18 Ways to Save $100 This Week

June 9, 2015, 10:00 pm

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Filed under: Budgeting, How to Save Money, Coupons, Cell Phones, Home & Garden

By Allison Martin

Does this sound familiar? Every month you set a goal to save a small portion of your income, only to end up failing miserably.

It would be nice if we could all save money in the blink of an eye. Unfortunately, it's a task that requires effort, discipline and -- most importantly -- some sort of income.

If you're in a bind or just want to stash a little extra cash, here are 18 ideas about how to make your savings grow:

1. Keep the change. Retain the change from each of your transactions for an entire week and store it in a Mason jar, Ziploc bag or piggy bank. At the end of the week, count the coins to see how you did. Depending on how much you spend, you may have reached your goal by following this one simple tactic.

2. Reduce transportation costs. Download the GasBuddy or GasPriceWatch.com application onto your smartphone to locate the best deals in the local area on gasoline. You can also try carpooling with others from your job, or using public transportation for a week.

3. Eliminate dining out for one week. This suggestion is made over and over again, but it works. Brew your own coffee to start the day and use the leftovers from the prior night's meal for lunch. And if you're tempted to pick up an item from the snack shop, come prepared with your own treats and drinks in tow.

Also, kindly inform co-workers that you won't be accepting invitations to dine out for lunch during the week.

4. Skip entertainment. Don't plan on going to a play or the movies. An alternative is to find free entertainment at local community events. There's also the library, which is jam-packed with books and DVDs that you can borrow free.

5. Find free workouts. Do you pay weekly for fitness classes? Try finding fitness programs on television or the Internet, or at the library. I prefer SparkPeople when I need to change things up because it's a fitness hub with a variety of workout plans, many of which are customizable. It also offers meal plans for those looking to get fit.

If you're a member of a gym, consider canceling the membership and embracing the great outdoors or group workouts. Check the local recreation or community center for free exercise classes that you may be able to attend.

6. Only carry cash. Can you spare $100 each week without turning your finances upside down? Force yourself to save the funds by setting aside a cash-only expenditure budget for the week. Once the cash is gone, your spending is done.

Can't wrap your head around that? Break the task into small increments of $20 a day. Once five days have passed, you will have met your goal. High five!

7. Sell some stuff. Head to a local consignment shop or a retailer, such as a Plato's Closet, that will pay you on the spot for gently used goods. Can't find one in your area? Try hosting a garage sale, or set up shop at the local flea market.

8. Get to work. Pick up a temporary side gig to quickly accumulate funds. Or, let your creative juices flow and sell your products and services to others.

9. Clip coupons. No newspapers lying around? No problem. Head on over to a website like The Krazy Coupon Lady or Coupon Mom, where you will find printable coupons and corresponding instructions for putting the coupons to use. In some cases, a coupon can actually qualify you for cash back from the store.

10. Call your car insurance company. Inquire about any discounts that may be available. Also, raising the deductibles on your auto and homeowners insurance will drop your premiums. Just be sure you have money in savings to cover your increased out-of-pocket expense in case you have to file a claim.

11. Decrease your energy consumption. Reach out to your utility company to schedule a free energy audit of your home. Also, unplug any chargers or appliances that are not in use.

Set the thermostat a little higher to cut your air conditioning bill. Lower the temperature in winter and layer up. Also, consider hanging your clothes out on the clothesline to give the dryer a break.

12. Don't use your credit card. A high interest rate can greatly increase the cost of things you buy with your credit card if you don't pay off the balance in full each month. Hide the magic plastic and don't increase the amount you owe on the card.

13. Disconnect the cable. Freaked out by this suggestion? At least shave off the extras and try online television instead. Also, inquire about any discounts on bundles for which you may be eligible.

14. Skip the spa. It's always great to pamper yourself, but it can also add up quickly. My last spa visit, which consisted of a manicure, pedicure and massage, was well over $100.

15. Iron your own clothes. You can iron shirts and blouses, can't you? No need to pay a professional unless an article of clothing truly requires professional handling by a dry cleaner.

16. Call your cellphone provider. If the provider isn't willing to reduce your monthly bill, switch providers or get a prepaid plan. Also, check out the free or steeply reduced price options, such as Republic Wireless. They do the job just as well as the big boys. I know from experience.

17. Track your expenses. The simple act of paying attention to all of your daily expenses may be motivation enough to spend less. Join a free expense-tracking service like PowerWallet, then check in daily to see where your money's going. PowerWallet will automatically send you money-saving coupons based on what you're buying.

18. Pick up some free cash. Does your employer match retirement contributions? Add another $100 to your 401(k) and get a free $100 from the boss.

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10 Best U.S. Cities for Budget-Friendly Summer Travel

June 9, 2015, 10:00 pm

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Filed under: Family Money, Personal Finance, Travel, Vacation Planning

By Laurie Kulikowski

NEW YORK -- Summer is here and that means Americans will be taking some much-needed vacation time over the next few months.

But not everyone wants to spend thousands of dollars on a vacation. Some are choosing staycations, while others look for affordable trips.

In order to help vacationers find the most appealing and budget-friendly destinations, WalletHub ranked the 80 most populated metropolitan areas on five main areas: costs and hassles of getting there; local costs; attractions; weather; and parks and recreation. Within those five areas, WalletHub then drilled down into 13 key metrics to measure each area by, such as: the cost and duration of the cheapest flight; the cost of a 3-star hotel in the area; the diversity of attractions, among others.

Check out which U.S. cities made WalletHub's top 10 list. TheStreet also provided additional wallet-friendly activities for each city.

Sources used by WalletHub: Data used to create these rankings were obtained from the U.S. Census Bureau, the Council for Community and Economic Research, Kayak.com, TripAdvisor, Travbuddy.com and WalletHub Research.

 

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What Young Americans Should Look For In a Heath Care Plan

June 9, 2015, 10:00 pm

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Filed under: Health Care, Personal Finance, Health Insurance, How to Save Money

By Brian O'Connell

NEW YORK -- For Americans 30 and under choosing a health care plan -- many for the first time -- there is no shortage of moving parts to consider.

For keeping costs low for younger consumers who habitually make the lowest incomes, accepting a high-deductible plan in exchange for lower monthly premiums (or payments) might be the way to go. After all, the 30-and-under demographic isn't only the youngest section of the workforce, it's also the healthiest, and accepting some elevated risk of using high health care plan deductibles can make good sense.

To find the best option, Harley Gordon, co-founder of Agent Review, a Bellevue, Washington, online insurance agent reviewer, advises the younger generation to focus on the "three H's":

1. Measure your current health. Do you get sick a lot? "If, for example, you're a teacher surrounded by germs or have a high-stress job that impacts your health, you might consider a lower-deductible plan so you're not paying for every visit to the doctor or trip to the pharmacy," Gordon says.
2. Evaluate your everyday habits. Do you visit the doctor often, whether you're sick or not? "If not, a high-deductible plan could work for you, because you only pay when you actually seek out medical treatment," he adds.
3. Weigh whether you're high-risk. Do you live an active lifestyle? Do you snowboard? Do CrossFit? "If chances are high you'll break a bone or otherwise get injured, you might be paying more for hospital bills out of pocket with a high-deductible plan -- consider a low-deductible option," Gordon says.

For a lot of consumers under 30, a catastrophic plan may be sufficient, but they're also advised to save in an health savings account to pay any deductible, says Adam Beck, assistant professor of health insurance at The American College in Bryn Mawr, Pa. "The same is true for a bronze plan, which for many young people will make the most sense," he adds. Beck says younger people should visit the national (and state) health insurance marketplace to explore all their options.

But there is a caveat with this approach. "This could yield positive results, but a lot of young, single people can get into a bit of a trap," he says. "They may not make much money -- say $35,000 a year in an entry-level job -- but because they are single with no dependents, they still earn well above the poverty line and won't qualify for much of a subsidy, if any."

If the young man or woman is under age 26, the ACA has a way to help: They can stay on their parents' plan, Beck notes.

My advice to a young person is to take the highest deductible with the best network they can find.

It's also vital for young Americans to understand they might experience a higher premium increase if they don't update their subsidy annually. "Without updating their subsidy, an individual is subjected to picking up 100 percent of the premium increase personally, as opposed to a portion consistent with their previous subsidy," notes John O'Donnell, president of Insurance Consultants of Central Florida.

Additionally, healthy younger people should learn about the limited-network plans that are increasingly available for lower costs. "Individuals under age 30 are also eligible for 'catastrophic' plans, which is its own tier of plans that are less expensive than most bronze-level plans [on the health exchanges] and can be a very affordable option," O'Donnell adds.

If you do opt for a high-deductible plan, you may have more leverage -- and more leniency, financially -- than you might think.

"My advice to a young person is to take the highest deductible with the best network they can find," Gordon says. "Most Obamacare plans have restricted networks, so they should make sure good hospitals and doctors are in the network. If there is a large bill and the deductible is reached, almost every hospital and doctor will negotiate a payment plan over a period of years."

"Just because there is a bill for $6,000, it doesn't mean it must be paid right away," Gordon says.

