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    How to Spend Less on Back to School Shopping

    By Krystal Steinmetz

    As summer begins to wind down and the school year draws near, many parents are preparing to open (and maybe empty) their pocketbooks on back-to-school shopping.

    According to the National Retail Federation, American families spend about 42 percent more on back-to-school purchases now than they did just a decade ago.

    Total spending on back-to-school shopping is expected to hit nearly $25 billion this year, the NRF said. On average, a family with school-age children plans to spend about $630.36 on school supplies, electronics and clothes this year.

    A RetailMeNot survey found that on average, parents spend about two weeks shopping for back-to-school supplies. More than 1 in 4 parents expressed concern about the financial burden and stress of back-to-school shopping.

    Parents can take some of the sting out of the annual ritual by taking advantage of sales-tax-free weekends in 17 participating states, as detailed by RetailMeNot. Click on an individual state to see what items will be tax-exempt: Tax-free shopping holidays typically start at 12:01 a.m. and end at midnight.

    Five states -- Alaska, Delaware, Montana, New Hampshire and Oregon -- don't have a sales tax. In eight states, clothing purchases are normally tax exempt (Minnesota, New Jersey, Pennsylvania and Vermont) or tax exempt up to a limit (New York, Massachusetts, Rhode Island, Connecticut) according to the Tax Foundation, a think tank in Washington, D.C.

    How much do you usually spend on back-to-school shopping? What are the most expensive purchases you'll make? Share your comments below or on our Facebook page.

     

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    A couple and their baby son looking at their household finances
    Alamy
    You see an advertisement for that dream home or car -- or the perfect getaway -- and reality quickly sets in: Your desires and bank account are not a match made in heaven.

    Many people live paycheck to paycheck, barely getting by. Others have an abundant income, but no idea how to manage it.

    Fortunately, there are ways to make your money work for you, no matter where you are on this spectrum.

    Don't know where to start? Here are some budget busters that may be quietly draining your wallet.

    1. Phony emergencies. A real emergency isn't so quiet. In fact, a layoff, unexpected medical bill or car breakdown tends to announce itself rudely and loudly.

    But other so-called emergencies -- like that oh-so-cute, on-sale bedding set for the kids, or that gotta-have-it-now bar of chocolate -- are really just "wants" masquerading as needs.

    Save the spending for real emergencies. And to make sure such events don't derail your finances, read 9 Ways to Build an Emergency Fund When Money's Tight.

    2. Electronics. Are you a gadget junkie? Maybe you have to have the latest and greatest iPhone or tablet?

    If you must have a particular gadget, consider buying a refurbished version. You may save up to 50 percent.

    3. Groceries. It's so easy to head to the store with a few things in mind, but end up spending $100 or more. That's where discipline comes in.

    Use a meal planner so you are buying what you really need, instead of grabbing whatever you desire at that moment. And don't forget your coupons.

    Never head to the store hungry, or you will be tempted to leave with every item that whets your mental appetite. (Take a look at 9 Tips to Cut Your Grocery Bill by Up to 50 Percent.)

    4. Dining out. Eating out is one of the most insidious ways to bleed your wallet. It's even worse if you spend hundreds at the grocery store each month, only to end up dining out more than you actually cook.

    Office lunch dates can put another hole in your finances, especially if they become part of your daily routine.

    If you insist on dining out, put the tips from 15 Ways to Cut Your Fine Dining Bill in Half to good use.

    5. Entertainment. Your friends are heading out for a night of fun, and you are all for it. After all, you've had a long week at work and the kids are driving you nuts.

    But there's a problem: Your bank account is on the brink of going into the red.

    Be wise and say no. Even if you have to make up a lame excuse, it's worth it to salvage your budget. (Check out 14 Ways to Have More Fun for Less Money.)

    Use common sense before spending needlessly on other types of entertainment. Do you really need to buy a book, CD or DVD? Would you enjoy those items any less if you borrowed them for free from the local library?

    6. Travel. There is nothing wrong with heading out of town for the weekend, or even planning an extended excursion. But if you're already struggling to make ends meet, now is not the time to splurge on five-star hotels and first-class flights.

    Here are 10 ways to get free lodging.

    7. Apparel. Those new heels you've been coveting have finally gone on clearance. But if your budget says no, it's wise to leave them at the store.

    Numerous studies have shown that material purchases do not make us happy for long. Instead, we get more satisfaction from spending on experiences.

    8. Pampering sessions. While your body may need a little TLC from time to time, heading to the spa or hair salon once a week has the potential to inflict serious damage on your savings.

    9. Cable. Instead of signing up for the most expensive plan, try basic cable. Or even better, cut cable altogether and go for much cheaper alternatives, such as Hulu, Amazon Prime and Netflix.

    See how you can stop paying for cable right now.

    10. Gym memberships. Being healthy and fit definitely have their perks, but spending way too much money to reach your fitness goals makes no sense.

    Ditch the gym and search for inexpensive or free activities at your community recreation center instead. Or try the great outdoors; a little fresh air won't hurt.

    Take a look at DIY Fitness: 10 Tips to Get in Shape Without the Gym.

    11. Housing. It is easy to drastically underestimate the monthly costs associated with that new home or apartment.

    Before you apply for a mortgage or lease, use an affordability calculator to gauge what you can realistically contribute toward housing expenses each month.

    Which expenses pose the greatest challenge to your dreams of financial security? Share your thoughts in our Forums. It's a place where you can swap questions and answers on money-related matters, life hacks and ingenious ways to save.

    Like this article? Sign up for our newsletter and we'll send you a regular digest of our newest stories, full of money saving tips and advice, free!

     

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    Toy US $1 dollar notes 'growing' in plant pots.
    AlamyDesigned to accept and grow your funds, annuities reach a maturity point, called annuitization, when they begin to pay a series of payments to the individual.
    By Lou Carlozo

    Perhaps you've noticed that the word "annuity" sounds similar to "ennui." Or you've been alarmed about the reputation surrounding certain types of annuities. Or you've tried to make sense of these products and felt all the thrill of staring into a bottomless bowl of cold oatmeal.

    Misunderstood at best and reviled at worst, annuities rank as the Rodney Dangerfield of investments: no respect at all. Yet experts say that annuities -- already setting sales records -- could well innovate in the coming years, provided that the same high-tech changes shaking conventional investments make it to this sector.

    The annuity sales model is currently like the old-line travel agencies.

    "The annuity sales model is currently like the old-line travel agencies," says Stan Haithcock, an annuities expert and salesman based in Ponte Vedra Beach, Florida. "Now we book our travel all online, and life insurance has made that leap where it's all sold online. We're going to see that same change in annuities."

    Haithcock sees consumers taking charge of what is now a business driven by salespeople -- often aggressive ones -- who hawk certain annuities to score a high commission. "I predict the change will happen in the next five years," he says. "By 2020, we're going to see people able to buy annuities direct."

    If so, an opportunity awaits some high-tech annuities gurus, as sales figures suggest that annuities are indeed here to stay. According to a recent survey by the Connecticut-based Life Insurance and Market Research Association, sales reached $235.8 billion in 2014, with record annual numbers in indexed and income annuities. Still, that doesn't take into account one threat: the bad reputation variable and indexed annuities have earned.

    Variable annuities, which are tax-deferred and invest your funds, come loaded with costs. These include large, upfront sales commissions, surrender fees for the first withdrawals, account administration fees and insurance company charges over time. Indexed annuities have likewise come under fire for their high costs and complex terms.

    "Some consider annuities to be bad because they have surrender charges for early withdrawal," says Jim Poolman, executive director of the Indexed Annuity Leadership Council. "However, annuities are a long-term product, so the surrender charge shouldn't be a deterrent for someone looking to save for the future."

    Hard to Explain

    Yet annuities are a tough financial category to explain in detail. Sold by insurance agents, annuities are designed to accept and grow your funds, and then pay out once they reach a maturity point, called annuitization. But investors' eyes often glaze over when agents try to explain the many kinds -- 15, to be precise.

    Even a blog starring a goofy cartoon duck, Earl E. Bird, doesn't seem to be changing the reputation of annuities much. Whimsical as they may appear, webbed feet can only go so far in tackling a tangled financial web.

