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DailyFinance.com

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    Inside A J.C. Penney Co. Store Ahead Of Earnings Figures
    Michael Nagle/Bloomberg via Getty ImagesJ.C. Penney is enjoying better than 6 percent growth, while Walmart, Kohl's and Macy's are all seeing stagnating or falling same-store sales.
    By Ryan Derousseau

    Describing 2015's stock market returns is like offering up reactions to toast with butter. [Meh. Yawn.]

    While 2015 had some cringeworthy moments -- like when China's market took a dive this summer -- for the most part, stocks are ending the year close to where they began, showing only a 1.5 percent boost in the Standard & Poor's 500 index (^GSPC). It's a far cry from the 63 percent return we saw through the three prior years.

    Consumer discretionary companies, however, offered a bright spot. As a whole, the sector rose 12 percent; consumers have more money to spare, thanks to lower gas prices and unemployment, combined with higher wages. It's a good time if you're a company selling cars, homes or apparel.

    But has the moment passed? With the Federal Reserve expecting to raise interest rates in December, tighter lending could persist. Although gas prices remain low, could oil soon become pricey again? And with seven-year long bull market rolling along, is it time for a correction? These are all primary concerns going into 2016.

    To navigate this, we talked to portfolio and money managers to help find bright spots within consumer companies that could show signs of life, even if these issues become a problem.

    American Eagle Outfitters (AEO). The Fed rate increase will certainly impact consumer companies. Historically, when rates move up, consumer discretionary and consumer staple companies perform the worst in the 12 months after the boost. But this isn't your normal rate rise -- unlike past increases, the Fed isn't "really trying to tighten monetary policy, but normalize it," says Brad Sorensen, an analyst at Charles Schwab (SCHW).

    Since rates are already at historic levels, the increase isn't to halt inflation, which remains low. Instead, it's to move the rates back to a normal level. While typical rate raises hurt consumer companies, this time around they may be spared. But that doesn't mean you should look to consumer-focused companies in droves. "We're advising clients not to get too aggressive," Sorensen says.

    Instead, it's time to get picky. One company that Jeannie Wyatt, CEO of South Texas Money Management, likes is American Eagle Outfitters. The stock fell 50 percent from 2012 to 2014 as teenagers shunned high-priced brands and American Eagle failed to control its inventory.

    But in 2014, embattled CEO Robert Hanson left and American Eagle closed 100 stores that performed poorly. It has done a better job of making sure it's not overstocked with clothes, creating a 17 percent return this year. Wyatt gives AEO stock a price target of $24, and the stock also pays a generous 3.1 percent dividend.

    Group 1 Automotive (GPI). While gas prices sit near $2, there's fear that they could rise in the next year, pinching consumer pockets.

    Don't expect them to change dramatically, though. Oil inventory levels remain high, which means there's an overabundance of supply. This has continued even as consumers pump more gasoline. Outside of a major Middle East conflict or military intervention, Sorensen doesn't see gasoline rising above $3 in 2016.

    But there's "not a lot of correlation between gas prices and consumer stocks," he says. That's because of other factors at play, like higher health care costs, which limit directly using funds saved from gas for mall purchases.

    It does, however, push people to buy more gas-guzzling vehicles that offer many auto companies higher margins. One company that Eric Marshall, a portfolio manager at Hodges Mutual Funds, likes is the dealership Group 1 Automotive.

    The average age of cars on the road is 11.5 years, a new high. When the economy struggled, people held off on purchasing new vehicles. And as improvements took hold, the last to feel the benefits were middle-class Americans. That has started to change, as wages increase and employment levels remain high. "We're still in the early innings of the replacement," Marshall says. "As long as employment is doing well, we think auto replacement consumptions will continue."

    Group 1 is cheap -- GPI stock is trading at 11 times 2016 earnings. That's below most of the industry, which trades 13 to 15 times 2016 earnings. Marshall has a price target at $110 for GPI stock.

    J.C. Penney Co. (JCP) The biggest drag on a number of companies heading into 2016 may just be their outsized performances over the past few years. But that doesn't mean the market won't grow. You just can't expect the large growth rates seen from 2012 to 2014. Sorensen expects growth next year of "mid-to-upper single digits."

    Finding companies that have much room to improve will be important since the ceilings for many stocks have already been reached. That can also mean taking a bet on companies that have struggled for years. Marshall sees that opportunity in J.C. Penney.

    In many ways, Penney's became a laughing stock of the retail world over the previous five years. Trying to adapt to weakening sales due to online shopping, it tried everything from marketing to higher end consumers, cutting back promotions and altering stores. They all dramatically failed. But now the company has gotten back to its roots with strong promotional plans, keeping its inventory at proper levels and cutting expenses.