 

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We Can't Stop Borrowing: Consumer Debt Soars $201 Billion

June 9, 2015, 10:00 pm

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Filed under: Student Loans, Personal Finance, Credit Cards, Auto Loans, Debt Assistance

After the financial crisis, we were supposed to have learned our lesson. The press started reporting a great deleveraging, as suddenly sober American consumers began to save more and spend less. However, the great deleveraging was always mythical, as BlackRock pointed out in this blog post.

Mortgage debt did reduce, but it was largely the result of banks writing off bad debt, rather than consumers paying down old balances. And by historic standards, total consumer debt remains high. As a percentage of disposable income, it remains above 100 percent. Before 2002, household debt had never gone above 100 percent.

Last week the Federal Reserve of New York released updated household debt data, showing that total consumer debt has now reached $11.85 trillion, an increase of $201 billion. The biggest growth came from:

• Auto loans, up $93 billion
• Student loans, up $78 billion
• Credit cards, up $25 billion

The increase across all classes of debt should concern us. And the mythical deleveraging is now over, as Americans borrow to finance homes cars, schools and trips to restaurants.

Auto Loans

It is true that automobile purchases dramatically reduced after the 2008 crisis. As a result, there was a lot of pent-up demand that has led to the recent increase in auto purchases and financing. However, as Experian Automotive noted earlier this month, there's a more worrying trend. The average term of auto loans is increasing rapidly. Auto loans with terms of 73 to 84 months are now 29.5 percent of all vehicles financed. That's up from just 9 percent five years ago.

When people walk onto an auto dealership, they generally worry only about the monthly payment. By offering much longer terms, the auto dealers are able to offer much bigger loans while keeping the monthly payment relatively flat. However, automobiles are depreciating assets. When you finance an automobile over a longer term, you end up with less principal reduction in the earlier years. That means borrowers will have to wait longer before they can purchase their next automobile, otherwise many borrowers would be facing a negative equity situation.

Even more concerning is the longer term on used automobiles. The average term of a used car is now 62 months, which means the borrowers will have to keep those cars for years. In a worst case scenario, the car starts to break down while there is still significant negative equity.

Student Loans

As I have written earlier, student loan debt remains a ticking time bomb. In the most recent release from the Fed, we see that 90-plus delinquency remains above 11 percent. And total student loan debt has now reached $1.2 trillion, second only to mortgages.

It usually takes a while for true delinquency numbers to catch up with portfolio growth. Over half of the student loan debt outstanding is still not yet in repayment. As more students graduate with student loan debt, we can expect to see the delinquencies and defaults increase.

Credit Cards

Mortgages finance the purchase of a home, which can be an appreciating asset. Student loans finance a college education, which can help enhance lifetime earning potential. Auto loans finance a depreciating asset, but it is a necessity in most of America for work and education. Credit cards, however, are an extremely high cost ways of borrowing money for everyday expenses. They are also used to finance luxuries that we can't afford. Credit cards regularly charge an interest rate higher than 15 percent.

It isn't a surprise to see credit card businesses expanding aggressively. It is now possible to earn unlimited 2 percent cash back. You can easily obtain 40,000 bonus miles if you sign up for a frequent flier credit card. And if you have a less than perfect credit score, credit card companies are increasingly accepting you. The risk tolerance of credit card companies is expanding, as they look to continue generating strong returns.

In the face of this marketing onslaught, Americans of post-2008 are starting to resemble the Americans of before 2008. We continue to open millions of new credit cards every month. And now balances are starting to grow as we use these cards. I expect that credit card balances will continue to increase.

Dealing With Debt

As the recovery continues, unemployment has been reducing. However, wage growth has been minimal. As credit becomes increasingly available, it is important to keep your fixed costs low, avoid the temptation of credit card debt and find the lowest interest rate for the debt that you have.

The two biggest components of most people's fixed costs are their mortgage and auto payments. I have two simple rules: try to keep your mortgage payment well below 30 percent of your monthly net income. Ideally, it shouldn't be more than 25 percent of your take-home pay. And try to keep the term of your auto loan below 5 years -- and ideally no more than 3 years.

For an automobile, you should ideally be saving for the purchase of a car and pay cash. If you don't have the cash for a car, you can certainly consider financing. Consider a credit union like PenFed, where interest rates are as low as 0.99 percent. Obtain your financing before you walk onto the dealer's lot. By financing your automobile for only three years, you will end up buying much less expensive cars. And that is the point. If you have a family income of $60,000 you shouldn't have $40,000 automobiles sitting in the driveway.

Avoid credit cards for everyday spending. You should only use a credit card if you have the discipline to pay the statement balance in full, every month. If you struggle with budgeting, consider using an app like Level Money. It is one of the best budgeting apps I have found.

And if you have credit card debt, you should look to pay off the debt as quickly as possible. The most important part to paying off credit card debt is setting a written budget and aggressively attacking the debt. You can help speed up debt repayment by refinancing to a lower interest rate. A number of marketplace lenders have been established to offer personal loans. Consider shopping for a lower interest rate using a website like MagnifyMoney (which is my website) or CreditKarma. With marketplace lenders, you can reduce the interest rate on your debt by 30 percent or more.

Yet We Continue To Borrow

There have never been so many tools available to save money. You can use websites like MagnifyMoney to find the lowest interest rates on debt. You can refinance your debt with start-ups like Lending Club, at a much lower interest rate. You can manage your spending with budgeting apps like Level Money. Yet we continue to borrow. All of these tools are great. But what we need is a commitment to stop living beyond our means. It looks like it is going to take more than the 2008 crisis to get us to change.

 

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Dos and Don'ts for Your Final Working Year Before Retiring

June 9, 2015, 10:00 pm

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Filed under: Personal Finance, Career Change, Retirement Living, Retirement Plans, Financial Education

Some 4 million baby boomers are expected to retire in the next year. If you're one of them, you need to make sure you're on solid ground before exiting the workforce. Otherwise, you could find yourself without a job and without enough monthly income to cover your expenses. Retiring has the potential to affect everything from your social life to your insurance coverage, so pre-retirees should take some time to evaluate both their current situation and future goals before clocking out for the final time.

Here's what financial experts say you should do (and not do) during the year before you retire.

Do: Review Your Expected Budget and Cash Flow

The first thing pre-retirees should do is estimate what their expenses will be in retirement.

"[My] single biggest tip is to put together an itemized monthly budget," says Michael Milarski, partner with Signature Financial Planning in Pittsburgh.

Pre-retirees often make the mistake of focusing solely on the bottom line of their 401(k) or IRA statement, he says. But what may be more important than the total balance is the monthly cash flow you can expect to pull from those accounts. Milarski recommends adding up all your monthly expenses -- with travel plus major and future expenses included -- and having a financial adviser run "Monte Carlo simulations" to determine how long you can sustain that budget before your money runs out.

"Pre-retirees also need to take a hard look at where their sources of income will be coming from," says Steven Elwell, vice president of Schroeder, Braxton & Vogt in Amherst, New York. In addition to Social Security and pensions, those heading toward retirement need to decide when and how to start pulling money from 401(k)s, IRAs and other retirement accounts.

Larry Rosenthal, president of Rosenthal Wealth Management Group in Manassas, Virginia, says poor management of private retirement accounts can be a costly mistake. "I see [seniors] sometimes withdrawing too much money and paying excessive taxes to stick [money] in a checking account," he says. While those with Roth IRAs can make tax-free withdrawals, money from a traditional IRA is taxable and withdrawals before age 59½ often trigger a 10 percent early withdrawal penalty. Beyond having to pay taxes on money they don't plan to use immediately, retirees could find that unneeded withdrawals bump them into a higher tax bracket.

Don't: Forget About Health Insurance and Life Insurance

Reviewing insurance policies is another must-do for pre-retirees. Medicare doesn't start until age 65, which means early retirees could find themselves without coverage and without access to their employer's health plan.

"Create a plan to avoid a lapse in medical coverage," Milarski says. "[Early retirees] need some sort of coverage as a bridge from retirement to Medicare."

As for life insurance, Rosenthal says it's not so much a question of finding new coverage as it is seeing whether you can reduce your monthly expenses. "Ask what happens with your whole life insurance [policy] if you stop payments," he advises. Depending on the policy, some companies may allow premiums be taken from the cash value, which can free up much-needed money in a retiree's monthly budget.

Do: Refinance Now Rather Than Later

If you think refinancing your home mortgage is a wise financial move, Rosenthal says you should pursue it while you are still are earning income. "Refinancing becomes harder after retirement," he says. Creditors may be hesitant to provide loans to those who don't have any earned income and are living on retirement funds.

Along the same lines, consider whether you want to make any major purchases in the near future, such as a car or RV. In most cases it'll be easier to buy these items now rather than obtain financing after you've left the workforce.

Don't: File for Social Security Too Early

One of the biggest decisions you need to make as you approach retirement is when to take Social Security. "I see far too many seniors starting Society Security too early," Elwell says.

While you can sign up for Social Security any time after age 62, your monthly benefits will increase for each month you wait up until age 70. "Delaying your Social Security can be one of the smartest financial strategies for healthy people," he says. "Proper planning for a married couple could yield tens of thousands, if not hundreds of thousands, of dollars more over a normal lifetime."

Smart use of funds from your retirement accounts can be one way to comfortably postpone the start of Social Security benefits. "Work on initiating a plan to start monthly withdrawals from retirement funds," Milarski says. He recommends consulting with a financial professional to determine the right amount to withdraw, noting an annual withdrawal of no more than 5 percent of the fund balance is usually ideal.