    But they do have a fascinating history that dates to the Roman emperor Tiberius. The term comes from the Latin word annua, and the Roman government created annuities in 13 B.C. as lifetime pension plans for soldiers and their families. When soldiers went off to war for years, annuities guaranteed they'd be taken care of. In modern times, Andrew Carnegie started the first company that sold annuities, and it's still around today: TIAA-CREF Financial Services, based in Charlotte, North Carolina.

    Fast-forward to 2015, when annuities could regain some of their luster and a more solid reputation, thanks to the Qualified Longevity Annuity Contract. Established by the Internal Revenue Service in 2014, it sets new guidelines for investors to create annuity-based pensions.

    "I think QLACs are great," says Clarence Kehoe, chairman of the tax department at Anchin, Block & Anchin in New York. "It was a very creative suggestion by the government to assist retirees and provide them with some retirement security for the future by keeping them from running out of money." That is, as long as a person lives, the annuity payouts keep coming.

    But a QLAC does come with a cap -- 25 percent of your total IRA-type assets into these annuities, or $125,000, whichever is less. "These contracts do provide some form of protection against running out of funds in retirement," says Mark Edwards, a tax attorney with Gardere Wynne Sewell in Dallas. "But [a QLAC] generally would not substitute for defined benefit pension programs that used to be widely maintained by employers."

    Regardless, Haithcock points out that it will be virtually impossible for salespeople to game QLAC. Because variable and indexed annuities don't qualify, "they can't juice the numbers, they can't overhype it and you can explain it to a 6-year-old," he says. "The government sets the guidelines."

    Haithcock is on a one-man mission to out the shady practices that have dogged the annuities industry, while acting as a self-styled consumer advocate. He's not your typical annuities salesman, to be sure: He wears a T-shirt that says "I [heart] ANNUITY HATERS" and professes love for death-metal music by the likes of King Diamond and Lamb of God.

    Further, it might seem strange that an annuity salesman would get excited about online platforms that would eat into the turf of people in his line of work. But he sees that as step toward wiping out the bad apples of annuities.

    "Whenever you have that kind of online sales model, you get a guy like Jeff Bezos who takes an Amazon approach and says, 'I'm going to sell annuities direct,'" Haithcock says. "In fact, it surprises me that Bezos hasn't done it already."

     

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  • 07/30/15--22:00: What to Buy in August
  • Filed under: , , , ,

    A&W Root Beer - Atlantic City, Wyoming
    m01229/Flickr
    By Raechel Conover

    August is all about back-to-school deals. Even frugal shoppers without school-age kids know they can find big discounts this month on items such as laptop bundles and home office supplies. This is also the beginning of the end of summer, so August bargains include seasonal products. If your lawn mower has mowed its last, for example, add a new one to your list and buy it now. Cheapism.com identified a variety of items you'll find at cut-rate prices this month.

    School Supplies. Almost any school supply you can think of will be discounted or promoted with a coupon in the coming weeks. Look for August deals on common items such as paper, notebooks, pens, pencils, glue, rulers, calculators, folders, and binders. Now's the time for small business owners or anyone with a home office to stock up, as well. Even items such as chairs, desks, and filing cabinets will be discounted, so take advantage. Backpacks should be included in the mix. Look for deep discounts, coupons from major retailers, and even doorbuster sales to get unbeatable buys on backpacks.

    Kids' Clothes. This is the perfect time to jump-start your kids' fall wardrobes. Check out our buying guide to cheap kids clothes for the low-down on the retailers with the best prices on quality apparel.

    Dorm Decor. The back-to-school rush is hardly limited to grade school and high school. College campuses are gearing up to usher in a new crop of freshmen. If you have a college-bound student at home, look now for discounts on dorm essentials and decor sold by retailers such as Walmart, Target, and the local dollar store. Even if no one in your family is near college age, take advantage of August deals on storage containers, linens, and other items for the home.

    Laptops. In addition to all the typical supplies, a new laptop is on many college students' shopping lists. Most laptops will be on sale this month and many retailers will be offering discounted bundle packages that will be hard to ignore. And don't forget, these savings can benefit anyone, not just college-bound students. Cheapism's guide to cheap laptops includes a rundown of features to look for.

    Summer Gear. Beyond the back-to-school sales, consumers will see August deals on summer merchandise as vendors look to clear the racks for fall inventory. This is the best time and probably your last chance until next summer to buy a truly cheap swimsuit. If you have young ones at home, buy that kiddie pool now for next year. Outdoor grills will also be deeply discounted this month.

    Lawn Mowers. Homeowners in most parts of the country won't need lawn mowers for much longer, so watch for retailers to mark them down. Gardening tools and other landscaping implements, such as tillers and weed eaters, also go on sale this month. On the other hand, outdoor furniture and decorative yard items are more likely to display greater price cuts (think up to 90 percent off) in September and October.

    Camping Gear. Camping is a popular summer activity, but with the end of summer drawing near many retailers will begin to discount this year's tents, sleeping bags, cooking stoves, and the like. Snag the August discounts and you might have just enough time to fit in one last camping trip before school starts.

    Luggage. By August most people have already finished their summer travels and are setting their sights on fall getaways and holiday travel. The lull makes this month a good time to buy new luggage to replace that ancient piece held together with duct tape.

    Seasonal Produce. The late summer harvest yields fruits such as apricots, blueberries, grapes, mangos, melons, nectarines, kiwi, peaches, plums, raspberries, strawberries, and watermelon, all of which will be ripe and cheap. Readily available vegetables include corn, cucumbers, bell peppers, beets, eggplant, green beans, green onions, lettuce, okra, radishes, summer squash, and tomatoes.

    Root Beer Floats and Supplies. National Root Beer Float Day surfaces on Aug. 6. In past years A&W Restaurants have celebrated by offering a free root beer float to customers. We anticipate the same will be true this year. In addition, those root beer float supplies in the aisles of your local grocery store may see sales leading up to this sweet food holiday.

     

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    NY Premiere Of
    Evan Agostini/Invision/AP
    By Andrea N. Browne

    As a repeat entrepreneur, Mark Cuban knows a thing or two about how to start a business from the ground up. His first company, MicroSolutions, a software distributor, grew to $30 million in revenue before he sold it in 1990. Nine years later, he sold his next business, Broadcast.com, an Internet broadcast company, to Yahoo for a reported $5.7 billion in Yahoo stock.

    In 2000, Cuban bought a majority stake in the NBA's Dallas Mavericks franchise. Along with business partner Todd Wagner, Cuban also co-owns the Landmark Theatres cinema chain, the film distribution company Magnolia Pictures, and the cable television network AXS TV. His estimated net worth is $3 billion, according to Forbes.

    Kiplinger asked Cuban about his professional journey, what small business owners need to do to succeed, and his strategies for maintaining wealth amid a changing economic environment. Here's an edited excerpt from our interview:

    What's one piece of advice you'd give to a budding entrepreneur?

    Be prepared. Know your business, your industry and your product better than anyone else. You'll have competition. They're not just going to hand over their business to you. Your new company has to have a compelling reason for people to want to do business with you instead of [the competition].
    Advertisement

    Looking back at your professional journey, when did you realize you were on the path to becoming wealthy?

    After the money was in the bank -- I never took anything for granted. I've had businesses that have failed, so I knew that at any moment things could go wrong. I never thought "I made it" until after I made it.

    What's the biggest risk you took?

    I was never a big risk taker. When I started my first businesses, I really had nothing to lose. I was sleeping on the floor. I had five roommates in a three-bedroom apartment. My car was a junker. I had absolutely nothing to lose when I started MicroSolutions, so it really was never a risk.

    Today, I don't step out of my comfort zone. I work hard to be prepared and know my business and industry first. If I'm not comfortable with it, why would I do it? I'm not saying take a year. But I do believe you go all in to learn as quickly as you can. When you're prepared and have nothing to lose, you can go, go, go.

    What are you doing to make your wealth last, other than invest in new ventures on Shark Tank?

    I make sure I understand the markets and the risk factors. I try to look for things that could create another Great Recession. [Those include] high-frequency trading; the flash cash is one example. I look at student-loan debt, and I am exploring what happens when universities start losing students or have to cut back tuition. I pay attention to what the central banks around the world are doing. I worry about whether our markets can be disrupted by a cyberattack or massive spoofing attack. Because there are so many unknowns, I have a significant portion of my portfolio hedged.