    While Walmart Stores (WMT), Kohl's (KSS) and Macy's (M) all see stagnating or falling same-store sales, it's Penney's that has better than 6 percent growth. And JCP stock is positioned to go up. "It's been so bad for so long, it now has opportunity to gain back market share," Marshall says.

    The stock is priced at $8, which is the value that Marshall places on the company's real estate alone. A fair price for JCP stock, he says, would be $16, which offers growth in a market where there's little to find. "You're buying the real estate, but getting the retailer for free."

    Ryan Derousseau is a journalist with nine years of experiencing writing about investing and leadership issues. His work has been read in Fortune, Money, CNNMoney and Fast Company, among other publications. You can find more from him on Twitter @ryanderous.

     

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    GE Appliances Sold To Electrolux Of Sweden For 3.3 Billion
    Scott Olson/Getty Images
    GE has scrapped a $3.3 billion plan to sell its home appliance business to the Swedish company Electrolux, a deal opposed by U.S. regulators over concerns about competition.

    The Fairfield, Connecticut, conglomerate said that it will continue to run the business as it looks for other options to sell it.

    General Electric Co. offered no reason for its decision in a brief statement released Monday.

    Electrolux is the world's second-biggest home appliance maker after U.S. rival Whirlpool (WHR). The Stockholm-based company sells most of its products in the U.S. under the Frigidaire brand.

    The U.S. Department of Justice had sued to stop the deal in July, saying the combined company would dominate sales of ovens and other cooking-related kitchen appliances, especially to customers such as homebuilders, property managers, hotels and governments.

    An antitrust attorney representing Electrolux downplayed competitive concerns by noting that Asian brands like Samsung and LG have rapidly increased their share of the large appliance market over the past decade. The attorney also said huge retailers such as Home Depot (HD) and major homebuilders can pressure manufacturers to keep prices low and competition intense.

    Electrolux said Monday that it "regrets that GE has terminated the agreement while the court procedure is still pending."

    The Swedish company said settlement proposals that it considered to be reasonable were offered to federal regulators and would have addressed concerns about competition, but the Department of Justice rejected those proposals.

    General Electric has been selling parts of its portfolio as it pushes to focus more on core industrial businesses that make large, complicated equipment for other companies.

    It said Monday that it was entitled to a breakup fee of $175 million from Electrolux.

    GE (GE) shares fell 9 cents to $30.40 in premarket trading Monday about an hour ahead of the U.S. market open, while Electrolux shares dropped 11 percent in afternoon trading in Stockholm.

     

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    Non-Recyclable Keurig Coffee Pods Come Under Fire--And Continue To Sell
    Joe Raedle/Getty Images
    By Sruthi Ramakrishnan

    Keurig Green Mountain, the maker of K-Cup single-serve coffee pods, said Monday it would be bought by an investor group led by Germany's JAB Holding Co. for about $13.9 billion, creating a global coffee giant.

    The deal, pitched at a 78 percent premium to Keurig's Friday close, is the latest by JAB as it seeks to become a formidable competitor to world coffee market leader Nestle.

    JAB formed a joint venture in July called Jacobs Douwe Egberts -- now the largest coffee company -- by combining its D.E. Master Blenders 1753 business with the coffee business of Mondelez International (MDLZ).

    JAB, the investment vehicle of the billionaire Reimann family of Germany, bought U.S. coffee companies Caribou Coffee Co. and Peet's Coffee & Tea in 2012.

    Keurig's (GMCR) shares were trading at $90.05 in early trading Monday, short of the $92 a share offer.

    The stock last traded at $92 in May. Nearly 13 percent of the company's total float is held by short sellers.

    "The 78 percent premium should keep other bidders at bay," SunTrust (STI) Robinson Humphrey analyst William Chappell wrote in a client note.

    Keurig, which had lost more than 60 percent of its market value this year up to Friday's close, has struggled with declining sales of its single-serve coffee pods and brewers due to intense competition.

    The company's latest countertop device, a cold drink brewer called Keurig Kold launched in September, failed to excite buyers.

    Coca-Cola Co. (KO), Keurig's biggest single shareholder, said it would receive cash for its 17.4 percent stake in the Vermont-based company. The stake is valued at about $2.4 billion at the offer price. Coke's shares were little changed.

    JAB is acquiring Keurig in partnership with investors who are already shareholders in Jacobs Douwe Egberts, including Mondelez and entities affiliated with BDT Capital Partners.

    JAB's other holdings include controlling stakes in cosmetics company Coty (COTY) and luxury goods-makers Jimmy Choo (CHOO).