Do: Find a Social Outlet in Advance

Before you leave the workforce, decide whether you need to find a new social outlet. Rosenthal says, "Ask the question: Am I getting most of my social interaction in the workplace or outside the workplace?

If the workplace is your main source of friendship, you may have a rocky transition to retirement, where long hours at home can lead to boredom or marital tension.

"I recommend pre-retirees think about the things they enjoy doing and find their passion once they retire," Elwell says. "It's one thing to be financially prepared for retirement but another to be mentally prepared."

Elwell says his happiest clients are the ones who have found meaningful activities to fill their time. To find your happy place, consider whether you might want to travel, pick up a new hobby, work part time or volunteer for a favorite charity after you finally say goodbye to the daily grind.

 

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Airline Group's Idea Does Little to Help Fee-Burdened Flyers

June 10, 2015, 4:11 am

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Filed under: Company News, Travel Industry, Consumer Issues, Vacation Planning

By SCOTT MAYEROWITZ

NEW YORK -- Millions of fliers might soon want to buy new carry-on suitcases.

Global airlines announced Tuesday a new guideline that recommends shrinking carry-on bags, in an effort to free up space in packed overhead bins.

The guideline, which isn't binding, means that many existing bags currently in compliance with airline rules wouldn't be given preferential treatment in the boarding process. While details of how the guideline will be implemented are murky, and could vary from airline to airline, it raises the possibility that many fliers would be forced to check their favorite carry-on bag.

Fliers might ultimately need to buy smaller suitcases or pay a fee to check their bags, typically $25 each way.

Once again, the airlines find a way to make their problem the passenger's problem -- and an expensive problem at that.

The recommendation by the International Air Transport Association suggests an "optimal" carry-on size at 21.5 inches tall by 13.5 inches wide by 7.5 inches deep. That's smaller than the current maximum size allowed by many airlines. For instance, American Airlines (AAL), Delta Air Lines (DAL) and United Airlines (UAL) all currently allow bags up to 22 inches by 14 inches by 9 inches -- although gate agents don't always enforce those more-generous measurements.

"Once again, the airlines find a way to make their problem the passenger's problem -- and an expensive problem at that," said travel industry consultant Henry Harteveldt. The lack of overhead space is due to airlines cramming too many seats on planes and charging passengers to check their suitcases, he said.

Airlines around the world have varying standards -- different enough that a carry-on bag that is acceptable to one airline isn't allowed in the cabin of another. The airline trade group says the new guideline won't necessarily replace each airline's rules on bag size, but gives them a uniform measurement that "will help iron out inconsistencies."

Charlie Leocha, a consumer advocate and co-founder of Travelers United, said if enough airlines adopt these guidelines it will be great for travelers to at least know what size bag is acceptable on multiple airlines. However, Leocha measured his own carry-on bag Tuesday-- one that he has traveled with for more than a decade and never struggled to fit into an overhead bin -- to find out that it doesn't comply with the new suggested size.

"Are the airlines are cahoots with the baggage manufactures? It just seems crazy," he said.

Many bags already marketed as carry-on compliant actually aren't.

For instance, for $56.99 Walmart (WMT) sells the Rockland Luggage Sonic 20" ABS Spinner Carry On. The bag is the right height and width but is 1 inch too deep for current U.S. airline rules. Macy's (M) sells a Samsonite Silhouette Sphere bag for $460 that is marketed as meeting "carry-on requirements for most major airlines" but the bag is 15 inches wide, 1 inch too large.

One Passenger, One Bag

Theoretically, if airlines follow this guideline "everyone should have a chance to store their carry-on bags on board aircraft of 120 seats or larger," the trade group said. Today, it's typical for the last 20 or so passengers to board to be forced to check their bags at the gate because the bins are already full.

Nine major international airlines will soon introduce the guideline into their operations. Chris Goater, a spokesman for the transport association, said they are: Avianca, Azul, Caribbean Airlines, Cathay Pacific, China Eastern, China Southern, Emirates, Lufthansa and Qatar.

"It's certainly not mandatory," Goater said.

No U.S. airlines have yet signed on, but Goater expects more carriers to quickly do so. The suggested size was just unveiled publicly Tuesday at a meeting of global airline CEOs in Miami.

The airlines said they are working with several large luggage manufacturers including Samsonite, Delsey and Tumi (TUMI) but none have yet signed on. Bags with new labels, designating them as "Cabin OK," are expected to be in stores by the end of the year.

Airline consultant Robert Mann said that if airlines did a better job of handling checked luggage, passengers wouldn't bring so many on the plane and fight for overhead bin space. Those $25 bag fees don't help either.

"They literally create a disincentive to play their game," Mann said.

In the end, Mann said airlines will do very little -- regardless of bag size -- to separate frequent business travelers who account for the bulk of their revenue from their suitcases.

 

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The Big Cover-Up About Lost U.S. Manufacturing Jobs

June 10, 2015, 4:56 am

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Filed under: Labor, International Trade, Job Market, Manufacturing, Economy

By Bob Woods, special to CNBC.com

When it comes to the manufacturing sector in the U.S., it's not quite "Happy Days Are Here Again," as some have been singing for the past few years. Once you look closely at the data, it's more like "Those Were the Days."

That's because since the Great Recession, manufacturing is down 3.2 percent, according to an eye-opening report by the nonpartisan Information Technology and Innovation Foundation. It notes there are now 15,000 fewer production facilities in the U.S. than in 2007 -- and 2 million fewer jobs.

A look at the numbers suggests that the rallying cry about a manufacturing renaissance has been wishful thinking among many industry trade groups and economists. Even favorable shifts in a host of factors, including labor costs, the shale gas boom, transportation costs and the weak U.S. dollar, hasn't revitalized the sector to its post glory days.

We're seeing stable and slow recovery in demand ... but that doesn't necessarily mean that growth will continue or that we're in a state of renaissance.

According to the National Association of Manufacturers, the industry trade group, federal policies on taxes, energy, regulations and competitiveness are what's holding back further growth. Right now the sector accounts for 12 percent of GDP and supports an estimated 17.6 million jobs.

"We're concerned about the overall decline of the manufacturing industry since around the turn of the century," said Adams Nager, an economic research analyst at ITIF and co-author with Robert Atkinson of "The Myth of America's Manufacturing Renaissance: The Real State of U.S. Manufacturing."

Much of the renaissance hype is tied to growth over the last four to five years since the Great Recession, which can be misleading, he added, because the trough was so deep. "We're seeing stable and slow recovery in demand, and that explains the growth in manufacturing, but that doesn't necessarily mean that growth will continue or that we're in a state of renaissance," Nager said.

The best measure of the health of manufacturing is real value added, Nager said. Since 2013, the most recent year data is available, that number was down 3.2 percent from 2007 levels -- just prior to the recession -- despite 5.6 percent GDP growth, he noted. "If you take out computers," a particularly strong sector, "we shrank 7.7 percent." What's more, the report said, there are still 2 million fewer jobs and 15,000 fewer manufacturing establishments than there were in 2007.

In February 2012, PricewaterhouseCoopers released a study entitled, "Shale Gas: A Renaissance in U.S. Manufacturing?" It was among similar widely touted analyses of how the ongoing boom in natural gas -- largely prompted by hydraulic fracturing, or fracking -- was one of several key components that might lead to a surge in U.S. manufacturing and employment. Others were the low rate of the dollar, the high price of oil (then around $100 a barrel) and rising labor costs in China.

During the intervening three years, however, those trends haven't exactly panned out, as the ITIF's myth-busting report laid out:

• On Chinese labor: Chinese wages, while rising rapidly, are still estimated to be just 12 percent of average U.S. wages in 2015.
• On high global shipping costs: They're back to normal after falling by 93 percent in a six-month period in 2009.
• On the shale gas boom: That low-cost alternative to oil and coal has had a minor impact only on energy-intensive industries, such as petrochemicals and drilling operations.
• On currency valuation fixing the trade deficit: The dollar has risen sharply, yet our trade deficit persists. "We've consistently run a deficit since 1975, and we're no closer to seeing exports get anywhere near our imports," Nager said. "The idea that we can just wait it out is pretty dangerous."
• On U.S. productivity restoring jobs: Productivity isn't increasing faster than that of other industrialized countries, and it is growing much slower than China and South Korea.

"There certainly have been some headwinds in the last few years, but the fundamentals are still in place," said Bob McCutcheon, PwC's Industrial Products leader. For instance, the strength of the dollar bares both good and bad news. It's a sign of continuing economic growth in the U.S., despite the lingering trade deficit, McCutcheon offered. Likewise, the precipitous decline in oil prices "is a direct reflection of what's been going on in shale gas. It's the global response to our strengthening position in the energy sector."

The resurgence in U.S. manufacturing is in fact a long-term prospect, McCutcheon clarified, and regardless of headwinds, certain sub-sectors, like energy, are doing better than others. Heavy-equipment, metals and chemicals, which benefit from being less labor-intensive, and lower energy costs, are relatively robust. He also points to advanced, disruptive technology -- robotics, 3-D printing, the Internet of Things -- as American strengths.