    Unfortunately, the stock market and many other financial-instrument markets have become platforms for hackers. The days of individual buyers being the greatest impact on the market are long gone.

    What are the key factors that make a Shark Tank pitch a winner to you?

    It has to be something that's compelling. It has to be obvious why people would pay money for it. It has to be something that can scale to be big enough to more than return my money, and then some. It has to have someone who is willing to put it all on the line and work hard. The person has to be willing and excited to sell to as many people as possible.

    What are the show-stoppers that turn off your interest immediately?

    People who aren't self-aware. They think they're the best and that they have the best company when it's obvious they have no idea how wrong they are. You have to be able to know how others see you. You have to be brutally honest about your strengths and faults. If you can't be honest with yourself, it's going to be very difficult to know what it will take to be successful.

    If you were starting out today, which industry would you choose to enter into?

    I created a product called CyberDust.com. It's an ephemeral messaging and communications platform that has been a springboard for networking and learning from influencers and experts. So I guess privacy and communications [would be the industries].

    What about those fields attracts you most?

    In a lot of respects, we're the product online. Our digital footprint tells the world who we are. The minute you hit "send" on a text or an e-mail, you no longer own that message. The person you send it to does. That's an incredible amount of risk. I used Cyber Dust to negotiate my Shark Tank deal with Sony, which owns the show. I had no idea they were being hacked at the time and neither did they. My negotiations never came out and all was safe. We saw what happened to their e-mail.

    That will be the risk all companies and individuals face. Everything we do digitally is valuable to someone, and you can bet they'll try to get what you have. I'm not saying everyone will get hacked, but every company you do business with is at risk. What we've seen with credit cards isn't going to stop.

    How do you give back to the community?

    I try to find leverage points. Sure, I give to charities and those in need. But for me, I try to help people create and grow their companies, and build a future for people. The hope is that they can become self-sustaining and grow to be a pillar of their community. That's what I love to do and think has the most impact.

     

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    Brady Suspension
    APNew England Patriots quarterback Tom Brady
    There were plenty of winners and losers this week, with the leading smartphone maker winning over a welcome yet controversial convert and a popular European theme park possibly discriminating on pricing.

    The iPhone -- Winner

    You may not think that there are any winners in the NFL's "Deflategate" scandal. The Patriots and star quarterback Tom Brady have had their reputations tarnished by allegations that the team deflated its footballs. The NFL and its fans have seen the integrity of the game diminished. However, Apple's (AAPL) iconic iPhone became an unlikely winner this week.

    Reports that the NFL was upholding its four-game suspension was accompanied by an interesting nugget: Brady destroyed his Samsung the day of his meeting with the NFL, switching to Apple's iPhone.

    It's hard to pin a price on what this does for Apple's rep, but at least one group -- Apex Marketing Group --- claims that it added $733,000 to the iPhone's brand.

    Disneyland Paris -- Loser

    Europe's only Disney-branded theme park came under fire after consumer complaints surfaced, alleging that the park is charging German and British tourists more for vacation packages than it does for French visitors.

    Many theme parks offer deals to locals, but there's more to this than that here. The European Commission and French authorities are investigating the claims because the European Union has single-market pricing in place, making this potentially illegal. Disney (DIS) owns just a minority stake in Disneyland Paris, but the story is going to make it hard for non-French Europeans to warm back up to the Disney brand.

    Sirius XM Radio (SIRI) -- Winner

    Satellite radio is as popular as ever. Sirius XM announced fresh financials Tuesday, revealing that it had a record 28.4 million subscribers. That is 519,000 more accounts than it had three months earlier and 2.1 million more than it had a year earlier.

    Sirius XM is doing well, and it boosted its guidance for all of 2015 following the strong report. There has always been the prevailing fear that cheaper smartphone apps and Bluetooth-enabled cars will eat into Sirius XM's popularity, but that's just not happening.

    FireEye (FEYE) -- Loser

    A strong quarter is no match for a defecting executive. FireEye came through with a blowout quarter that exceeded expectations, providing guidance that will force analysts to boost their targets. However, shares of the cloud-based network security specialist still initially slipped because its CFO resigned.

    That's just the way the market works. You can impress with solid financials, but when your top bean counter bolts, folks get nervous.

    Groupon (GRPN) -- Winner

    The leading deals-buying website operator is making a move into takeout and delivery. Groupon officially launched Groupon To Go in its home base of Chicago. There are plenty of food delivery services out there, but Groupon is mixing things up by working with eateries willing to shave at least 10 percent off the orders.

    That should be a pretty compelling hook if it's able to line up enough willing chains, and that's where Groupon's thick Rolodex should come in handy as it relies on its growing list of merchants. It also can only help that it has a huge user base who are always on the lookout for local deals.

    Motley Fool contributor Rick Munarriz owns shares of Walt Disney. The Motley Fool recommends Apple, FireEye, and Walt Disney. The Motley Fool owns shares of Apple and Walt Disney. Try any of our Foolish newsletter services free for 30 days. Looking for a winner for your portfolio? Check out The Motley Fool's one great stock to buy for 2015 and beyond.

     

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    In today's complex world of tax treatment on investments, annuities are anything but transparent. Taxes can vary depending on what investment vehicle is purchased and how it's structured-not all are treated equally. There are some guidelines which can help alleviate the complexity of understanding how annuities are taxed. Additionally, we always recommend seeking advice from a tax professional when making tax related decisions.

    Annuities can be purchased in both qualified and non-qualified investment accounts. Qualified accounts such as Traditional or Roth Individual Retirement Accounts (IRA), Simplified Employee Pensions (SEP) or Defined Benefit Plans like a 401(k) are tax-deferred and typically come with an age restriction for penalty-free withdrawals. Depending on the type of retirement account the annuity is purchased in and other considerations, funds withdrawn before 59.5 or earlier can have a 10% penalty in addition to any taxes owed. Non-qualified accounts such as savings, money market, and inheritance accounts are not tax-deferred, funded instead from after -tax income resulting in only interest or capital gains being taxed. However, variable annuities are unique as they provide tax-deferred benefits within non-qualified accounts. The Financial Industry Regulatory Authority (FINRA) says holding a deferred annuity within a traditional IRA provides no additional tax advantage[i]-yet in recent years the majority of variable annuity assets have been held in qualified retirement plans[ii], which demonstrates the complexity of the product and the misunderstanding many investors may have with it. FINRA recommends most investors take maximum advantage of all other available tax-advantaged accounts before considering annuity products [i]-we agree.

    More: Download Annuity Insights: Nine Questions Every Annuity Investor Should Ask

    Another often overlooked disadvantage of annuities is the tax rate payable on earnings. While equities held for over a year can get a preferable capital gains tax rate on price appreciation depending on taxable income, as well as a less favorable ordinary rate on dividends, annuities are taxed entirely at the typically higher ordinary income rate. If an investor's income tax rate is higher than the long-term capital gains tax rate, an annuity may not be advantageous from a tax standpoint. If investors have a large income stream outside of their annuity, this could leave them potentially paying higher tax rates throughout their retirement-when their income payments matter most. Moreover, annuities don't receive a step-up in cost basis on the death benefit value-potentially leaving estates or heirs with a large tax bill. This is not the case with inherited equities in taxable accounts-the cost basis is readjusted to market value at the time of the decedent's passing. Lastly, like other investment losses, annuity losses may be tax deductible; However, the appropriate method for doing so has not been clarified by the Internal Revenue Service (IRS)-another reason we recommend you consult a tax advisor.

    Annuitization can affect the taxes paid on the contract. If annuitized, withdrawals will generally consist of both principal and earnings amounts, keeping taxable income (on earnings only) more manageable. However, if distributions are made without annuitization, gains are withdrawn first-leaving an investor with more taxable income and a higher tax bill in the early years of withdrawal period.

    Once purchased, investors can continue to defer taxes through a 1035 Exchange (replacing one annuity with another). This option can also leave investors with another costly problem-a new surrender penalty period of up to 10 years before penalty free withdrawals can be taken.

    Understanding tax implications is one important element in helping to achieve financial goals in retirement. Failing to plan ahead can prove costly. In our view, learning the relative strengths and weaknesses between various investment products can make the difference between a happy, healthy retirement-and taxes are an integral piece the puzzle.