    The deal is expected to close in the first quarter of 2016.

    Bank of America Merrill Lynch (BAC) and Credit Suisse (CS) provided fairness opinions to Keurig Green Mountain.

    -Martinne Geller contributed reporting from London.

     

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    close up of woman hands with tablet pc and money
    Getty Images
    By Liz Weston

    LOS ANGELES -- Earlier this year a tax pro mentioned the FileThis organizing app to me. Within seconds of installing it, I wondered, "Where has this been all my life?"

    I have tried an absurd number of software programs that promised to simplify, streamline and de-clutter our family's financial life. Most fell short, offering too little benefit, steep learning curves or both. A few insanely useful ones, though, made it to the mobile Hall of Fame, otherwise known as my home screen.

    If you are trying to get a grip on your money, you may find these to be helpful:

    1. FileThis. The app does what I frequently forget to do since going paperless several years ago -- download account statements.

    It also gives you an overview of your accounts and gives you bill due-date reminders.

    I use FileThis' free version to automatically fetch statements from up to six "connections" or links to financial institutions.

    I have multiple accounts at each institution, so I am able to track far more than just six accounts. The free version offers 500 megabytes of cloud storage.

    To get more connections and storage, you can pay $2 a month for up to 12 connections and 1 gigabyte of storage or $5 for up to 30 connections and 10 gigabytes of storage. Users also can opt to have documents downloaded to a number of other storage sites, including Dropbox and Evernote, or to their computers.

    2. ItsDeductible. We donate a ton of clothes, toys, books and household goods to local charities, but I always put off attaching values to the donations until our taxes were due and it became a big, unpleasant chore.

    The free ItsDeductible app from Intuit (INTU) allows me to record contributions as we make them and offers values for common items. I print out an annual report for our tax pro, although TurboTax users can download the information directly into their returns.

    3. DropBox. Accessing files from any device or location is essential for my work, but cloud-based storage also helps when we travel and in preparing for natural disasters. So I regularly upload travel documents, insurance policies, appraisal reports, home inventories, scans of old tax returns and other important paperwork.

    I used the free service for years but recently approached the 2 gigabyte storage limit and upgraded to 1 terabyte of storage for $99 a year.

    4. Mobile banking. I dismissed mobile check deposit as a fad until I actually tried it. Now I agree with financial planner Michael Kitces, who calls it "a crucial aspect" of his financial life.

    "The only time my wife or I have set foot in a physical bank branch for the past two years was to get a legal document notarized. It's glorious," said Kitces, research director at Pinnacle Advisory Group in Columbia, Maryland.

    All the other stuff my bank app does -- transfer money, pay bills, send alerts, find fee-free ATMs -- makes this one of my most-used mobile money tools.

    5. Mint. Intuit's free personal finance aggregator allows its 2.5 million monthly users to track their spending, monitor their credit scores and spot potential fraud by automatically downloading transactions from bank, credit card and investment accounts.

    It is also a favorite among financial advisers.

    "Mint allows you to combine all of your finances into one location so that you can take a high level view," said David Almonte, a certified public accountant in Providence, Rhode Island.

    If you are an active investor, you might prefer Personal Capital, which has a better free portfolio manager. I liked Personal Capital's elegant, ad-free dashboard. I didn't like, however, being emailed and called about signing up for its fee-based investment advisory service, which is the site's raison d'etre.

    While some worry about security with aggregator sites where you have to hand over your account login credentials, I am comfortable with these sites' privacy and security policies.

    As the victim of several database breaches, including those at Anthem (ANTM) and Sony (SNY), I know that staying offline is no guarantee of safety. Too much of our private information is stored in insecure databases over which we have no control. With these sites, at least, I have some choice over what I share.

    (The author is a Reuters columnist. The opinions expressed are her own.)

     

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    Cash Payment Tips
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    By Stacy Rapacon

    With the New Year rapidly approaching, it's a good time to reflect on the past year and think about all the people who have helped you get through it -- and how best to show them your appreciation. "The root of the word gratuity is gratitude," says Daniel Post Senning, great-great-grandson of etiquette empress Emily Post and coauthor of the 18th edition of "Emily Post's Etiquette." "An annual or holiday tip is an opportunity to really think about the people who are oftentimes the most important people in our lives."

    Your hair stylist, babysitter and trash collectors, for example, have helped care for you, your kids and your home, respectively. (See our comprehensive list of people you should consider tipping for the holidays.) It'd be nice of you to thank them.

    Emphasis on "it'd be nice." You shouldn't feel required to tip for the holidays at all. "It's not an obligation," says Diane Gottsman, national etiquette expert and founder of the Protocol School of Texas. "It depends on your budget. You really just want to tip the people that you really feel from the heart that you want to give to."