"The global economy is evolving, and the U.S. is right in the epicenter of it all," opined Dave Blanchard, a senior editor at IndustryWeek, in sizing up America's current manufacturing stature. He addressed the ballyhooed promise of reshoring or near-shoring of jobs back to the U.S. from foreign sites. Reports of Apple (AAPL), GE (GE), Caterpillar (CAT) and other major players reshoring some operations are feel-good anecdotes, he said.

And manufacturers could reduce supply-chain costs, like logistics, transportation and warehousing, by setting up shop in close-by, low-wage countries such as Mexico. But that's not going to make a dent in the nearly 5 million U.S. manufacturing jobs lost since 2000, he said.

The National Skills Shortage

Blanchard said that "the state of U.S. manufacturing in 2015 is relatively robust compared to where it had been over the previous decade," referring to the rebounded auto industry and the energy sector, and that increased use of robotics and other next-generation manufacturing technologies hold promise. In that latter vein, he joins a rising chorus of observers who insist that although the U.S. remains the world leader in R&D, training workers to use the technology is one of the greatest challenges for manufacturers.

Sridhar Kota is a professor of mechanical engineering at the University of Michigan and a board member of the coincidentally named Manufacturing Renaissance, a Chicago-based nonprofit champion of advanced manufacturing. He also served from 2009-12 in the White House Office of Science and Technology Policy, where he helped establish the Advanced Manufacturing Partnership and its signature Manufacturing Innovation Institutes.

"We need a plan for what to do with good ideas and how to mature them," he said, "to create the infrastructure, knowledge and skills so that ideas turn into products and the manufacturing sticks here, rather than invent it here and make it 'over there.'"

He bemoaned the fact that R&D in the U.S. was responsible for the technology behind solar cells, lithium-ion batteries and flat-panel TVs, though we ceded production of those lucrative markets to overseas manufacturers.

Getting Back Our Mojo

"Those ships have sailed, and they're not coming back," he said. But what about next-generation technologies we're working on now, such as flexible electronics, nanocellulose and self-driving cars? "We can't let Asia pick them up," he said, advocating for more public-private R&D partnerships. "When new technology is emerging, you want R&D and manufacturing to be co-located."

Kota agrees with NAM and other manufacturing boosters that to spur existing industries, the U.S. needs to make them more competitive through reforms of the tax code, free trade and regulations. Echoing that sentiment is Deborah Wince-Smith, president and CEO of the Council on Competitiveness in Washington, D.C. The non-partisan council supports manufacturing competitiveness through innovation, but is critical of what Wince-Smith said is "our very innovation-hostile capital cost structure and regulatory environment in the U.S. that's impeding many of these things," especially advanced manufacturing.

She, too, calls for new models of public-private partnerships to foster R&D. Toward that effort, this week the council will announce a new initiative, Exploring Innovation Frontiers, a 10-year program integrating energy and manufacturing productivity.

"We continue to be an innovation game-changer in many areas," Wince-Smith said, "but it can't just be in software and communications. We still have to make things, because we live in a physical world."

-By Bob Woods, special to CNBC.com

 

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Why Lower Gas Prices Really Haven't Helped Much

June 10, 2015, 6:01 am

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Filed under: Energy, Gas Prices, Federal Reserve, Consumer Issues, Economy

By Jeff Cox

Folks waiting for that big economic boost from lower gas prices ought to stop holding their breath.

That's because moves like the one seen since June 2014 -- down an average of 84 cents a gallon -- often don't have a huge impact, particularly if they're driven by supply surges rather than demand drops.

A research paper this week (with multiple charts) from the New York branch of the Federal Reserve clarifies the effects: Using a slew of variables and looking from 1986 through the first quarter of 2015, the conclusion was basically that in instances of oversupply, gross domestic product and consumption over the longer run increase "quite modestly" while nonresidential investment i.e., capital expenditures for business shows somewhat stronger growth.

Americans are certainly driving more, and in newer cars. We just might not have any particular place to go.

For Wall Street economists, the findings could be something of a jolt. Over the past three quarters and then some, they've been projecting that big savings at the pump would propel consumers to become increasingly confident and spend more.

Reality, though, hasn't meshed. Consumer spending has been tepid and GDP growth has been abysmal -- a decline of 0.7 percent in the first quarter, a gain of just 2.2 percent in the fourth quarter of 2014, and second-quarter growth tracking at just 1.1 percent, according to the Atlanta Fed.

That's occurred as gas prices at the pump plunged from an average of $3.70 a gallon a year ago to $2.86 a gallon this month, with a low of $2.15 a gallon back in February, according to the Energy Information Administration.

Researchers at New York brokerage Convergex believe they know where Americans spent their savings at the pump -- on more gas. Looking at one period, Convergex found that Americans drove 3.9 percent more in March 2015 than in March 2014.

"Americans are certainly driving more, and in newer cars," Nick Colas, the firm's chief market strategist, said in a note. "We just might not have any particular place to go."

As for a future economic bump from lower gas prices, New York Fed researchers Jan Groen and Patrick Russo said the biggest impact is probably in the rearview mirror.

"Our analysis suggests that the expansionary oil supply shock of late 2014 and early 2015 will have a relatively modest stimulative impact on economic activity," they wrote. "Which will peak around mid-2015, and the effects should dissipate significantly by early 2016."

 

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U.S. Budget Deficit Drops to $82.4 Billion in May

June 10, 2015, 7:03 am

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Filed under: GDP, Federal Reserve, Government Spending, Treasury, Economy

By MARTIN CRUTSINGER

WASHINGTON -- The U.S. budget deficit for May dropped sharply from the level a year ago but much of the improvement reflected a calendar quirk.

In its monthly budget report, the Treasury Department said Wednesday that the May deficit dropped to $82.4 billion, down from a deficit of $130 billion in May 2014. But last year's deficit was inflated because June 1 fell on a Saturday, requiring the government to mail out $35 billion in June benefit payments in May of last year.

For the first eight months of this budget year, which began Oct. 1, the deficit totals $365.2 billion, down 16.3 percent from the same period last year. This year's deficit improvement has been helped by a stronger economy, which has pushed up tax receipts by 8.6 percent.

The revenue increase pushed receipts to $2.1 trillion for the period October through May. Outlays were up at a slower pace, rising 4 percent to $2.47 trillion.

The government has run a deficit in May for 60 of the past 61 years. The May deficit followed a $156.7 billion surplus in April, when a flood of tax payments pushed government receipts to an all-time monthly high.

The Congressional Budget Office is forecasting that the deficit for the full year will total $486 billion, little changed from last year's deficit of $483.4 billion.

The 2014 deficit was down from $680.2 billion in 2013. Before then, the U.S. had recorded four straight years of annual deficits topping $1 trillion. That reflected the impact of a severe financial crisis and the worst recession since the Great Depression of the 1930s.

In the budget plan President Barack Obama unveiled for 2016, his final full year in office, the president is seeking authorization from Congress to spend $4 trillion and is projecting a deficit of $474 billion.

Obama's spending plan would boost spending on domestic and military programs and seek to raise taxes by $2 trillion by raising levies on the wealthy, corporations and smokers.

Republicans have attacked Obama's proposed tax increases and the fact that under Obama's spending plans, the budget will never reach balance. A GOP budget which cleared Congress last month seeks to balance the government's books over the next decade. It would cut spending on domestic programs and government benefits like Medicaid and food stamps.

Democrats have charged that the GOP budget only balances on paper because Republican lawmakers will balk at approving the follow-up legislation to enact the painful cuts needed to achieve balance without raising taxes.

 

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'Throwing Shade': Taco Bell Execs Bone Up on Youth Lingo

June 10, 2015, 7:38 am

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Filed under: Company News, Advertising & Marketing, Food & Beverage, Restaurants

By CANDICE CHOI

NEW YORK -- Taco Bell executives are studying a strange new vocabulary emerging on this side of the border -- the lingo of its young customers.

CEO Brian Niccol said the company features a "Millennial Word of the Week" at its headquarters as a reminder of how the chain's biggest fan base communicates. Niccol said the words are "curated" by a group of employees in their 20s who send out an email every Tuesday or Wednesday. The words are also posted on screens and monitors around the office in Irvine, California.

The practice is another illustration of how eager companies are to understand millennials, who marketers say have quirks and traits that separate them from past generations. It's a demographic that's particularly important for Taco Bell, which is known for having younger customers who gobble up creations like Dorito-flavored tacos.

In the past, Niccol has said Taco Bell's success has been driven by the time it spends understanding what makes its customers tick. That apparently includes familiarity with the way they talk.

One installment of the "Millennial Word of the Week," for instance, featured the word "lit." According to a company email, the word is an adjective "used to describe a certain situation, person, place or thing as awesome/crazy or just 'happening' in general."

As an example of usage, it said, "Taco Bell was so lit last night. I had to wait in line for 15 minutes before I could order."

Other slang terms featured in Taco Bell's weekly updates have included "throwing shade," which Urban Dictionary says is to publicly denounce or disrespect a person and "Dat ___, doe," which translates to "That ___, though," and is used to emphasize that something is "particularly awesome," according to Urban Dictionary.

"Some of these words you see, I don't even know how you could use that in a sentence," said Niccol, 41.

That proved true last year when he spoke at a presentation by Taco Bell parent company Yum Brands (YUM), which also owns KFC and Pizza Hut. At the time, Niccol informed the audience of analysts and investors about the millennial phrase "on cleek," which he explained meant "on point."