    If you have a $500,000 portfolio and own an annuity, you have a lot at stake. Make sure you understand the details by downloading Annuity Insights: Nine Questions Every Annuity Investor Should Ask by Forbes columnist Ken Fisher's firm. This guide is designed to help you better understand these investments. Act now! Click Here to Download!

    [i] Source: Financial Industry Regulatory Authority, Inc., Variable Annuities: Beyond the Hard Sell (FINRA, 8/31/2009).
    [ii] Source: Insured Retirement Institute (IRI) Factbook 2015, 14th Edition, page 153, Figure 13-10.

     

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    Employment Cost
    J. Scott Applewhite/APA worker rolls out dough as she constructs pastries in the bay window at Ted's Bulletin, a Capitol Hill restaurant in Washington, D.C.
    By Lucia Mutikani

    U.S. labor costs in the second quarter recorded their smallest increase in 33 years amid tepid gains in the private sector, but it likely was a temporary setback against the backdrop of diminishing labor market slack.

    The unexpectedly smaller rise reported Friday by the Labor Department probably won't dampen speculation that the Federal Reserve is set to raise interest rates later this year. The U.S. labor market is fast approaching full employment.

    This data has periodically proved to be very lumpy and the sharp deceleration is inconsistent with other measures of wage inflation that are trending higher, not falling off a cliff.

    The Employment Cost Index, the broadest measure of labor costs, edged up 0.2 percent, the Labor Department said. That was the smallest gain since the series started in the second quarter of 1982 and followed a 0.7 percent rise in the first quarter.

    "This data has periodically proved to be very lumpy and the sharp deceleration is inconsistent with other measures of wage inflation that are trending higher, not falling off a cliff," said Eric Green, chief economist at TD Securities in New York.

    Economists polled by Reuters had forecast the employment cost index, which is widely viewed by policymakers and economists as one of the better measures of labor market slack, rising 0.6 percent in the second quarter.

    U.S. stock futures rose slightly after the data, while prices for U.S. Treasuries traded higher. The dollar fell against a basket of currencies.

    The deceleration in labor costs likely does not suggest a material slowing in wage growth, as commissions inflated worker compensation at the start of the year. Labor market slack has diminished significantly over the last few years, which is expected to start putting upward pressure on wages.

    "This is precisely how the Fed will interpret this report, even if the numbers here are atrocious. The broader trends are still unquestionably favorable," Green said.

    At 5.3 percent, the unemployment rate is close to the 5 percent to 5.2 percent range that most Fed officials consider consistent with full employment. The ECI is also considered a better predictor of core inflation.

    Wages and salaries, which account for 70 percent of employment costs, rose 0.2 percent in the second quarter, also the smallest increase on record. They had increased 0.7 percent in the first quarter.

    Private sector wages and salaries were up 0.2 percent after gaining 0.7 percent in the prior quarter. Overall private sector compensation failed to rise for the first time on record.

    Compensation in the services sector nudged up 0.1 percent in the second quarter after rising 0.6 percent in the prior period. Compensation in the goods producing sector rose a solid 0.7 percent after increasing 0.5 percent in the first quarter.

    In the 12 months through June, labor costs rose 2 percent, the smallest 12-month increase since last year and further below the 3 percent threshold that economists say is needed to bring inflation closer to the Fed's 2 percent medium-term target.

     

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    Medicare Turns 50
    APIn this photo from July 30, 1965, President Lyndon Johnson signs the Medicare Bill into law while former President Harry S. Truman, right, observes during a ceremony at the Truman Library in Independence, Mo.
    By Emily Brandon

    It has been 50 years since President Lyndon Johnson signed a health insurance program for older Americans into law on July 30, 1965. Medicare continues to provide the majority of America's seniors with affordable health insurance, and many additional benefits have been added to the program. Here's how Medicare has changed over 50 years.

    Premium prices. Former President Harry Truman was the first American to sign up for Medicare. He paid $3 a month for this health insurance, which was deducted from his Social Security checks. The standard Medicare Part B premium has grown to $104.90 in 2015, and the practice of deducting the premiums from Social Security payments continues. "If you don't sign up for Medicare when you turn 65 your premium will go up," says Joseph Matthews, an attorney and author of "Social Security, Medicare & Government Pensions: Get the Most Out of Your Retirement & Medical Benefits." "There's a penalty you will pay if you don't sign up when you are 65 unless you have employer sponsored health insurance."

    Tax rate. Beginning in 1966, workers paid 0.35 percent of their earnings into the Medicare system, and it was raised to 0.5 percent the following year. Employers pay a matching amount. The Medicare tax hit 1 percent beginning in 1973. The current tax rate of 1.45 percent has been in effect since 1986, and self-employed workers pay 2.9 percent of their earned income into the trust fund. Beginning in 2013, high income workers were taxed an additional 0.9 percent on earned income exceeding $200,000 for individuals and $250,000 for couples.

    Prescription drugs. The original Medicare program did not include coverage of medications. Medicare Part D prescription drug coverage was signed into law in December 2003 by President George W. Bush, and retirees began to sign up for these Medicare-approved private prescription drug plans in 2006. "Medicare has changed for the better in several ways," says Jack Hoadley, a health policy analyst at Georgetown University. "[One] is the addition of benefits not included in the 1965 law, especially prescription drugs and preventive services." Seniors must compare prices and coverage among dozens of plans in their area and choose the one that best meets their needs. They can switch plans once a year during the open enrollment period from October 15 to December 7.

    Preventative care. The Affordable Care Act, signed by President Obama in 2010, added a variety of free preventive care services to Medicare, including mammograms and colonoscopies, as well as a free annual wellness visit to a doctor. The law has also begun to phase out a large coverage gap in Medicare Part D plans and increased Part D premiums for higher income beneficiaries.

    Coordination with Social Security. For people born in 1937 or earlier, 65 was the age you could claim unreduced Social Security payments and sign up for Medicare, but these two benefits have since diverged. While the age you can start Medicare coverage remains 65, the age when workers qualify for their full Social Security payments has been increased to 66 for most baby boomers and 67 for everyone born in 1960 or later. "You don't have to be receiving Social Security to sign up for Medicare," says Ronald Kahan, a medical doctor and author of "Medicare Demystified: A Physician Helps Save You Time, Money, and Frustration." "The two have nothing to do with each other." Signing up for Social Security at the same time you sign up for Medicare now results in a 7 percent smaller monthly payment for baby boomers and a 13.3 percent smaller benefit for people born in 1960 or later.

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

     

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    Boom Goes Bust: Texas Oil Industry Hurt By Plunging Oil Prices
    Spencer Platt/Getty ImagesAn oil refinery in Big Springs, Texas. As crude oil prices have fallen globally, many American communities that became dependent on oil revenue are preparing for hard times.
    By JONATHAN FAHEY

    NEW YORK -- As drivers, shippers and airlines continue to enjoy lower fuel prices, the oil industry is responding to much lower profits with sharp cuts in spending and employment that are hurting economic growth.

    Low oil and gas prices are good for the overall economy because they reduce costs for consumers and business. U.S. economic growth was higher in the second quarter, and economists say that was partly fueled by consumers spending some of their savings on gasoline at stores and restaurants.

    But with oil prices down around 50 percent from last year, major oil companies are cutting back, offsetting some of this good news. For instance, Exxon Mobil (XOM) said Friday it cut spending by $1.54 billion in the second quarter, while Chevron (CVX) announced it is laying off 1,500 workers. Until about six months ago, booming U.S. oil and gas production was helping the country's economy grow during a time of economic sluggishness.

    David Kelly, chief global strategist at J.P. Morgan Asset Management, said this week that a $29 billion decline in oil exploration and mining activity in the U.S. cut economic growth by 0.7 percent in the second quarter, a sizable chunk for an economy that grew 2.3 percent.

    Investors also feel the pain. Lower oil profits have an outsized effect on stock markets because the companies are so enormous. Analysts at RBC Capital Markets wrote that when oil prices drop by 10 percent, earnings for the overall S&P 500 fall by 1 percent.

    Industry layoffs seem to be accelerating. Royal Dutch Shell (RDS-A), while announcing Thursday that profits fell 25 percent in the second quarter, said it would cut its global workforce by 6,500. Chevron's quarterly profit fell 90 percent and CEO John Watson said the company is reducing its workforce "to reflect lower activity levels going forward."