    And whether you want to or not, there are plenty of people you shouldn't even consider tipping for the holidays. As helpful as they might have been throughout the year, you shouldn't hand out cash or valuable gifts to:
    • doctors
    • lawyers
    • accountants
    • financial advisers
    Basically, no tips for financial pros of any kind -- not even your favorite personal finance writer (but I appreciate your appreciation!).

    These types of professionals typically earn a nice living without relying on or expecting any gratuities. They may even be insulted by such a gesture. "You're not going to give cash to these people; it would just not be appropriate," says Gottsman. "If you want to show them consideration for the holidays, certainly you can send, let's say, a tray of treats to the office."

    You also want to skip tipping your children's teachers. As much as they do for your kids, offering them cash may be misconstrued as some kind of bribe --perhaps to boost your kids' grades or gain them more personal attention. The same might be said of tips for the school principal or coaches. "It's hard to say don't tip them because they oftentimes seem the most deserving," says Post Senning. "But it can create a potentially awkward situation if some kids in class are giving their teachers expensive gifts and other kids aren't."

    Instead, Post Senning recommends giving deserving teachers a personal card, gift or treat -- even better if it's something your child helped make. "It's a great way to teach kids the value and importance of thanking people without putting the teacher in an uncomfortable position."

    And at your office, don't even think about tipping the boss. "You don't want to send any expensive gifts up the food chain," says Post Senning. In this situation, as well as for teachers, find out if you can get in on any group gifts.

    If you're a supervisor, don't give cash to your staff, no matter how much you want to acknowledge their work. A deserved bonus from the company, of course, would be great and happily accepted, I'm sure. But a little extra straight from a supervisor would be awkward at best. Again, a small gift or sincere note would be a better move.

    In general, be sure to check company policies before giving a tip or gift to anyone. Some organizations don't permit their workers to accept cash or extravagant presents. For example, the U.S. postal service prohibits employees from accepting money and limits gifts to a value of $20. "You don't want your giving to make somebody feel uncomfortable," says Gottsman. "When somebody says 'I really can't,' you have to accept that."

     

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    Money-Saving Items That Pay for Themselves
    If you're trying to live a frugal lifestyle, it can seem counterintuitive to spend extra money on products. However, certain items can actually help you save more in the long run. Here are a few to consider.

    First, think about investing in a slow cooker. The average family spends about $50 at a restaurant, and ordering out a few times a week can quickly add up, but with a slow cooker you only pay a fraction of the cost in ingredients to make a great meal. Just throw them in the cooker and by dinnertime your meal will be ready.

    Next, swap out your incandescent bulbs for cost-effective LEDs. Incandescent bulbs use more energy, costing up to eight times more on your electric bill. While LED's be a bit costly, they last up to 23 times longer, which means less replacement and less money spent.

    Finally, you can eliminate rental costs from your cable company by buying your own modem. Many people don't realize that they're being billed up to $10 a month to "rent" their cable modem. Instead of paying that fee regularly, invest in a modem that's compatible with your cable provider for about $100 and you'll break even in less than a year.

    The next time you're at the store, remember these money-saving products, because sometimes you have to spend money to save money.

    View Poll

     

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  • 12/08/15--21:00: 4 Golden Rules of Investing
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    4 Golden Rules of Investing

    Whether you're new to investing or a market veteran, these time-tested tips can help you build your fortune.

    Rule Number 1: Diversify. Since some investments zig when others zag, divvy your money across several investment categories, from stocks to bonds to real estate. Also diversify within categories. Diversification spreads risk and guards against a catastrophic decline in any one investment.

    Rule Number 2: Rebalance. Review your portfolio yearly to make sure your mix of investments hasn't strayed from your original goals. If it has, sell investments that have performed well and use the proceeds to invest in underperformers to regain balance.

    Rule Number 3: Dollar-cost average. Fear can cause investors to miss buying opportunities when prices are low. Euphoria can cause them to buy high. By investing the same amount in the same investments on a regular basis, dollar-cost averaging takes emotion out of the equation.

    Rule Number 4: Keep costs down. You can't control how much your investments earn, but you can control how much you pay to invest in them. Save by using an online discount broker, and stick with low-fee index funds and actively managed no-load funds.

    Read more about how to be a better investor in today's market.

     

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    Marissa Mayer on Yahoo's Future


    SAN FRANCISCO (AP) -- Internet pioneer Yahoo (YHOO), under pressure from unhappy shareholders and desperate to avoid a huge investment-related tax bill, will break itself apart - just not in the way it had previously planned.