Later, the website Buzzfeed noted that Niccol had meant to say "on fleek." In a conversation with The Associated Press, Niccol said his social media team was quick to correct him after the meeting.

"The next day they were like, 'You were close,'" Niccol said. "I accused them of telling me it's 'on cleek.'"

Taco Bell's push to connect with teens isn't limited to a study of their linguistics patterns, of course. Niccol said the chain is also formalizing a "teen advisory board" that will meet regularly and give the company feedback on what's happening in culture.

"In the end, that's how Taco Bell stays relevant," Niccol said.

 

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Market Wrap: Wall Street Gains on Optimism About Greece

June 10, 2015, 9:55 am

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Filed under: Technology, Market News, European Union, Banks

By Caroline Valetkevitch

NEW YORK -- U.S. stocks jumped Wednesday, helped by optimism that Greece may be closer to reaching a deal with creditors, and by gains in technology and financial shares.

All 10 major S&P 500 sectors ended higher, with the technology index up 1.6 percent and leading the gainers.

The S&P financial index, which has risen with the prospect of higher rates, climbed 1.4 percent and turned positive for the year.

The chairman of eurozone finance ministers said a cash-for-reform deal with Athens was still possible in time for their June 18 meeting, with just a few issues remaining to be solved, but Greek counter-proposals weren't yet satisfactory.

A Bloomberg report said the German government may settle for a clear commitment by Greece to at least one reform measure in order to unlock aid.

"The notion that they're going either kick the can down the road some more or actually come up with some kind of mutually acceptable deal is a mild positive. It's more the avoidance of a short-term negative," said Uri Landesman, president of Platinum Partners in New York.

Netflix (NFLX) was up 3.7 percent at $671.10 and hit a record intraday high of $692.79, a day after shareholders approved a massive increase in the number of shares the company is authorized to issue, the first step toward a possible stock split.

The Dow Jones industrial average (^DJI) rose 236.36 points, or 1.3 percent, to 18,000.4, the Standard & Poor's 500 index (^GSPC) gained 25.05 points, or 1.2 percent, to 2,105.2 and the Nasdaq composite (^IXIC) added 62.82 points, or 1.3 percent, to 5,076.69.

U.S. stocks have been under pressure as investors expect the U.S. Federal Reserve to raise rates sooner rather than later. The Fed has said it will raise rates only if data points to a recovery in the U.S. economy, which had come to a standstill in the first quarter.

HCC Insurance Holdings (HCC) shares rose 36.4 percent to $77.35 after Tokio Marine Holdings said it had agreed to buy U.S. specialty insurer for $7.5 billion.

Advancing issues outnumbered declining ones on the NYSE by 2,207 to 849, for a 2.60-to-1 ratio on the upside; on the Nasdaq, 2,032 issues rose and 731 fell for a 2.78-to-1 ratio favoring advancers.

The S&P 500 posted 35 new 52-week highs and 4 new lows; the Nasdaq recorded 167 new highs and 34 new lows.

About 6.5 billion shares changed hands on U.S. exchanges, above the 6 billion daily average for June so far, according to BATS Global Markets.

-With additional reporting by Tanya Agrawal.

What to watch Thursday:

• At 8:30 a.m. Eastern time, the Labor Department releases weekly jobless claims, and the Commerce Department releases retail sales data for May.
• At 10 a.m., Freddie Mac releases weekly mortgage rates, and the Commerce Department releases business inventories for April.
• Retailer Restoration Hardware (RHI) reports quarterly financial results after U.S. stock markets close.

 

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Where Have All the Union Voters Gone?

June 10, 2015, 10:00 pm

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Filed under: Careers, Labor, U.S. Government, Elections, Economy

The campaign for the White House, 2016 edition, is cranking up. At last report, some nine Democrats, 18 Republicans, and 18 more third-party and registered independent candidates had thrown their hats in the ring. (Some of them, you may even have heard of.)

With 45 candidates in the running, every vote will count as these folks head to the primaries. Unfortunately for the candidates, one particular class of voter may be in short supply this election cycle: union voters.

There (Was) Power In a Union

That's the upshot of a new poll released by Pew Research a few weeks back, which finds that despite their continuing popularity, actual labor union membership continues to dwindle. According to ClosetheGapCA, a political organization in California, "state and local labor unions are a powerful organizing force" that can help get a campaign off the ground. Moreover, "an endorsement from unions in your district provides a 'seal of approval,' encouraging members of the labor union to vote for the endorsed candidate."

Citing research from the International Association of Fire Fighters, ClosetheGap notes that "seven in ten union members say they are more likely to vote for a candidate who is supported by the AFL-CIO and national unions ..."

And yet, citing U.S. Bureau of Labor Statistics and Congressional Research Service data, Pew notes that union membership has plummeted to just 11.1 percent last year from about 20.1 percent in 1983 -- and a high of 34.8 percent of "wage and salary workers" in 1954. As a result, not all union endorsements are worth what they used to be.

Some Unions Are More Equal Than Others

The damage to union membership rolls, you see, while widespread, hasn't been distributed evenly. According to Pew data, membership in unions has declined in percentage terms both among public-sector workers (teachers, policemen, government bureaucrats) and in the private sector (steelworkers, autoworkers). Actual union members in the public sector, however, have grown to 7.2 million today from 5.7 million in 1983. In contrast, private sector union rolls have plunged 38 percent, to just 7.4 million today from 11.9 million 32 years ago.

Pew data show that today, the two jobs categories boasting the highest levels of union membership both lay in the public sector: "education, training, and library," and "protective service" (police officers and firefighters). In each profession, roughly 35 percent of the labor force in unionized.

The two professions least likely to be unionized are "sales and related" and "farming, fishing, and forestry," followed by workers in the food industry and the IT sector.

In between, four professions still boasting relatively robust union membership, but suffering steep declines regardless, are "construction and extraction," "transportation and material moving," installation, maintenance, and repair," and "production."

What It Means to You This Election Cycle

Electorally speaking, the steepest cuts in union membership seem to be falling on key "industrial" demographics. This could diminish the influence of traditional powerhouses such as the AFL-CIO and SEIU (Service Employees International Union) in the upcoming elections. In contrast, continued strength in the police and teachers unions suggest these traditionally key constituencies for the Republicans, and Democrats, respectively, can expect to receive prolific pandering this election season.

This will be an important dynamic for taxpayers to monitor this election cycle. Sure, overall, union membership is lower today than it's been in decades, and continuing to trend down. But the relative strength of public sector unions, and the fact that their numbers are growing -- in contrast to the private sector -- means that America's ongoing problem with paying for public pensions isn't going away any time soon. With so many politicians angling for the few union voters still available to be swayed, the pressure to continue making promises -- payable at a later date by taxpayers -- will be difficult to resist.

Taxpayers, this election season, remember: As you reach for the ballot pen with one hand, keep your other hand on your wallet.

Motley Fool contributor Rich Smith's mind is still boggled by that number. 45 candidates? Seriously? Rich has no position in any stocks mentioned. The Motley Fool has no position in any stocks mentioned above, either. Try any of our Foolish newsletter services free for 30 days. Check out our free report on one great stock to buy for 2015 and beyond

 

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Middle-Aged MTV Generation Faces Retirement Wake-Up Call

June 10, 2015, 10:00 pm

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Filed under: Student Loans, Personal Finance, Retirement Plans, Auto Loans, Financial Education

By Hal M. Bundrick

NEW YORK -- They were "latch-key kids," then MTV teens and now mid-career workers with kids of their own. Gen X, the leading edge of which will turn 50 next year, with the youngest hitting 35, are facing the reality of their looming retirement prospects. And so far, there is much room for improvement.

Gen X was roiled by the Great Recession, losing nearly half of their wealth -- a full 45 percent. Now, a new study by Northwestern Mutual reveals that Gen X is compounding that major setback with the poorest financial habits of the four generations surveyed. Most respondents characterized themselves as spenders rather than savers, making them the generation most likely to have more debt than savings.

Almost 4 in 10 -- 37 percent -- admit they do not "at all feel financially secure," an outlook more pessimistic than any other generation, even the often money-challenged millennials.

And nearly one-quarter of Gen X is "not at all confident" that they will achieve their financial goals, with their top financial fear including a lack of retirement savings. Remember, this is the generation that may face the ramifications of a shaky Social Security system, the trust funds of which are forecast to be depleted by 2033, according to a recent study by researchers at Harvard and Dartmouth.

"It is not easy being X," said Rebekah Barsch, vice president of financial planning with Northwestern Mutual, in a statement. "Aside from weathering a number of economic cycles, this group is juggling home mortgages, educational debt and lifestyle needs."

Besides having kids of their own -- 44 percent have children under the age of 18 -- more than one-quarter have a parent or other relative living in the household as well. No wonder 36 percent of Gen-Xers have trouble paying their mortgage or rent. Nearly one-quarter (23 percent) have also quit putting money into a 401(k), IRA or other retirement account, according to the Insured Retirement Institute.

The result: Gen-Xers' median savings for retirement has fallen 15 percent in the last two years, from $70,400 in 2012 to $59,800 today. Of those who have managed to set aside money for retirement, 42 percent have less than $50,000 saved.