    Layoffs at three of the big oil and gas service companies are near 60,000 after two of them, Halliburton and Baker Hughes, revealed further layoffs in quarterly filings last week.

    BP CFO Brian Gilvary told investors Thursday that the company has been cutting workers "and I think you'll see more of that before we get to the end of the year." BP's oil and gas profit dropped 64 percent from April through June.

    Exxon Mobil's profit fell by half, to its lowest level since the recession of 2009, the company said Friday. Its operations in the U.S. -- the center of the global oil and gas boom -- posted its second straight quarterly loss.

    "The surprise really was here in the U.S.," said Brian Youngberg, an analyst at Edward Jones.

    Shares of Exxon and Chevron, both components of the 20-member Dow Jones Industrial Average, fell 4 percent Friday after they announced results.

    The companies are in some ways victims of their own success. A surge in oil and gas production brought on by technological advances and high prices in recent years has flooded the market, sending global prices sharply lower.

    Global Factors

    But geopolitical forces have also increased the pressure on prices. Iranian oil is poised to return the world market after years of sanctions, the Greek debt crisis is reducing economic growth in Europe and a shake-up in Chinese financial markets is reducing demand growth in the world's second largest oil consumer.

    After nearly four years near $100 a barrel, the price of oil began slumping a year ago, falling to $43 by March. It surged briefly all the way to $61 in June, but then fell again. Oil traded just above $47 a barrel on Friday.

    That has translated to sharply lower fuel prices. The U.S. average retail price of gasoline through the first half of the year was 30 percent lower than during the same period last year. On Friday the national average was $2.67 a gallon, 85 cents lower than last year at this time, according to AAA.

    Retail prices for diesel and heating oil have averaged 27 percent lower than last year, and airlines have posted some of their highest profits in years thanks to lower jet fuel prices.

    These low prices, along with the pain for the oil industry and pleasure for consumers, are likely to continue for a while, analysts say. There is plenty of oil in storage tanks and the global oil industry has the capacity to produce more if demand picks up.

    In a report Friday, IHS Energy analysts predict further declines in oil prices. IHS says oil will have to fall into the low $40 range and stay there for "several months" before U.S. production growth slows and the supply glut eases.

    "It's not good news for producers," said IHS Chief Economist Nariman Behravesh. "It's very good news for U.S. households and consumers."

     

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    Markets React To Fed Interest Rate Announcement
    Spencer Platt/Getty Images
    By Noel Randewich

    NEW YORK -- Wall Street ended on a sour note Friday as a drop in energy stocks eclipsed wage data that supported expectations that the U.S. Federal Reserve might hold off on an interest rate.

    Exxon Mobil (XOM) shares dropped 4.6 percent while Chevron (CVX) lost 4.9 percent after reporting poor quarterly earnings due to weak oil prices.

    The drop in those stocks, as well as additional declines in crude prices amid oversupply concerns, contributed to a 2.6 percent decline in the energy index, its deepest one-day drop since January.

    "It's all about rotation [between sectors]. That's what this market has been about since we've been in such a tight trading range this year," said Dennis Dick, head of markets structure and a proprietary trader at Bright Trading in Las Vegas.

    The magnitude of the miss was definitely a bit of a surprise, especially as people were really gearing up for a September hike.

    Initially helping share prices, labor costs in the second quarter recorded their smallest increase in 33 years, with the Employment Cost Index edging up a less-than-expected 0.2 percent.

    "The magnitude of the miss was definitely a bit of a surprise, especially as people were really gearing up for a September hike. This definitely puts a lower probability on that," said Stanley Sun, interest rate strategist at Nomura Securities International in New York.

    Earlier in the week, many investors considered positive comments by the Fed about the economy as a signal that a rate rise could come as early as September.

    The Dow Jones industrial average (^DJI) ended down 0.3 percent at 17,690.46. The Standard & Poor's 500 index (^GSPC) finished 0.2 percent lower at 2,103.92 after opening with a gain. The Nasdaq composite (^IXIC) was virtually unchanged at 5,128.28.

    More stocks rose than fell in the S&P and Nasdaq.

    Gains For the Week, Month

    For the week, the Dow rose 0.7 percent, the S&P added 1.2 percent and the Nasdaq gained 0.8 percent. For July, gains for the Dow, S&P and Nasdaq were 0.4 percent, 2 percent and 2.8 percent, respectively.

    Despite the S&P's negative close Friday, half of the 10 major S&P 500 sectors were higher, with the utilities index's 1 percent rise leading the advancers.

    Stocks are a tad expensive and valuations will be a concern if earnings don't continue to grow in the second half of the year, said Steve Freedman, senior investment strategist at UBS Wealth Management.

    With more than half of the S&P 500 companies having reported their second-quarter results, analysts expect overall earnings to edge up 0.9 percent and revenue to decline 3.3 percent, according to Thomson Reuters (TRI) data.

    Coca-Cola Enterprises (CCE) jumped 12.41 percent after The Wall Street Journal reported that the independent Coca-Cola bottling company is in merger talks with two European bottlers.

    LinkedIn (LNKD) slumped 10.52 percent after the social network's second-quarter results failed to connect with investors.

    Advancing issues outnumbered declining ones on the NYSE by 1.72 to 1. On the Nasdaq, winners beat losers by 1.33 to 1. The S&P index posted 40 new 52-week highs and 8 new lows; the Nasdaq composite saw 100 new highs and 82 new lows. Some 6.8 billion shares changed hands on U.S. exchanges, just above the daily average of 6.7 billion this month, according to BATS Global Markets.

    -Tanya Agrawal contributed reporting.

    What to watch Monday:
    • The Commerce Department releases personal income and spending data for June at 8:30 a.m. Eastern time.
    • At 10 a.m., the Institute for Supply Management releases its manufacturing index for July, and the Commerce Department releases construction spending for June.
    Earnings Season
    These selected companies are scheduled to release quarterly financial results:
    • Allstate (ALL)
    • American International Group (AIG)
    • Brookdale Senior Living (BKD)
    • Clorox (CLX)
    • CNA Financial (CNA)
    • HSBC (HSBC)
    • Loews Corp. (L)
    • Tenet Healthcare (THC)
    • Tyson Foods (TSN)

     

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    Tensed mature woman sitting in bed with man in background
    AlamyEarly retirement can become boring if all your friends and relatives are still working.
    By David Ning

    Early retirement is a long-term goal that requires discipline and perseverance. But hitting a desired number in your retirement accounts doesn't mean you are ready to walk away from your job. If you focus only on the finances you might end up surprised when retirement isn't what you thought it would be. Here are a few reasons not to retire just yet, even if you have saved enough to quit the rat race early.

    You don't know what you will do after you quit. If you don't have a plan for how you will fill your days, it's very easy to become bored. Without a job or social activities to draw you out of the house, you may find yourself sitting around, watching TV and gaining weight. Many of your friends will be busy during most weekdays, so you probably won't be able to pick up the phone and call all your pals to hang out mid-day. It's better to enter retirement with a list of things to do. The good news is that coming up with ideas for things to do in retirement is actually quite fun.

    You work in a job you hate. If you dislike your job, you may start thinking about early retirement as an escape. But the solution to an uncomfortable work situation is actually a different job, rather than quitting all together. Working in an enjoyable environment is actually better than not working, because you are spending time socializing and feeling productive while receiving income. If you hate your work, then definitely try another career that's more enjoyable before you consider retiring for good. You may find something more worthwhile than retiring early.

    You haven't figured out your retirement budget. If you just picked a retirement savings goal that sounded nice, then you aren't ready to retire yet. You may very well have enough money to quit working, but you definitely want to be sure by estimating what your retirement expenses will be once you no longer work. Financial surprises should be expected, so don't blindly give up a steady paycheck just because you read a rule of thumb online about how much the average person needs to spend in retirement.

    You just hit your net worth goal. This major financial milestone is a worthy achievement. But you should double check if the retirement number you may have chosen years ago still makes sense. Perhaps you forgot to factor in inflation when you first dreamt up the number. You also don't want to quit the second your retirement number shows up on your computer screen. If you are invested in the stock market, the value of your assets fluctuates constantly, and you need to make sure you have enough of a cushion to weather the volatility. While it likely took incredible discipline to meet this long-term goal, take a bit more time to make sure that money is likely to be enough to last for the rest of your life.