    The company will now aim to spin off its struggling Internet business - essentially, everything associated with the Yahoo brand name - into a new company. Yahoo itself would then become little more than a holding company for its $32 billion stake in Chinese e-commerce giant Alibaba.

    For most of the past year, Yahoo had planned instead to spin off the Alibaba stake into a separate holding company called Aabaco. That corporate maneuver was designed to sidestep more than $10 billion in taxes Yahoo might otherwise owe. But the IRS jeopardized that plan by refusing to guarantee a tax exemption.

    The about-face could mean big changes for hundreds of millions of users who rely on Yahoo websites, services like email and other mobile applications. CEO Marissa Mayer plans to outline a cost-cutting reorganization late next month; many analysts speculate that Yahoo may simply sell off that business if the latest overhaul doesn't bear fruit quickly

    The uncertainty and reshuffling threaten more distractions at a time when Yahoo is already struggling in digital advertising against rivals such as Google and Facebook. It also may raise more doubts about whether Mayer will be able to turn around Yahoo, even though company Chairman Maynard Webb said Wednesday that the board of directors remains in her corner after three-and-half years on the job.

    "The bottom line is the saga continues," Macquarie Securities analyst Ben Schachter wrote in a Wednesday note titled "The Never-Ending Story."

    Yahoo's new spinoff plan could be even more complicated than the original Aabaco spinoff. It may take more than a year before Yahoo shareholders get stock in a newly formed company that has yet to be named.

    "This means they have squandered an entire year and now it's going to take another year while the core business continues to get weaker," BGC Financial analyst Colin Gillis said.

    With Yahoo hanging in limbo, prospective bidders could emerge for the company's Internet operations, which Wall Street has been valuing at next to nothing. Analysts believe Yahoo's websites, mobile applications, ad services and well-known brand eventually could be worth $3 billion to $5 billion. Suitors might include AT&T Inc., Verizon Communications, Comcast Corp., IAC/InterActiveCorp and private equity firms that specialize in buying troubled companies.

    Webb, though, emphasized there are no plans to sell Yahoo's Internet business, which he called "tremendously undervalued" in a Wednesday conference call. The best path forward, Webb said, involves "separating the Alibaba assets from our operating businesses and also turning around the performance in our operating business."

    Those remarks seemed to disappoint investors hoping that Yahoo's latest change in course might be a precursor to a sale. Yahoo's stock fell $1.19, or 3.4 percent, to $33.67 in Wednesday's afternoon trading. The company's stock has fallen by about 33 percent so far this year.

    Yahoo's board met last week to review Mayer's stalled turnaround attempts, as well as whether to move ahead with the previously planned Alibaba spinoff. Although the board unanimously voted in favor of dropping the spinoff, it emerged from last week's meeting with one less director. The company disclosed Wednesday that Paypal co-founder Max Levchin, a director recruited by Mayer, is resigning from the board to concentrate on running his latest financial services startup.

    Mayer said she believes Yahoo's Internet business in significantly better shape than when she arrived, largely because it is pulling in more traffic and advertising in the increasingly important smartphone and tablet market. Even so, Yahoo's net revenue declined by 8 percent from the prior year in the third quarter and an even steeper decline is forecast for the current quarter ending in December.

    When Yahoo announces those fourth-quarter results next month, Mayer also plans to unveil a shake-up that is supposed to jettison the company's least profitable products and likely will lead to layoffs.

    It will be the latest overhaul of a company that is now on its fifth full-time CEO in the past decade, all of whom have struggled to define what Yahoo's mission should be. In the backdrop, Yahoo also has had to ward off a hostile takeover bid from Microsoft Corp. and quell shareholder uprisings spearheaded by activist investors Carl Icahn and Daniel Loeb. Another activist shareholder, Jeff Smith of the New York hedge fund Starboard Value, had threatened to lead a mutiny if Yahoo's board hadn't backed off from the Alibaba spinoff.

    "The narrative around Yahoo and our valuation is complicated," Mayer said Wednesday during an appearance on the financial news channel CNBC.

    The handling of the Alibaba stake is crucial to Yahoo shareholders because of the money involved. If Yahoo is taxed on the gains in its original $1 billion investment, the bill would exceed more than $10 billion.

    Yahoo also owns a stake in Yahoo Japan that's worth $7 billion to $8 billion. The revised plan calls for the Yahoo Japan holdings to move into the new company that will house its Internet operations.

     

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    Where's The Money? Getting Your Finances in Order


    We all know the drill by now: Make a New Year's resolution to lose weight or reduce spending or finally finish that novel. Fail in miserable fashion. Feel bad about yourself and scarf down a tub of double-chocolate ice cream.