But facing a potential retirement shortfall, Gen-Xers have something their Boomer parents don't have much of: time to recover. As they cross the 50-year-old yard line, "catch-up" retirement plan contributions kick in, allowing an additional $1,000 to be put into IRAs -- and an extra $6,000 in 401(k)s.

Gen-Xers also have time to pay off their mortgages before retirement, helping reduce monthly budget demands for life after work.

And as their children grow older, expenses may decline, allowing even more financial resources to be allocated to retirement savings -- before their prime earnings years pass.

Facing 40 -- or pushing 50 -- may give the grunge generation something they need most: a wake-up call.

 

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Cash for Clutter: 15 Household Items You Can Sell

June 10, 2015, 10:00 pm

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Filed under: Books, Art, Antiques & Collectibles, Auctions, Clothing & Accessories, Furniture

By Tahirah Blanding

It's time to rethink your household junk. What may appear to be useless clutter could actually be worth hundreds or even thousands of dollars. According to a Nielsen survey conducted for eBay, the average home has $3,100 worth of unused items, mostly clothing and electronics. If you look carefully, you may find that your attic, garage, and closets contain valuable stuff that can put money in your pocket. Cheapism.com rounded up some common household items that collectors are looking for.

Vintage Toys. Older toys are in high demand and you may be surprised by the value of the kids' playthings sitting in your closet. On eBay, a pair of vintage pogo sticks are selling for $50. Original Cabbage Patch Dolls are listed for hundreds of dollars. And some old Matchbox cars are worth more than $1,000.

Comics and Magazines. Even if you aren't a comic book collector, you still might have some valuable comics lying around. Early issues of X-Men, Flash, and Strange Tales are selling for $50 an issue on eBay. Collectors are also looking for vintage issues of Sports Illustrated, TV Guide, and Time magazine.

Books. Scan your shelves for interesting titles and first editions. There are lots of online resources to help you estimate the value of your books; the popular used books website AbeBooks lets you search by author, title, or ISBN number. As a general rule, the rarer the book, the more you are likely to get. For example, AbeBooks is selling a first edition of Ken Kesey's "One Flew Over the Cuckoo's Nest" for $13,500.

Designer Clothes. If there's a designer label among the clothes, shoes, and accessories lurking in the back of your closet, you can cash in. Prices for many used and vintage designer items can be surprisingly high. For example, a pair of Christian Louboutin high heel shoes that sold for $675 new are listed on Tradesy, a high-end online consignment shop, for $556. Other potential marketplaces include Craigslist and consignment shops.

Gaming Consoles and Accessories. Old video game consoles from PlayStation, Xbox, and Nintendo don't usually sell for thousands of dollars, but you can still cash them in for a third or even half of the original selling price. For example, a PlayStation 2, which debuted in 2000, is selling for $100 on eBay, while an unused PlayStation 2 is listed for an impressive $1,800. Another eBay user listed a Nintendo Game Boy for $139. Pawn shops are also a good place to sell old consoles and games.

Stereo Equipment. Old audio equipment is in high demand. Stereos made in Japan in the 1970s are particularly desirable, so if you have an old Pioneer or Marantz receiver sitting in the closet you may want to put it on eBay or Craigslist. Boomboxes from the 1980s are also gaining value, as are Sony Walkman cassette players.

Small Appliances. Many of us have small, rarely used appliances tucked away in the kitchen. They're relatively easy to turn into cash through various online marketplaces. An Oster mixer from the 1960s might bring $100, while a vintage Hamilton Beach milkshake mixer from the 1950s might be worth several times that. More recent kitchen equipment in good working order is also in demand, for prices that are close to new.

Costume Jewelry. Jewelry is a big seller online and buyers aren't always looking for expensive gems or stones. Costume jewelry is typically made of plated metal and other inexpensive materials and can appear to be worthless. Before you toss dull-looking or gaudy jewelry aside, try pricing it on eBay, which has a large costume jewelry category -- you might be pleasantly surprised. Local pawn shops readily purchase costume jewelry as well. And if you have an abundance of costume pieces, try setting up an online jewelry boutique on Etsy.

Furniture. Furniture may not be easy to ship but mid-century modern furniture is easy to sell. Interior designers, collectors, and the design-savvy are always looking for unique furniture, and pieces with a Scandinavian look are extremely popular right now. Chairish, an online marketplace for used and vintage furniture, helps coordinate the sale and shipping in return for a 20 percent cut of the price. Prices are robust; a mid-century modern-style table lamp is going for $499 on Chairish, for example. Etsy is another online marketplace for furniture; a vintage Danish-style sofa bench is currently listed at $795.

Vinyl Records. If you don't have any vinyl records, you may know someone (such as a parent) who does. Most vinyl records are vintage at this point, and records made by certain artists can be worth hundreds and even thousands of dollars. Music stores are the best option for selling old records, and eBay has fairly extensive listings as well. One eBay user has listed an Elvis Presley record collection for $4,500.

Board Games. Vintage board games don't sell for as much as other household items, but they still may be worth their original price or better. Monopoly and Mahjong are two of the most sought-after board game sets. For example, a 1991 collector's edition Monopoly is selling for about $52 on eBay.

Glass Bottles. Glass bottle collectors will pay top dollar for old bottles. Collectors focus on bottles from the 1800s and 1900s, with mouth-blown and imprinted bottles receiving the most attention. Collectors Weekly maintains a useful list of the most-wanted specimens. Some of the bottles on the list are fairly common, so there's a good chance some may be in your house.

Typewriters. Even though the technology is now outdated, buyers are willing to pay $100 or more for old typewriters. Rare metal-plated typewriters receive high bids on sites like eBay. The most expensive typewriter currently on eBay, a Sholes & Glidden Remington 1, is priced at $14,999 and more than 100 potential buyers are watching the auction. But even ordinary typewriters of more recent vintage are worth something. Typewriters were a household staple for many years, so there's a good chance you still have one somewhere.

Photographs. You can make good money selling old photographs, especially those with celebrities or from specific eras. Old Photographic, an online vintage photography magazine, buys rare and vintage photos, albums, and negatives, and some vintage shops also buy old photographs. One photographer sold a collection of Beatles photos taken by an amateur at Shea Stadium in 1965 for 30,000 pounds ($46,000). You never know what pictures you may have tucked away in old family photo albums. Pictures of generals, celebrities, old war equipment, or famous events could bring in hundreds of dollars.

Workout Gear. Surprisingly, brand name aerobics and fitness attire from the '80s and '90s is currently a hot commodity. For example, a vintage Adidas windbreaker is going for $49.99 on eBay. Old equipment is selling too: A 1961 belt massager, which originally sold for $94.95, is listed on eBay for more than $200.

 

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What Happens When You Miss a House or Car Payment or Two

June 10, 2015, 10:00 pm

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Filed under: Mortgages, Personal Finance, Auto Loans, Credit Score, Financial Education

By Ellen Chang

NEW YORK - Consumers who are facing delinquent car or mortgage payments should start by negotiating with their lender instead of ignoring the problem.

Dealing with the lenders head-on when you know a late payment is imminent will help you in the long-run, because they will be more willing to work with you and offer a variety of payment options. This can be one way to salvage your credit score. If you are coping with a budget crunch or if the unemployment checks have nearly run out, start addressing the issue of having to skip a payment.

The worst thing consumers can do is disregard the issue entirely and believe they can start making payments on their delinquent account once they start earning a salary. Depending on your lender and if you routinely pay on time, the company might have a grace period of a week before incurring a late fee or will reverse it, said Leslie Tayne, a Melville, New York, attorney specializing in debt relief.

Some companies allow borrowers to qualify for a forbearance, which provides temporary relief from your full payment or to skip a couple of payments, said Bruce McClary, spokesperson for the National Foundation for Credit Counseling, a Washington, D.C.-based nonprofit organization.

"You never know if you qualify for these or other options unless you take the first step and call the lender before things get worse," he said.

Auto Lenders Are Less Forgiving

Many lenders are less merciful when it comes to missing a car payment and repossession is more likely to be on the table.

Some lenders will repossess the vehicle "as soon as a payment is missed in some cases," said McClary. Discuss your options with the lender to avoid further delinquency. Some lenders will want to avoid the extra work and expense of repossessing your car and might allow consumers to skip or defer a payment, he said. Don't count on it and call them to see if it is a viable option. Others might be more lenient and can offer to change the terms or refinance the loan for more affordable payments.

"If those actions don't look possible, you can try to sell the car or turn in the keys for a voluntary repossession," McClary said.

Car Loan Payment Options

Consumers who believe it is just a temporary setback might be able to skip a payment or make lower ones for a few months. The lender will want you to add the missing amounts at the end of the loan.

Refinancing your current auto loan might be worth it if you need to save more money in the long term, said Kevin Gallegos, vice president of the Phoenix operations for Freedom Financial Network, a consumer debt resolution company. This means you would wind up with a lower interest rate or a longer loan term, so start by asking your current lender.

Selling your car might seem like a worst case scenario, but it means you will have the flexibility of having extra cash to pay bills, especially your rent or mortgage or the option to buy a cheaper car.

First, do some research, and find out if it's worth selling. Determine how much you owe on the car and see if you can sell the car for more than the amount of your existing loan.

"You would be able to pay off the bank, maintain your credit profile and hopefully have enough cash to purchase a less expensive car," he said.