    You haven't sat down with your family to discuss the move. Talk with your loved ones at length about your intention to quit before you make this big life change. Find out how your family feels about you staying home all day. Family members still dependent on your income might be affected by the change. You've worked hard all your life and deserve to retire when your finances fall into place, but you still want to make sure your closest family members are comfortable throughout the transition. Make sure everyone understands that they won't need to worry about a drastic downgrade in lifestyle just because you aren't getting a steady paycheck anymore. Share with them all the great changes that will happen around the house now that you are going to be around more. The more open and positive you can be about life after retirement, the better everyone will feel about your decision. Their participation in the change will make the retirement transition easier for you.

    Early retirement can be a wonderful experience, but it doesn't mean quitting just because a retirement calculator says you are ready. Your life is much more than dollars in a retirement account. Treat the decision to retire with the respect it deserves.

    David Ning is the founder of MoneyNing.com.

     

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    Collection of Visa and Mastercard credit cards
    Craig McBeath/Alamy
    By Lisa Gerstner

    Devotees of rewards credit cards, take note: You may not be getting your full allotment of points for purchases made through third parties. Such transactions, which may include those made through mobile wallets, payment services such as PayPal (PYPL), mobile card readers, and sites such as Groupon (GRPN) and Expedia (EXPE), aren't necessarily eligible for the extra points or cash-back awards on purchases in bonus categories (the 3 or 5 percent you might get on gas or groceries, for example, when you get a lesser percentage on everything else).

    The reason? Merchant codes that card issuers use to classify purchases don't always transfer. Apple Pay transactions should earn full rewards because of Apple Pay's direct relationships with banks and card issuers, says Kari Luckett, content director for CompareCards.com. It remains to be seen whether Android Pay, a mobile tool replacing Google Wallet for in-store payments, will deliver full rewards.

    Check the rewards breakdown on your statements to make sure you're getting what you're due. If you've been shortchanged, ask the issuer whether it will supply the extra rewards.

     

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    Family Having Fun On Beach
    Getty Images
    Summer is a popular time to travel. Kids are out of school, making it an ideal time to be a tourist. Many seasonal attractions are only open during this peak travel season. You don't have to be a Griswold to enjoy an unforgettable vacation, but do you know how much it's really costing you?

    Before breaking hearts by introducing the concept of compounding math on the costs of typical getaways this summer, I may as well begin with the obvious disclaimer. Some of the best memories that you will ever make will take place during vacations. The opportunity to go out there and collect new experiences is theoretically priceless.

    Also, there are many tourist magnets that rely on a steady flow of out-of-towners to fuel the local economy. The last thing that I would want to do is write an article that discourages people from vacationing this summer, setting back the countless jobs and markets that rely on a steady flow of foreign visitors.

    However, that said, a lot of people may be spending more money than they realize this summer. The urgency of creating memories now could have implications later and it's a message that rarely gets told.

    Not-so-Bon Voyage

    The average price of a seven-day cruise is $2,358 for a couple, according to industry tracker Cruise Market Watch. Tack on shore excursions, spa treatments, alcoholic drinks and gratuities and the tab at the end of the sea journey will be substantially higher. Suddenly that $2,358 balloons up to $3,108.

    That's a lot of money. It's a couple of months of rent for most people. It's a ransom that could nab a decent secondhand car. However, what's the true cost of chasing midnight buffets in the Caribbean or getting pampered with a back rub in Maui?

    That's where the tragic magic of compounding kicks in. $3,108 is a lot of money now, but if it were invested in CDs, bonds, or other fixed-income investments generating annual returns of 4 percent over the next 10 years, we're talking about a little more than $4,600.

    Let's go more aggressive. Let's park that cash in a stock market index mutual fund that has historically returned closer to 10 percent. In a decade we would be looking at $8,061. In 20 years we're looking at $20,909.

    The returns are theoretical. There's naturally going to be volatility in chasing higher rates of return. However, the opportunity cost of taking that lavish vacation is real.

    The Road Not Taken

    We're talking about just a couple taking a cruise, but most of us have entire families that we take on the road. Those tabs can add up. The average vacation expense for a family of four last summer was $4,580, according to American Express (AXP). That's more than $30,800 after two decades of returning 10 percent a year.

    Let's aim smaller. You decide to stay closer to home to save money. You drive. You stay at bargain motels. Even a modest $1,500 getaway could top $10,000 after 20 years at 10 percent. Robert Frost talked about the road not traveled, but what about the vacation not taken?

    Let's close on an upbeat note, circling back to the joys of travel. A vacation is a treasure trove of memories and you only live once. You -- and your children, if you have any -- are only young once. Travel if you can, but don't live in regret for the getaways that got away.

    Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends American Express. Try any of our Foolish newsletter services free for 30 days. Check out The Motley Fool's one great stock to buy for 2015 and beyond.

     

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    a young man in suit shopping online with a credit card via a tablet computer
    Alamy
    NEW YORK -- Hardly a day goes by that you don't get offers for new credit in your mailbox. And while the offers can be attractive, with great perks, low introductory rates and free balance transfers, that doesn't mean that you should jump at every offer of a new credit card. You might not just be setting yourself up for increasing amounts of debt. You can also negatively impact your credit.

    Credit and Your Budget

    "One of the first things you need to think about is how this will impact your budget," says Gerri Detweiler, director of consumer education with Credit.com. Each new line of credit is a new monthly payment. "How much will that payment be and how long will it last?" While you might be able to afford an extra $350 for a car payment today, will you be able to afford it three years down the line?

    Detweiler points out that some changes in your financial situation are foreseeable. For example, you might know that you're retiring in two years or that your kids are going off to college. Or you might have an adjustable rate home equity loan that is going to go into full repayment. That's the kind of thing you need to anticipate and think about before you open up any new lines of credit.

    Detweiler says that you should always ask if it will take more than three years to pay back any outstanding debt. "Usually, you want to pay off your debts in three years and certainly no more than five," she says. If you can't pay back what you're borrowing in three to five years, you're probably taking on more debt than you can realistically handle. "I bought a new car last year," she says. "One of the things right in my mind is that my daughter is entering college in a few years. That's the kind of thing you need to think about when taking on new debt."

    Credit and Your Credit Report

    "Depending on the type of debt, new credit could help or it could hurt," says Detweiler. Credit card accounts and revolving lines of credit will have an impact on your debt usage ratio, the second biggest factor after payment history on your credit. So if you open up a new credit card account, your overall utilization ratio (the percentage of available credit that you're using) will go down, potentially giving you a bump in your credit score. On the other hand, if you open a new card and do a balance transfer of 80% of that available credit, you're probably going to take a hit.

    You also want to look at how many lines of credit you have open at any time. "Too many open lines of credit can paint a consumer as someone who relies upon borrowed money just to get by," says Randy Padawer, a consumer education specialist with LexingtonLaw. "A boat load of credit cards can damage your FICO score, even if you pay them all off every month and never max them out."

    Padawer says that there's no way of knowing precisely where that number is, but he says that most people will see a degradation in their credit score with five cards or more. "If you have ten or fifteen cards, you've probably damaged your credit," he says. It gets worse, because closing accounts can also damage your credit through a shortened credit history and a higher utilization ratio. The best thing to do is to combine cards that are offered through the same bank.

    "Remember that credit cards are just licenses to borrow money," says Padawer.

    He believes that people all too often confuse a new line of credit with more income. "People get a shiny new credit card with a $15,000 limit and spend it on things they've always wanted," he says. "It's a terrible mistake and it gets lots of people into a whole heap of financial trouble."

     

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    How to Waste Less Food and Money
    Getty ImagesReducing waste can start with organizing your fridge.
    By Jon Lal

    Do you ever find you're throwing away uneaten or rotten food every week? You're not alone; the government estimates food waste adds up to over $900 per household each year.

    Not only is it bad for the environment and wasteful, especially considering that many people around the world go hungry, but it's a hit on your wallet, as well. Summer can be an especially difficult time to avoid wasting food, as it's a season of abundant fresh vegetables and fruits, as well as generous CSA, or community supported agriculture, shares. Do yourself and the ecosystem a favor and employ a few of these easy tips to waste less food:

    Plan ahead. One hour of planning at the beginning of the week can save you time, energy and money in the long run. If you think of it as the same amount of time you watch a TV show, it's easier to realize how little time it takes to plan meals.