    It is enough to make you want to throw your hands up and not make resolutions at all. Like Cheryl Chen, a freelance writer in southern California.

    "I used to do New Year's resolutions, and then never kept them," said Chen, 27, who stopped making resolutions altogether around three years ago. "I don't see the point in all the pressure. Everyone is always asking about them."

    But before you swear off resolutions forever, check out new data from mutual fund manager Fidelity Investments. Fidelity's just-released New Year's Resolutions study discovered that making financial resolutions does, in fact, help get your fiscal house in order.

    In fact, of those who nearly or completely achieved their resolution for this year, 56 percent said their finances had improved. Of those who fell short, only 34 percent reported better money circumstances.

    "Financial resolutions are actually relatively easy to achieve," said John Sweeney, Fidelity's executive vice president for retirement and investing strategies. "With diet or exercise, you have to get up every single morning and resolve all over again, but with something like a 401(k) payroll deduction, you just set it up once at the beginning of the year, and then it becomes part of your lifestyle."

    In the Fidelity survey, 37 percent of those surveyed planned on making financial resolutions for Jan. 1, up from 31 percent last year.

    The top three financial resolutions: "saving more," cited by 54 percent of respondents; "spending less," with 19 percent, and "paying off debt," with 16 percent.

    The secret fears driving those money resolutions? Most said unexpected expenses, the economy and healthcare costs in retirement.

    All the financial pledges in the world will not mean a thing if you have no firm strategy for how to pull them off. So how do you go from resolution to actual achievement?

    It comes down to forming an action plan.

    "If it's a few seconds to New Year's and you're just throwing something up in the wind, then it's not going to work," said Dr. John Norcross, a psychology professor at the University of Scranton who has conducted multiple studies on the subject. "It requires preparation. You have to be serious about the endeavor."

    For those who are dedicated to their goal, the statistics are pretty impressive: Norcross found that 46 percent of people were able to keep their resolution for at least six months.

    "We actually stopped doing the study, because we found the exact same thing every time," Norcross said. "People should be comforted that achieving your resolutions is possible."

    His main trick for success? Deliberately design your life so that you are more likely to succeed and not just rely on willpower alone. That means making realistic and attainable goals, publicly declaring them so that others will encourage and help you, and rewarding yourself for your successes.

    It also means tracking your progress, avoiding environments where you will fail (if you are trying to lose weight, don't walk by that French patisserie), and allowing yourself the occasional slip-up, Norcross said. Draw up a specific plan in place for when you screw up, and gobble down a donut or two.

    After about three months, the new routine will have taken over and your behaviors will become automatic.

    Watch more coverage below:

    Need Help Managing Your Finances? There's an App for That

     

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    Police Raid Home of Rumored Bitcoin Founder


    Australian police raided the Sydney home and office on Wednesday of a man named by Wired magazine as the probable creator of bitcoin and holder of hundreds of millions of dollars worth of the cryptocurrency, Reuters witnesses said.

    More than a dozen federal police officers entered a house registered on the electoral roll to Craig Steven Wright, whom Wired outed as the likely real identity of Satoshi Nakamoto, the pseudonymous figure that first released bitcoin's code in 2009.

    Locksmiths broke open the door of the property, in a suburb on Sydney's north shore. When asked what they were doing, one officer told a Reuters reporter they were "clearing the house".


    A reporter who approached an office listed as the location of two of Wright's registered businesses, DeMorgan Ltd and Panopticrypt Pty Ltd, in another Sydney suburb, was turned away by police with one officer saying: "There's an operation going on at the moment, I can't answer any questions." Several police officers could be seen speaking with workers inside.

    The identity of Satoshi Nakamoto has long been a mystery that journalists and bitcoin enthusiasts have tried to unravel.

    The police raids in Australia came hours after Wired magazine and technology website Gizmodo published articles saying that their investigations showed Wright, an entrepreneur and academic, was most probably the secretive bitcoin creator.

    Wright is the chief executive of Australian-registered DeMorgan Ltd, which he describes on his Linkedin page as "a pre-IPO Australian listed company focused on alternative currency".

    The Australian Federal Police (AFP) said in a statement that the officers' "presence at Mr. Wright's property is not associated with the media reporting overnight about bitcoins".

    The AFP referred all inquiries about the raids to the Australian Tax Office, which said it could not comment on "any individual's or entity's tax affairs" due to legal confidentiality.

    Emails to various addresses listed for Wright did not receive a reply.

    The Wired and Gizmodo investigations were based on leaked emails, documents and web archives, including what was said to be a transcript of a meeting between Wright and Australian tax officials.

    "Either Wright invented bitcoin, or he's a brilliant hoaxer who very badly wants us to believe he did," Wired said.

