cheryl Krueger, a certified financial planner and founder of Growing Fortunes Financial Partners. A healthy retirement plan covers a comprehensive mix of assets.
Telltale Sign No. 3: You can name what's in your investment portfolio.
If you've been steadily stowing away 10 percent of your income into your 401(k), congratulations! Now, quick: What's your asset allocation?
If you can answer that without reaching for old brokerage statements, you're ahead of the game. "I have people who come in and say they're good savers, but they haven't touched their 401(k) allocation in 10 years," O'Reilly says. "That's a bad sign."
Unfortunately, investing with blinders on isn't altogether uncommon: One 2014 MoneyRates.com survey found that one in five people don't know what goals they're investing for -- and about 12 percent don't know which primary asset class their money is in.
So how can you go from clueless to someone who can answer the asset allocation question in five seconds flat?
For starters, keep tabs on where your accounts are housed, and don't look at them as separate entities. Your portfolio as a whole should be reviewed to see if it's meeting your investment objectives, whether that's growth (taking on more risk) or preservation (taking on less risk to protect your principal).
"In a couple, typically one spouse knows more about the finances than the other, so they defer to the other person [on knowing where the money is]," Krueger says. "Or with single people, you see a lot who've changed jobs and don't [even] know where their 401(k) is. It helps to be able to look at things all together."
Once you've nailed down your total investment picture, figure out the frequency with which you'll check on those investments -- keeping in mind that you may have to tune out market noise. "You don't have to look at the Dow every day, but you should be checking your portfolio every quarter or so," suggests Keener.
Telltale Sign No. 4: You neither owe nor get a refund at tax time.
If you got to the bottom of form 1040 this year and netted close to zero, then you (or your accountant) did an excellent job of managing your tax liability.
"Penalties are a waste of money, and an unexpected tax bill can cause someone to invade their emergency fund or [resort to] high-interest credit cards to help pay the bill," Keener says. "It's also beneficial not to get a huge refund because you could be earning interest on that money over the course of the year, rather than giving an interest-free loan to the IRS."
If you consistently owe or get a refund of more than $1,000, consider adjusting your withholding, so more or fewer taxes are taken out of your paycheck during the year.
Using your most recent W2, fill out the IRS' withholding calculator to estimate what your number should be -- and remember to take note of any life changes that could affect your tax situation, such as getting married, having a child or changing jobs midway through the year.
Telltale Sign No. 5: Less than a third of your income goes toward debt.
Your debt-to-income ratio -- minimum monthly debt and mortgage payments divided by your gross monthly income -- helps tell lenders how well you're managing debt.
Although every lender varies, the oft-quoted benchmark for an acceptable debt ratio is 36 percent. Krueger, however, believes that percentage is still fairly high.
"I would say 10 percent or less of your gross income going to debt is a good indicator [of strong financial health] -- and, of course, you want it eventually to go down to zero," she says.
"Before you trade up for the latest car model, consider whether you really need that rich Corinthian leather -- or whether the money could be better served for retirement."Krueger believes that aiming for less than the lending benchmark is prudent, because "between taxes and saving for retirement, having debt [take up] 36 percent of your income doesn't leave much money for [other] savings."
If you need to chip away at debt to improve your debt-to-income ratio, consider the "avalanche method," which involves prioritizing paying down your highest-interest debts first, while still meeting the minimum payments on others.
Then, once you're done paying off that first debt, you can apply that payment to your next highest-interest loan or credit card.
Telltale Sign No. 6: You're done with car payments.
Being free and clear of auto financing is a double-whammy positive indicator. Not only have you eliminated debt -- and likely improved your debt-to-income ratio -- but "it means you're driving your cars longer, and getting more value out of them," O'Reilly says.
But living car-debt-free is something few Americans seem to be able to accomplish: At the end of 2014, the country's automotive loan balances reached a record $886 billion, according to Experian Automotive.
Of course, this doesn't mean you should sink a hefty lump sum into your car loan just to be rid of it.
"[Not having a car payment] is a positive indicator [of financial health], but with interest rates so low right now, having a car loan isn't necessarily a bad thing," Keener says. You could, for instance, consider using that money instead to beef up an emergency fund, pay off higher-interest debt or invest in something with better returns.
In other words, what having no car payment really signals is that you're getting as much bang for your auto buck by driving your car until it dies -- which can yield a significant savings, considering the average auto loan now surpasses $28,000.
So before you trade up for the latest model, consider whether you really need that rich Corinthian leather, or whether the money could be better served for retirement -- or a new-car savings account, so you can pay cash for your next ride.
"Financially, you're much better off if you continue driving the car as long as possible and view it as a depreciating asset that's just transportation from point A to point B," Keener says. "As long as it's reliable and safe, it doesn't need to be replaced."