    Start by taking an inventory of your kitchen. Knowing exactly what you already have can help you avoid buying the same thing twice, which for perishables will almost certainly result in wasting food.

    Then, plan your meals for the week. Create a grocery list of items that you will need, as well as any staple groceries that you know you eat each week. You can even plan for a "leftovers" night at the end of the week where dinner is created with whatever is still in the fridge and pantry.

    Depending on your schedule, you may want to consider a few smaller trips to the store each week instead of bigger, less frequent shops. This lessens the chance that you will buy too much and end up wasting it.

    Check your storage. Make sure you understand where to store food. Certain fruits and vegetables need to be refrigerated, and others do better in a cool pantry or at room temperature. Print out a list and put it on your fridge for quick reference.

    As for inside the fridge, make sure to keep your vegetables and fruit separate, since they will spoil when stored together. Bring older food and leftovers to the front of the fridge instead of hiding them in the back where they won't get eaten in time. If you can easily see food, then you're less likely to forget about it and end up wasting it.

    For pantry items like cereal, crackers or cookies, try taking products out of boxes as soon as you buy them and store them in airtight containers instead. This will prolong shelf life and keep them from getting stale too soon.

    Understand expiration dates. Sometimes, it's obvious when food needs to be thrown away, whether that comes in the form of mold or a sour smell. But other times, food may seem fine yet the expiration date has already passed. So how do you know if it's safe to eat?

    "Use by" and "Best by" dates are recommended by the manufacturer, but you can also trust your own smell test. If your food is past this date slightly but still seems fine in smell and appearance, then it probably is. If you still have doubts, you can look up the specific item in a database online. There are many resources available.

    "Sell by" applies to perishable items, such as meat, poultry, seafood and milk. The date is used by stores to know how long they should have a product on the shelves. If you buy the product before the sell-by date expires, then you can still store it at home beyond that date. Again, consult an outside reference to see recommendations for storage times.

    When in doubt, freeze it. If you find yourself with too many fruits or vegetables that may spoil soon, freeze them. You can do countless things with them later on: Turn them into a stock or soup, create delicious smoothies, bake a quick bread or muffins (and freeze again for later) or chop them up for cooking in an omelet or frittata.

    I hope these suggestions can help you eat and enjoy much more delicious and nutritious food while minimizing the amount that gets tossed in the trash.

    Jon Lal is the founder and CEO of coupons and cash back website BeFrugal.com, which saves shoppers an average of $27 an order thanks to coupons plus an average of 7 percent cash back at more than 4,000 stores.

     

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    Marc Lore is about to launch a new e-comerce dark horse jet.com 4 years after selling his successful e-commerce company Quidsi t
    Shin Woong-Jae/The Washington Post via Getty ImagesEmployees of jet.com work and comics super heroes characters are displayed on the wall at Jet.com headquarters in Montclair, N.J. Jet.com team named its system after super hero characters like Batman, Superman, Iron Man and more.
    By Trent Gillies

    Start-up e-commerce membership site Jet.com took off less than two weeks ago, but it's already flying with big ambitions.

    With a $49.99 annual membership fee and free shipping for orders of more than $35, the site has Amazon Prime, warehouse clubs and online retail sites squarely in its sights. In an interview with CNBC's "On the Money," founder and CEO Marc Lore claims that shoppers get more value the more they buy.

    Jet.com differs from its competition because of an algorithm that is able to adjust prices as you shop, he said.

    "We built this technology that actually helps pull supply chain costs out of the system," Lore told CNBC, adding that the more you buy, the less you pay for each item.

    "We built this dynamic pricing engine that actually reprices products in real time as consumers shop to reflect the true marginal cost of getting that product to you, based on knowing what's in your basket," he added.

    Lore says the savings are mostly on the cost advantage of more efficient shipping.

    "The more product you get into the same box," he said, "and the closer the buyer is to the inventory, lowers shipping costs."

    Loss leader

    "This is really a scale game. And we put out there that our goal is to get to $20 billion [in annual sales] in five years, at which point we'll be at scale." -Marc Lore, CEO of Jet.com

    According to data from e-commerce intelligence firm Profitero, Jet.com's prices were on average 8 percent lower than Amazon's and 6 percent below Walmart's (WMT). Profitero analyzed 16,000 identical items across seven categories at the three retailers in its study last week.

    Lore told CNBC that Profitero's analysis was based on the "starting price," and that consumer savings will be even greater over time -- perhaps as much as 10 to 15 percent less.

    "As you shop in a smarter way and build your basket, the marginal cost to ship additional product comes down so you see that in real time," he said. "The prices are coming down."

    Jet.com has $225 million in investor funding. Not unlike Amazon -- which recently stunned Wall Street by posting a rare profit in its latest quarter -- Lore told CNBC he expects the company to lose "hundreds of millions" of dollars until 2020.

    "This is really a scale game." Jet's CEO explained. "And we put out there that our goal is to get to $20 billion [in annual sales] in five years, at which point we'll be at scale."

    In other words, Lore has no fear of red ink -- at least until he gets what he wants. "In the short term, we will incur losses until we get to scale," he said.

    CNBC asked Lore about an order placed for a single toothbrush for $2.11. It was part of a larger order, but the toothbrush arrived separately in a shipment from Walmart.com, and the receipt Jet.com sent showed a total cost of $8.10. How can the company afford to absorb those kinds of losses?

    "In that particular case, we're simply bridging. We're start-ups still. So it's still the early days," Lore explained. "So the fact we went out and bought it at Walmart.com, in this case, is just a temporary bridge."

    Lore said the company has warehouses in New Jersey, Kansas and Nevada, and expects to increase that number. "By the next 12 months we'll have just about every everyday essential product you can imagine in the warehouses."

    Lore has had success in this sector before. He was co-founder and CEO of Quidsi, the company behind Diapers.com, Soap.com and pet supply site Wag.com. He sold the company to Amazon in 2010 for $545 million, only to go head-to-head with them five years later.

    Yet could history repeat? Would he contemplate selling Jet.com to Amazon.com (AMZN) or someone else?

    "We're not thinking about that now," Lore said, "We think there's a really big opportunity to create a large business."

    "On the Money" airs on CNBC Sundays at 7:30 p.m., or check listings for airtimes in local markets.

     

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    Comcast CEO
    Jeff Chiu/APComcast Chairman and CEO Brian Roberts
    It probably wasn't a surprise to see Comcast (CMCSK)(CMCSA) top the list of most reviled corporations last year. The cable television and Internet provider gets routinely slammed for its high TV prices, spotty online connections and questionable customer service.

    All of this was factored into Consumerist's annual Worst Company in America award last year with Comcast winning the unflattering distinction. If you deal with Comcast -- or used to deal with Comcast -- there's a fair chance that you dislike the company that has become the country's top dog in cable television and broadband connectivity. However, you may not hate the company as much as you used to last year. Let's go over a few of the reasons the public may be warming up to Comcast these days.

    1. It's cleaning up its customer service. Prolonged service outages, a lack of punctuality with technician service appointments, and unkind customer service calls that have gone viral have stung Comcast over the years, but it's making a legitimate effort to improve the experience.

    Comcast announced in May that it was creating 5,500 more customer service jobs, hoping to beef up its workforce. Late last year it struck a deal with UPS (UPS) to allow folks to return their cable boxes, modems and other rental gear directly with the parcel delivery specialist, eliminating the need to deal with long lines at local Comcast centers.

    Spotty outages will continue to eat at its reputation, but at least it's getting better about responding to the difficult moments.

    2. It's hopping on the streaming TV bandwagon. It may have been a late arrival to the stand-alone streaming television revolution, but it's hoping to make up for lost time now. Comcast will be rolling out Stream, a streaming service that for $15 a month will offer streaming access to HBO and all of the major networks. It also offers a cloud-based DVR to record shows to watch later.

    It's not perfect. It will only be made available to its Xfinity customers. Stream can be viewed on PCs, phones and tablets, but only in their homes. That may be a deal breaker for many, but it's not a bad way to go for folks who were ready to cut their premium TV provider loose, looking for a cheaper home-based alternative. Comcast's Xfinity is the country's largest Internet service provider -- it now has more broadband customers than cable TV accounts -- so it stands to benefit from the popularity of streaming services.