    Reuters could not independently verify the authenticity of the documents and transcripts quoted in the reports.

    POWERFUL COMPUTERS

    At Wright's rented home, a modest brick house in the leafy middle class suburb of Gordon, three police workers wearing white gloves could be seen searching the garage, which contained gym equipment.

    A man who identified himself as the owner of the house, Garry Hayres, told Reuters that Wright and his family had lived there for a year, and were due to move out on Dec. 22 to move to Britain.

    Hayres said that Wright had a "substantial computer system set-up" and had attached a "three-phase" power system to the back of the house for extra power.

    Police personnel at Wright's office in nearby Ryde wore shirts tagged "Computer Forensics". A fellow business tenant at the building, who declined to be named, said Wright had not been seen there in the past week.

    Satoshi Nakamoto is the pseudonym of the person or group of people who authored the paper, protocol and software that gave rise to bitcoin.

    The New York Times, Newsweek and other publications have guessed at Nakamoto's real identity, but none has proved conclusive.

    Newsweek identified a Japanese-American called Dorian Prentice Satoshi Nakamoto in March 2014, but he has steadfastly denied being the author of cryptocurrency.

    Uncovering Nakamoto's real identity would be significant, not just to solving a long-standing riddle, but for the future of the world's most commonly used virtual currency.

    Unlike traditional currency, bitcoins are not distributed by a central bank or backed by physical assets like gold, but are "mined" by users who use computers to calculate increasingly complex algorithmic formulas.

    As an early miner of bitcoins, Nakamoto is also sitting on about 1 million bitcoins, worth more than $400 million at present exchange rates, according to bitcoin expert Sergio Demian Lerner.

    The treatment of bitcoin for tax purposes in Australia has been the subject of considerable debate. The ATO ruled in December 2014 that cryptocurrency should be considered an asset, rather than a currency, for capital gains tax purposes.

    Australia's major banks announced in September they were closing accounts of bitcoin companies, forcing at least 13 digital currency providers out of business in response to tougher rules on money laundering and terrorism financing.

    A Reuters investigation in October found that Australian businesses were turning their backs on bitcoin as the banks' move accelerated a trend by mainstream businesses to drop the currency.

    Watch more coverage:

    Bitcoin: The Satoshi Nakamoto Riddle

     

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    Citadel's Griffin Backing Rubio for President


    WASHINGTON, Dec 9 (Reuters) -- Hedge fund manager Ken Griffin of Citadel will support Republican U.S. Senator Marco Rubio of Florida for president in 2016, the billionaire said in a statement on Wednesday.

    "Senator Rubio is uniquely qualified to lead our nation with conviction and courage to tackle the pressing issues of our time," Griffin said, citing strengthening the U.S. military and reducing the size of government as key challenges.



    Griffin will raise money for Rubio and contribute "several million dollars" to an outside group supporting him, according to CNBC, which first reported the billionaire's plans.

    Citadel spokesman Zia Ahmed confirmed those plans.

    Alex Conant, a spokesman for Rubio, confirmed that Griffin would back the senator but gave no details about his involvement. A spokesman for Rubio's Super PAC did not respond to a request for comment.



    Rubio has lagged some Republican opponents in fund-raising, coming in behind former Florida Governor Jeb Bush and U.S. Senator Ted Cruz of Texas in the last quarter.

    But Rubio has picked up some big-time backers recently. Another billionaire, investor Paul Singer, threw his support behind Rubio and sent a letter to other donors in October urging them to back the lawmaker.

     

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    Retirement Fund
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    Contributing to a retirement account qualifies you for tax breaks and employer contributions, both of which will grow your nest egg faster. Here's how to take full advantage of the 401(k) and individual retirement account perks you're eligible for in 2016.

    Max out your 401(k). Workers can contribute up to $18,000 to their 401(k) plans in 2016. To completely max out this account, you will need to save $1,500 per month or $750 per twice monthly paycheck. A worker in the 25 percent tax bracket who tucks the full amount into a 401(k) plan will save $4,500 on his federal income tax bill. Retirement savers in the 35 percent tax bracket will save $6,300 on the same contribution. Income tax won't be due on this money until it is withdrawn from the account. And if you drop into a lower tax bracket in retirement, you will pay that lower rate on the distributions. If you withdraw that $18,000 while in the 15 percent tax bracket, you will only ultimately pay $2,700 on that contribution.