By Louis DeNicola
It's easier than ever to find good deals on hotel rooms online, but the actual price at the check-out counter is often higher due to fees and charges that are tacked onto the bill. In 2014, hotels made $2.25 billion in revenue from extra fees and add-ons, according to a study by a researcher at New York University. Travelers can be nickel-and-dimed for just about anything, and the most frustrating part is that many of the fees aren't clearly disclosed ahead of time. Cheapism.com found 10 such fees and offers tips on how to avoid them.
Minibar. It's not a secret that items in the hotel minibar have huge markups. Avoiding minibar charges should be easy: just don't eat or drink anything. But it's not always that simple. Some hotel minibars have sensors that automatically charge guests for items that are simply picked up or moved, even if they are put back. The front desk should remove these charges, but you have to notice them on your bill and ask. Some hotels may charge guests to store their own items in the minibar, up to $50 a night. Read the fine print on the refrigerator to avoid this aggravating fee.
Parking. Often buried in the booking agreement, parking can cost an extra $20 to $30 a day, even for self-parking. Avoid this fee by parking in a nearby lot or on the street. Even if you don't have a car at the hotel, give the final bill a quick check. Some hotels automatically charge the parking fee, and you'll have to ask to remove it if you didn't use the parking facilities.
Wi-Fi. With free Wi-Fi available at just about every McDonald's and Starbucks, you'd think hotels would offer the same. But an extra charge for using in-room Wi-Fi is common at business and luxury hotels, and the fee can be $20 a day or more. The easiest way to avoid this fee is to stay at a hotel that offers free Wi-Fi, or to limit Wi-Fi use to the lobby or business center that offers a free connection.
Resort Fees. Hotels in popular tourist destinations such as Las Vegas often tack a resort fee onto the bill. The fee covers the use of the pool, lounge chairs, beach umbrellas, and fitness and business centers, and it's mandatory even if you don't use those amenities. The advertised price rarely includes the resort fee and the extra charge can catch guests off guard. Some travel sites and hotel chains list the fee before you book, but that's not always the case. Annoyingly, the fee can be charged even if you book a free room using points in the hotel's loyalty program. There's no way to avoid this charge aside from reading the fine print ahead of time and opting for a hotel that doesn't charge a resort fee.
Early Check-In and Late Check-Out. Some hotels charge guests for arriving early or leaving late. Asking politely at the hotel desk to skip those fees can pay off. Alternatively, ask to store your bags at the hotel desk before checking in or after checking out.
Third-Party Reservation Fee. This is the easiest fee to avoid if you catch it in time. Some online travel sites, such as Priceline (PCLN) and Orbitz (OWW), charge a fee for booking select hotels. Avoid this fee by booking directly with the hotel.
In-Room Safe. The extra charge for an in-room safe is usually small, just a few dollars a day, but some hotels don't disclose the fee up front. If you didn't use the safe, ask the front desk to remove the charge. Alternatively, call ahead when booking and ask the hotel to remove the fee if you don't plan to use the safe or ask for a room that doesn't have one.
Fitness Center. A charge for use of the hotel fitness center may be added to your bill automatically even if you didn't use the facilities. Ask the hotel to remove the fee when you check out.
Automatic Gratuity. You may have planned to tip housekeeping anyway, but check to see if a gratuity has been added to your bill so you don't tip twice. The same goes for services you received during your stay, such as a massage at the spa.
Telephone Surcharge. Using the phone, even for local calls, can result in extra fees at many hotels. This is easy enough to avoid by using your own phone, but what if you're traveling overseas? Sign up for a Skype subscription and for $2.99 a month you can make unlimited calls to U.S. and Canadian landlines and mobile phones. Or check with your cellphone provider about local service plans to avoid big fees on international calls.
Get Status. One way to avoid extra fees is to have elite status in a hotel chain's loyalty program. Depending on the chain, the higher status can include extras like free Wi-Fi, breakfast, bottled water in your room, early check-in or late check-out, health club access, and upgraded rooms. Some credit cards automatically give you elite status just for being a cardholder. The cards may have an annual fee, but the perks can more than offset the cost in just a single trip.
Growth is expected to accelerate significantly in the third quarter, but "sluggish" conditions in the first three months of the year will persist into the second quarter and drag down average growth for the year, a survey by the National Association for Business Economists said Monday.
The survey of 47 economists from companies, trade associations and academia was conducted from May 8 to May 20.
A growing number of economists in the survey believe that the Federal Reserve will begin raising interest rates in the third quarter. Many had expected a second-quarter increase until the year started off so slowly.
The labor market will improve at a slower rate also, according to the survey, but job growth will remain "robust." Economists now believe payrolls will grow by 217,000 a month in 2015, down from an earlier forecast of 251,000. Last year the economy added 260,000 jobs a month on average.