    Stream will kick off in Boston later this summer, rolling out nationwide by early next year.

    3. Those theme parks are pretty irresistible. Comcast's chain of Universal Studios theme parks is on a roll. Its theme parks entertained 40 million guests worldwide, and it's closing the gap with Disney (DIS) in the U.S. with its theme parks in Florida and California on a pace to post double-digit attendance growth this summer. Disney isn't growing that quickly.

    The addition of lavishly themed Harry Potter lands in Florida -- and California early next year -- have been helping. There's no shortage of Potter and theme park fans who have set aside their hate for Comcast long enough to patronize one of the theme parks.

    4. Losing out on Time Warner cable makes it mortal. Consumers may have cheered when antitrust regulators shot down Comcast's proposed acquisition of Time Warner Cable (TWC), but it ultimately makes the company more human. Comcast doesn't always get what it wants.

    Regulators have let other major deals go through, but drawing the line here for Comcast makes it less likely to continue growing by acquisition. It's going to have to earn its future growth organically, and that means that we can't say that it's just trying to buy its way to success.

    Motley Fool contributor Rick Munarriz owns shares of Walt Disney. The Motley Fool recommends United Parcel Service and Walt Disney and owns shares of Walt Disney. 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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    Couple sorting out bills
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    Mutual funds are a great way to buy into the historical success of stocks and bonds without having to take the time to research investments one at a time. Mutual funds are cheap, especially if you stick to no-load funds that pack low expense ratios.

    The luxury of investing in a mutual fund is that with someone else calling the shots, you are free to live your life. You don't have to worry about the daily market gyrations. Buying into a fund should be a "set it and forget it" experience. However, there are a few events that should force you into reevaluating your investment. Let's check them out.

    1. Your fund manager is gone. Mutual fund ads claim that "past performance is no indication of future performance," but if you're buying a fund based on its track record, what you're really doing is buying into the vision of the person managing the investments.

    Fund managers can come and go. A hot fund's manager will draw attention from rival mutual fund operators, and sometimes rock stars get pulled away to be at the helm of a new fund at the same family. If your fund managers change, you need to pay attention, especially if it was that shot caller's picks that drew you to the fund in the first place.

    It doesn't always mean you bail. This doesn't apply to index funds, naturally. Some multimanager funds hold up if some of the seasoned leadership sticks around. However, if an entirely new management team is in place, it's only fair that you dismiss the fund's past performance.

    2. The fund gets too big. It's probably not a surprise that top-rated fund managers sometimes struggle as their funds get too big. Legg Mason's (LM) Bill Miller had a legendary run at Legg Mason Value Trust. He beat the stock market for 15 consecutive years through 2005. However, with fund assets topping $21 billion at its peak, it got harder to beat the market.

    Miller made some bad bets on financials during the banking crisis, but it was probably hard to manage a fund so large. You have to buy in big chunks, and that often means either limiting oneself to the largest stocks or buying into so many different companies that it dilutes the performance of winners. It wasn't a surprise to see Miller bounce back after he moved to the helm of a smaller fund at Legg Mason.

    3. Your fund changes. Some mutual funds change over time, and it's not often for the better. A fund family can often combine two funds into one, often when one is underperforming or too small. If your fund is the one being absorbed into another, you may find you're invested in a fund with entirely different objectives than you had originally intended.

    Mutual fund families can also acquire other families, and that could result in unflattering fee changes or fund combinations. The bottom line is that if the name of your fund changes, you should take the time to investigate what has actually happened.

    It's your fund. If it ever becomes something else -- whether it's through new management, new size, or new objectives -- you may want to move on.

    Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. Check out our free report on one great stock to buy for 2015 and beyond.

     

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    By Cameron Huddleston

    One in 5 Americans spent more than what they earned in the last 12 months, according to a Federal Reserve Board survey released in May. Some might be relying on credit or dipping into savings to cover their spending because they are having trouble making ends meet. And, some are simply living beyond their means.

    Regardless of the reason your spending exceeds your income, "overspending is harmful because it could be a sign you're out of control with your finances," said Leslie H. Tayne, an attorney who concentrates in debt resolution solutions and author of "Life & Debt." Your overspending might be making it hard to pay bills, have money for emergencies and save for the future. It could lead to serious consequences, such as bankruptcy.

    Here are five warning signs that indicate you are spending too much, how your overspending can hurt you and how to get your spending under control:

    1. You max out your credit cards and pay only the minimum. If you're maxing out your credit cards and can't pay off your balances every month, it's a sign that you're relying on credit to supplement your income, Tayne said. "This is a hard cycle to break, especially if you can only afford to make the minimum payments each month," she said. Not only can this hurt your credit score, but it can also leave you in debt longer than necessary.

    If a high percentage of your available credit is used -- in other words, most of your cards are maxed out -- the credit scoring agencies consider this to be a sign that you are overextended and will likely lower your credit score. A lower score will make it harder for you to get additional credit and might force you to pay higher rates on that credit.

    Paying the minimum on your credit card won't necessarily hurt your score, but it could take you a long time to pay off your debt and cost you extra money in interest. For example, if you had a $1,000 balance on a card with a 16 percent APR and made a minimum monthly payment of $25 on your balance, it would take nearly five years to pay off your debt. And, you'd pay about $440 in interest, according to Capital One's credit card calculator.

    2. You pay bills late. About one out of 20 people with a credit file are at least 30 days late on a credit card or a non-mortgage account payment, according to an Urban Institute report.

    Paying bills late because you don't have the cash to cover them is a sign that you're overspending, Tayne said. And it sends a red flag to your credit issuers, which could hike your interest rates or lower your credit limit, according to the National Foundation for Credit Counseling. You'll also be hit with fees -- which can add up quickly -- and several late payments will hurt your credit score.

    If you're more than 180 days late on a payment, your debt typically is assigned to a collection agency or debt collector. Having debt in collections can lower your credit score and will remain on your credit report for seven years, according to myFICO.com. What's worse is that your creditors or debt collectors can sue you and be allowed to garnish you wages to pay the debt you owe.

    3. You raid your retirement account. You might think there's no harm borrowing from your retirement account because it's your money. About 20 percent of 401(k) plan participants have taken a loan from their account, according to the Pencil Research Council Working Paper. You can borrow up to half of your 401(k) balance, up to a maximum of $50,000, but Tayne said rarely is this a good idea. "Borrowing from your future is a risky move," she said.

    If you borrow from your retirement account, you will have to pay yourself back with interest -- which can be lower than the rate of return you would've gotten if you had left the money in the account. So really, you're just shortchanging your retirement savings.

    4. You use payday loans. Although these short-term loans that typically have to be paid back in 14 days might be seen as a way to cover the cost of an unexpected expense, most people who get payday loans use them to cover everyday expenses, according to a report by The Pew Charitable Trusts. It's certainly a sign that you're overspending if you have to rely on payday loans, Tayne said.

    There is a high cost to these loans. They come with extraordinarily high annual interest rates -- APRs of 391 to 521 percent. And payday lenders will let you rollover the balance of a loan for a fee if you can't repay the full amount when it's due. If you roll over a typical payday loan of $325 eight times, you'll owe more than $460 in interest and have to repay a total of nearly $800, according to the Center for Responsible Lending.

    5. You borrow from friends and family. If you have to turn to friends and family for money, it's a sign that your overspending has left you financially strapped, Tayne said. You might think it's a good way to get an interest-free loan, but "being unable to pay back the loan can lead to tension and can ruin your relationship," Tayne said.

    How to Stop the Overspending Habit

    If you've realized that you have an overspending problem, rest assured -- there are different ways you can get your spending under control and create healthy spending habits.

    1. Create a budget. The first step to getting your spending under control is to create a budget, Tayne said. Take a close look at what you're spending money on and look for ways to cut back.

    2. Rely on cash. By living on a cash- or debit-only budget, you can curb the impulse to overspend, Tayne said. She suggested setting a budget for each shopping trip and only bringing that much cash with you to avoid making impulse purchases.

    3. Get help. If you're buried in debt and can't curb your spending, your best option might be to get professional help. The National Foundation for Credit Counseling member agencies provide free and affordable debt counseling and other money management services. You can find an agency in your area through NFCC.org.

    This article originally appeared on GOBankingRates.com.

     

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