Once you have hit 90 days of not making any kind of a payment, the lender will definitely send your account to collections and the car will be repossessed, said Katie Ross, education and development manager for American Consumer Credit Counseling, an Auburndale, Massachusetts-based financial education nonprofit organization.

If you run into financial trouble, it is crucial to explain your situation to the lender.

"If the situation is dire, a bank may even allow a buyer to miss a payment or two while things get better," said Matt Jones, a senior editor for Edmunds.com, a Santa Monica, California-based car shopping website.

Missing Mortgage Payments

Mortgage lenders tend to be more tolerant if you miss one or two payments and the timeline for a foreclosure is longer.

Missing a second payment makes your situation even more dire. While a foreclosure typically can't start until your mortgage is at least 120 days past due, it is a serious problem, said McClary.

Since most lenders require homeowners to make a payment by the first a month, a grace period is usually only given until the 15 of the month. Once you have surpassed that date, your payment will be considered delinquent, said Kevin Gallegos, vice president of the Phoenix operations with Freedom Financial Network, a company that helps consumers with debt issues.

The good news is that the majority of lenders won't report that the payment is late to the three credit bureaus until it has been 30 days late. Your credit score can be "hit hard and sometimes up to 100 points for just one missed payment," he said.

Mortgage Payment Options

If you know your situation is just temporary, the lender may be willing to work with you on a payment plan, Gallegos said. Some homeowners will seek a forbearance agreement for a temporary hardship, and it will grant a homeowner the option to lower or eliminate payments for a "limited time," he said.

Loan modifications are a permanent change to the terms of the loan and will lower the payment by extending the loan's term or incorporate the delinquencies into future payments.

By the time you have missed a couple of payments, refinancing might not be a viable option. Lenders will likely only give you a higher interest rate, which means it won't lower the monthly payment.

Free Counseling Programs

Before you head into a potential foreclosure, one option is to seek free advice from a Housing & Urban Development-approved housing counseling agency, said McClary. These nonprofit agencies can help identify "sustainable ways to preserve home ownership or transition to more affordable housing while avoiding foreclosure," he said.

There are also two federal government programs whose goals are to help struggling homeowners and were founded in the aftermath of the 2008 housing market crash and global financial crisis. The Home Affordable Modification Program, or HAMP, assists homeowners who are in danger of a foreclosure and will help them refinance their mortgages to lower their monthly payments.

The second, known as the Home Affordable Refinance Program, or HARP, helps homeowners who have loans owned by Fannie Mae or Freddie Mac and haven't missed any payments yet, but don't have much equity in their home or owe more on their mortgage than the home's current value.

 

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Ask Stacy: Where Can I Go for Help With Debt?

June 10, 2015, 10:00 pm

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Filed under: Personal Finance, Credit Cards, Financial Services, Debt Assistance, Financial Education

By Stacy Johnson

According to NerdWallet, at the end of 2014, the average credit card debt for households that carried a balance was a whopping $15,609. That's enough to bust nearly any household budget. Fortunately, for those needing help, it's both easy to find and free.

Here's this week's question:

Are there any services available for consumers to use for credit card debt repayment? Ones that are safe and you can trust? -Dawn

The answer to your first question is simple, Dawn. Yes, there are tons of services that help consumers with credit card debt. The answer to the second question is also yes, but requires a bit more explanation.

Credit Counseling

Several years ago, a close friend of mine was in debt hell. Because of a bad relationship (her live-in boyfriend refused to work), she was unable to pay her bills. In addition to an overdrawn bank account and maxed-out credit cards, she even owed thousands of dollars on an engagement ring her beau had bought and never paid for. The only solution she could see, other than ending the relationship, was moving back in with her parents until she could regain her financial footing.

I offered another option: credit counseling. It's something I know a lot about. I've covered these services for decades and have sat on the board of two agencies.

A reputable credit counseling agency will put you on a debt management plan. This means they step between you and your creditors. They'll make the collection calls stop, help you prepare a repayment plan, possibly get some interest rates reduced and fees eliminated, and offer a specific date when you'll be debt-free. After entering a debt management plan, you'll stop using credit cards and start sending one check monthly to the agency, which they'll divide into prearranged payments and forward to your creditors.

Credit counseling worked for my friend because she had income -- you can't repay debt without it. Because she had a good job, all she needed was some room to breathe, and credit counseling offered it. Her plan, like most, took just more than four years to complete. Today she's debt-free, has a nice, fat savings account, and a much better boyfriend.

The vast majority of credit counseling agencies are nonprofit and free. In fact, if you ever have questions about anything debt related, you should call one of theses agencies and fire away: They're typically both friendly and knowledgeable.

While the advice is typically free, debt management plans aren't. You'll normally pay a monthly fee of $25 to $50, although that can be waived if you can prove hardship.

Finding the Right Credit Counseling Agency

The potential problem with the credit counseling industry is how they keep the lights on. Since they're charging their clients very little, they have to raise money somewhere. One of the chief providers of their funding has historically been the banking industry.

Since credit card companies and other lenders are the ultimate beneficiaries of people paying their bills, they often return a portion of the money collected by debt management plans to the counseling agency. This is called "fair share." While fair share payments aren't as generous as they used to be, they can still provide an incentive for employees of these agencies to put you on a plan. After all, that's the only way for them to make money.

There have been instances in which unscrupulous agencies jammed everyone who called into a debt management plan, even if they didn't belong in one. For example, some people can pay off their bills with just a little coaching -- they don't need a formal plan. Others are too far gone and should file bankruptcy. But because those options didn't create income for the agency, they weren't offered.

We've partnered with Consolidated Credit Counseling Service, a credit counseling agency I've known personally for many years. You can find them on this page of our Solutions Center and can reach them either online or on the phone.

But whether you use our partner or choose another agency, it's important to know how to find a reputable credit counseling agency. Here's what to look for.

Quality counseling agencies:

1. Disclose all fees, and keep them small. According to the National Foundation for Credit Counseling, "any set-up fee or monthly fee should be reasonable, usually defined as $50 or less, with monthly fees in the $25 range. The agency should be willing to waive all fees in cases of true hardship."
2. Are accredited by COA and affiliated with NFCC. If an agency is certified by the Council on Accreditation, you can be sure their counselors have had training. Another way to locate a reputable credit counseling group is to search through NFCC, which has a 60-year record and only supports legit groups. They also have a lot of advice on what to expect from credit counseling.
3. Work with you and all your creditors as long as necessary, by whatever means necessary. A serious organization will keep working with you until you don't need them. They'll offer service by phone, online and in person. They'll take a holistic approach and sound like a counselor, not a salesperson.
4. Spend resources educating people, not on lots of TV advertising. Our partner, Consolidated Credit Counseling, does do some advertising, but my experience suggests most quality agencies put what little money they have into helping people, not into ads.
5. Offer honest assessments of your credit and options. A good counselor will help choose among every available option, from tweaking your budget to filing bankruptcy. They'll also let you know that signing up for a debt plan won't damage your credit score but could look bad to some lenders.
6. Tailor the plan to your needs. Some people just need to trim a little spending to repay their debt, while others need a debt plan. A good agency will listen to what you need, rather than pushing prepackaged solutions.
7. Help anyone who asks. Reputable groups don't place restrictions on whom they help, as long as they can provide the necessary paperwork. They're not judgmental, either.
8. Are licensed, insured and answer to you. Trustworthy agencies earn trust by proving that they have the proper legal backing and by providing you with a statement at least quarterly.

If You Have a Problem, Make a Call

The worst mistake you can make is letting fear and anxiety cause you to freeze like a deer in the headlights. If you've got a problem and need help, make a call. Not soon, right now. It will cost you nothing, will definitely make you feel better and could very well change your life for the better.

Got a Question You'd Like Answered?

You can ask a question simply by hitting "reply" to our email newsletter. If you're not subscribed, fix that right now by clicking here.

The questions I'm likeliest to answer are those that will interest other readers. In other words, don't ask for super-specific advice that applies only to you. And if I don't get to your question, promise not to hate me. I do my best, but I get way more questions than I have time to answer.

About Me

I founded Money Talks News in 1991. I've earned a CPA (currently inactive), and have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate. Got some time to kill? You can learn more about me here.

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Q&A: Daymond John Not a Shark With His Own Money

June 11, 2015, 1:15 am

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Filed under: Personal Finance, Celebrities, Entrepreneurs, People, Financial Education

By Beth Pinsker

NEW YORK -- On ABC's "Shark Tank," Daymond John scrutinizes the business plans of wannabe entrepreneurs, but how does he manage his own finances?

A self-made businessman, John is actually pretty realistic -- working his way up many ladders and learning from failures. A native of Queens, New York, John founded FUBU at age 23 in 1992, riding the wave of hip-hop fashion trends.

Now 46, he has been with "Shark Tank" since its debut in 2009. He serves as a consultant, gives motivational speeches, writes books and is a spokesman for other businesses, such as Gillette.

Reuters spoke with John about how his acumen for business translates to managing his own money:

Q: How much of your net worth is locked away for the future, and how much is at your disposal now?

A: I've probably put in 50 percent for long-term, and the rest I play with. I have squirreled away enough to not have to worry about it. Hopefully, I'll never have to touch it, and it will be passed onto my kids or a great organization.