A stronger U.S. dollar is hampering growth by making U.S. goods more expensive overseas, and slower growth in China is also taking a toll on the U.S. economy, according to the survey.
The group's forecast for U.S. economic growth in 2015 fell to 2.4 percent, from 3.1 percent in March.
The Federal Reserve also has revised its expectations for growth after a difficult winter. It expects economic growth for the year to average between 2.3 percent and 2.7 percent, down from a range of 2.6 percent to 3 percent it projected in December.
Still, the survey pointed to a number of positive economic indicators despite what it described as a "disappointing" start to 2015. The NABE panel expects consumer spending, residential investment and government expenditures to increase at a faster pace in both 2015 and 2016 compared with last year.
SAN FRANCISCO -- Apple announced its new music streaming service Monday, dubbed Apple Music, entering a hotly competitive market but offering a product that comes with tremendous strengths.
Calling it a "revolutionary music service," legendary music industry figure Jimmy Iovine took the stage at the company's annual conference for developers to unveil what had been widely expected ahead of the event. Apple Music includes a service to connect artists and fans and what the company described as a global radio station called Beats 1.
While late to the streaming music business, Apple has strong advantages: deep relationships with music companies; a global brand; and hundreds of millions of customers -- and their credit cards -- through iTunes.
Apple Music's $9.99 a month price takes effect after a three-month free subscription period. The company is also offering what it calls a "family plan" for $14.99 a month for up to six family members.
Earlier in the event, Apple Chief Executive Officer Tim Cook announced that so-called "native" apps will be introduced in the next version of the operating system for its Watch that should make apps for its latest gadget speedier and help untether it from the iPhone.
The company also unveiled new details about its Apple Pay service, saying it was already supported by more than 2,500 banks and will surpass 1 million locations accepting it next month. In addition, the company said it would roll out the service to the United Kingdom next month.
In a related move, Apple said it would rename Passbook, its app for credit and debit cards and boarding passes, to Wallet.
Apple (AAPL) shares were down 0.5 percent at $128.05 in afternoon trading.
The company also unveiled the next version of its operating system for Macs, El Capitan, continuing the company's theme of naming key updates to the software after California landmarks. The software will be available in the fall.
Like other Apple products, the Watch's commercial success will likely hinge on a compelling collection of apps. But early apps for the timepiece have been tethered to the iPhone, placing some limits on what developers could do.The expanded software kit should lead to better and faster watch apps, said Bob O'Donnell, an analyst at TECHnalysis Research, in an interview before the event.
But it was the music service that was the highlight of the event. The company behind the iPod and iTunes has long been a leader in digital music, but it has lost ground in recent years as subscription services such as Spotify have caught on with consumers.
Sears Holdings reported a smaller first-quarter loss as it cut advertising and other costs, but sales continued to tumble, underscoring the need for a big cash injection that the struggling retailer said would materialize next month.
The company expects its plan to spin off 235 Sears and Kmart stores into a real estate investment trust to be approved by the Securities and Exchange Commission this week, paving the way for a rights offering to sell shares in the REIT to existing shareholders Friday.
The retailer, which has lost $7 billion over the past four years, expects to receive about $2.6 billion in proceeds from the sale early in July.
That deal, if accomplished, should buy Sears time to pursue a revival strategy that involves a loyalty program and shrinking its presence to its best-performing stores.
Still, that strategy has yet to produce profitable results for the retailer, which reported its 12th straight quarterly loss.
For the quarter ended May 2, net loss attributable to shareholders was $303 million, or $2.85 a share, following a loss of $402 million, or $3.79 a share, a year earlier.
Overall revenue slumped 25 percent to $5.88 billion, reflecting the sale of most of its stake in its Canadian operations, the spinoff of the Lands' End (LE) clothing chain and the closure of stores.
Still, shares of Sears (SHLD) jumped 4 percent in premarket trading.
It reported a sharp drop of 10.9 percent at comparable stores open at least year, a key measure of retail performance. Sales at Kmart fell 7 percent, while Sears' sales slid 14.5 percent, hit by falls in key categories like appliances, apparel and auto centers.
Sears said some of the decline was expected as it shrinks operations. Apparel was also hurt by supply disruptions due to a slowdown at ports in the West Coast, the company said.
Sears said it was in talks with lenders to extend a revolving credit facility, due to expire in April 2016, to 2020. It has already reached agreement with three lenders representing $1.175 billion in commitments, it said. The size of the facility would likely decrease to about $2 billion from $3.275 billion.
Sears was seeking a smaller lending framework because it has fewer stores, a larger online presence, and less need for financing due to decreased inventory levels, Chief Financial Officer Rob Schriesheim said on a pre-recorded conference call.