What I play with now, it can fluctuate. I can end up using a good percentage of it on a great acquisition, or I can hold it.

Q: How involved are you in the management of that money?

A: There are several levels of it. I'm involved when I'm doing my day-trading. When we're talking about asset allocation, I have very different approaches. I'm with Goldman [Sachs] and various other firms. I kind of let three out of five of them do their own thing. For two out of five, I monitor [my account] over the course of every month or so.

Q: Most of what you do on 'Shark Tank' can be considered alternate investments, but do you do anything beyond that to diversify your portfolio?

A: My larger investments have been apparel brands. As for real estate, I'm part of a fund, but I've never been that great at real estate.

Q: When you do a promotion like for Gillette's Shave Club, do you have an investment in that, or is it just for promotion?

A: It's a brand association. It's just an investment of my time and my face and my integrity. I don't take it lightly.

Q: You lend your name to a lot of causes as well. How do you decide what charities get your time and money?

A: It's not really a planned thing. I try to give on various platforms, and not do too much check-book philanthropy. For some, I will try to make more people aware of the plight, and help get more people to give. To some I will dedicate time, such as my desire to get out word about dyslexia.

Q: Do you have planned giving worked into your estate plan?

A: I don't have that formal plan -- some will go to family and certain small organizations. One is animal related, one is dyslexia, one is hip-hop against violence.

Q: Who first taught you about finance and money management?

A: I got the knowledge by blowing about $20 to $30 million the first time I made it. I'm not one of the few who hit lotto or peaked at 25 as an athlete. I have had several other bites at the apple.

Q: You have listed Robert Kiyosaki's 'Rich Dad, Poor Dad' as one of your favorite books. What have you learned from it?

A: The fundamental lesson to it is it's not how much you make, it's how much you save. You should go after small opportunities that have the potential to grow into large opportunities. That educated me on the tool of money.

 

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Retail Sales Jump in May, Brighten Growth Outlook

June 11, 2015, 1:35 am

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Filed under: Retail, Economic Indicators, Gas Prices, Apparel, Restaurants

By Lucia Mutikani

WASHINGTON -- U.S. retail sales surged in May as households boosted purchases of automobiles and a range of other goods even as they paid a bit more for gasoline, the latest sign economic growth is finally gathering steam.

While other data Thursday showed a slight increase in new applications for unemployment benefits, the number remained in territory associated with a tightening labor market. The signs of a firming economy could likely prompt the Federal Reserve to raise interest rates in September.

"Today's data, including the trend-like jobless claims number, keep September firmly in place as a credible option for the Fed," said Anthony Karydakis, chief economic strategist at Miller Tabak in New York.

Retail sales increased 1.2 percent last month after an upwardly revised 0.2 percent gain in April, the Commerce Department said. April sales were previously reported to have been unchanged. March sales were also revised to show them rising 1.5 percent instead of 1.1 percent.

The dollar rallied against a basket of currencies on the retail sales data. Prices for U.S. government debt rose as lower European borrowing costs renewed appetite for Treasuries. U.S. stocks were trading higher.

The U.S. central bank has kept its short-term interest rate near zero since December 2008. Solid retail sales data added to robust job growth in May and stabilizing manufacturing activity in suggesting the economy was finding momentum after getting off to a slow start in the second quarter.

Retail sales excluding automobiles, gasoline, building materials and food services increased 0.7 percent last month after an upwardly revised 0.1 percent rise in April.

These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. Economists had forecast core retail sales rising 0.5 percent after they were previously reported to have been flat in April.

March core retail sales were also revised up to show them increasing 0.9 percent instead of 0.5 percent.

Growth Picture Brightens

The government's most recent growth estimate showed gross domestic product contracted at a 0.7 percent annual pace in the first quarter.

But revisions to March core retail sales together with upbeat data on healthcare spending, as well as already reported revisions to construction spending, trade and wholesale inventory data suggest that output was probably not that weak.

"It is now possible that GDP didn't actually contract in the first quarter," said Paul Ashworth, chief U.S. economist at Capital Economics in Toronto.

Second-quarter GDP growth expectations were also boosted by a second report from the Commerce Department showing retail inventories, excluding autos, in April recorded their biggest increase since November 2013.

Consumer spending is likely to remain fairly strong in the coming months, supported by high savings, rising house prices and a tightening labor market, economists say.

We continue to expect robust consumption growth for the remainder of the year.

In a separate report, the Labor Department said initial claims for state unemployment benefits increased 2,000 to a seasonally adjusted 279,000 for the week ended June 6.

It was the 14th straight week that claims held below the 300,000 threshold, which is usually associated with a firming labor market. The government reported last week that 280,000 jobs were created in May, up from 221,000 in April.

"We continue to expect robust consumption growth for the remainder of the year," said Laura Rosner, an economist at BNP Paribas in New York.

Last month, overall retail sales were buoyed by a 2 percent jump in receipts at auto dealerships.

Sales at service stations rose 3.7 percent, reflecting a rise in gasoline prices. Sales at electronic and appliance stores gained 0.1 percent, while receipts at furniture stores increased 0.8 percent.

Sales at clothing stores surged 1.5 percent. Receipts at online stores climbed 1.4 percent and sales at sporting goods stores increased 0.8 percent. Sales of building materials and garden equipment advanced 2.1 percent.

Sales at restaurants and bars nudged up 0.1 percent.

 

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The Personality Type StumbleUpon's CEO Loves to Hire Is ...

June 11, 2015, 3:31 am

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Filed under: Careers, Job Market, CEOs, Career Change, Job Search

By Rachel Sugar

Everybody wants to hire stars. But StumbleUpon CEO Mark Bartels isn't looking for people who shine alone -- instead, he prioritizes candidates who are true collaborators.

Which isn't to dismiss the value of people who thrive alone. "You always want different types of people that you're working with, and individual contributors are great," Bartels tells Business Insider. "They're very productive, and they can have very high output." There's just one limitation: ultimately, they're only one person.

That's why he looks for what he calls "enablers" -- people who are not only high achievers, but also make everyone around them better. "You hire one person," he explains, "but then that one person goes on and trains and shares ideas with three other people." The result is "a way more productive team" -- and fewer single points of failure.

In their natural habitats, enablers "tend to collaborate a lot," says Bartels. "They communicate a lot with other groups outside their particular pod. You'll see them programming with other engineers, they seem to want to organize meetups, and they tend to want to share trade secrets if it gets the job done faster." They're less protective of their own knowledge, and as a result, they "empower people around them."

But it's one thing to appreciate enablers in action, and another to spot them during the hiring process, before you've had the chance to see them in action.

In Bartels' experience, though, there's an easy tell: "Look for the words they use," he advises. While individual contributors tend to talk about "I" and "me," enablers rely on phrases like "we," "us," and "team." "When you ask them about a project, they'll talk about the team, and a lot of the time, they'll give credit to other people," he says. "And I don't see that as a weakness -- I see that as a positive."

 

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Murdoch Preparing to Step Down as 21st Century Fox CEO

June 11, 2015, 4:36 am

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Filed under: Company News, Media, Entertainment Industry, CEOs, People

By David Faber

Rupert Murdoch, the 84-year-old chief executive officer and controlling shareholder of 21st Century Fox (FOXA), is preparing to step down as CEO of the media giant and hand that title to his son James, according to numerous sources close to the Murdoch family.

An announcement is expected in the near term, while it's unclear whether the reorganization would take place this year or at the start of 2016. Rupert Murdoch will continue to be the executive chairman of Fox, while his son Lachlan would also become an executive co-chairman of the company.

As part of the management reordering at Fox, COO Chase Carey will step down and take on a yet undefined role as an advisor at the company. Carey was widely expected to exercise his right to an early release from his contract, allowing him to leave the company at the end of this year. Now, sources tell me, he is likely to remain in some capacity through 2016. He didn't return a call for comment,

While James Murdoch, 42, would take over the day-to-day management of Fox, he will work in tandem with his 43-year-old brother Lachlan and his father. Sources who have spoken with the Murdochs in recent weeks tell me they have shared their plans openly and describe the Murdoch brothers' new roles as a "partnership."

A Fox spokesperson said that the matter of succession is on the board of director's agenda at its next regularly scheduled meeting and declined further comment.

While no one doubts the elder Murdoch will still have the final say on whatever goes on at Fox, Carey's stepping down as COO will leave the company without a layer of senior management outside the family for the first time. For many years that role was filled ably by Peter Chernin, who departed as News Corp.'s COO in 2009 and was succeeded by Carey, who is widely lauded by shareholders for his management of the company's cable networks.

James Murdoch, who gave up his job running BSkyB after the U.K. hacking scandal engulfed the company four years ago, has been winning fans among the Fox investor base for his work as co-COO. They tell me they believe James has matured as a leader, has a detailed knowledge of the company's operations and is the driving force behind its expansion in digital distribution. As one source who knows both James and Lachlan well described it, "James will have the primary role in running Fox while Lachlan will take on a broader strategic role from his co-chairman position."

Rupert Murdoch, who through the Murdoch Family Trust controls 39.4 percent of the voting shares at Fox, isn't expected to change much of what he does day to day as chairman of both Fox and News Corp. (NWS), but the change at Fox is clearly an acknowledgement that the next generation of Murdochs is ready to take its place in leading the media giant.

 

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