    Make catch-up contributions. Workers age 50 and older can contribute an additional $6,000 to a 401(k) plan in 2016, for a total contribution of $24,000. "If you will turn 50 this year, that's an additional $6,000, and it's all deferred income from taxes," says Helga Cuthbert, a certified financial planner for Cuthbert Financial Guidance in Decatur, Georgia. Hitting this 401(k) limit requires saving $2,000 per month. Saving this much will reduce your tax bill by $6,000 if you are in the 25 percent tax bracket and $8,400 if you pay a 35 percent federal income tax rate.

    Get an employer match. If you can't save enough to take full advantage of the 401(k) tax deduction, at least aim to save enough to claim any matching funds your employer offers. If your company provides a 401(k) match up to 6 percent of pay, remember to set up withholding for that amount. This means saving $200 per month if you are earning $50,000 and $500 monthly if your salary is $100,000. Some companies automatically enroll employees in the plan at 3 percent of pay, and you will need to take action to adjust your withholding if you want to take full advantage of the match. "If you get a raise next year, I would increase your savings rate now so your take home pay is the same as it was before the raise, and instead put that money in your company retirement plan," says Francine Duke, a certified financial planner for Aqua Financial Planning in Chicago. "You won't even notice the difference."

    Take full advantage of IRAs. In addition to saving in a 401(k), you can defer income tax on another $5,500 that you contribute to an IRA in 2016. Workers age 50 and older are eligible to contribute an extra $1,000 for a total of $6,500. Maxing out an IRA requires saving $458 per month if you are 49 or younger and $542 per month for those 50 and older. If you have a 401(k) account at work, you won't be able to claim the full tax deduction for an IRA contribution if your modified adjusted gross income is between $61,000 and $71,000 ($98,000 to $118,000 for married couples), or any deduction if your income tops these amounts. If you are married to someone with a retirement account, the tax deduction for IRA contributions is phased out for couples earning between $184,000 and $194,000 in 2016.

    Consider a Roth IRA. Roth IRAs have the same contribution limits as traditional IRAs, but the tax treatment is different. There's no tax deduction for Roth IRA contributions, but the investment earnings in the account aren't taxed and withdrawals after age 59 1/2 are tax-free. "You can just let that Roth IRA grow in value tax-free and use it as a source to take out money later in life," says Chris Falvello, a certified financial planner for Navigate Financial Advisors in Ocean View, Delaware. "You get the money back tax-free." Roth IRA eligibility phases out for taxpayers whose adjusted gross income is between $117,000 and $132,000 ($184,000 to $194,000 for married couples).

    Claim the saver's credit. If you save in a retirement account and your adjusted gross income is less than $30,750 for individuals, $46,125 for heads of household and $61,500 for married couples, you might be eligible to claim the saver's credit. Contributions of up to $2,000 ($4,000 for couples) could earn you a tax credit worth between 10 and 50 percent of your retirement account deposit.

     

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    Most Americans Give Gifts Over Experiences: Survey


    By

    A gift card is an easy choice if you want to treat friends and co-workers this holiday season --but your card may be third or fourth one that someone receives if you choose a crowd-pleaser like Starbucks cards.

    If you want your present to stand out and be remembered, consider giving the gift of choice. Here are some cards that will allow the people on your list to choose something they really want from among hundreds or millions of items.

    1. Multimedia online stores: Google Play and iTunes App Store

    When you don't know which type of media -- mobile apps, music, games, TV shows, movies or e-books -- someone likes most, Apple and Google gift cards can satisfy almost any preference. Their online stores have extensive lists of apps as well as well-rounded multimedia collections.

    Google Play and Apple's iTunes gift cards, which have no fees, are limited to online purchases, so they can't be used on accessories, phones or tablets. These cards may be particularly attractive to adults ages 18 to 24: Over 55 percent of them want books, video games, DVDs and CDs for the holidays, the highest percentage of all age groups, according to an October National Retail Federation survey.

    2. Restaurants: OpenTable and Restaurant.com

    Food is also a huge part of the holidays, and the NRF found out that restaurant gift cards are the most popular type of gift card overall. But instead of buying a card for a single restaurant, buy one that works at many.

    Restaurant reservation company OpenTable and digital marketing website Restaurant.com both sell gift cards that can be used to foot the bill at diners, bistros and other eateries across the U.S. The people who receive your gift cards can redeem them online for a certificate from the restaurant of their choice.

    Both companies work with thousands of restaurants nationwide -- OpenTable cites over 3,500 restaurants and Restaurant.com over 20,000 -- but neither guarantees that all venues on their listings are available. Restaurant.com also provides deals on these cards; for example, a $50 gift card is available for $20 on their site. Although there are no purchase fees for the gift cards themselves, note that users may be required to spend more than the gift card amount at restaurants.

    3. Retail giants: Amazon and Wal-Mart

    If you want to provide a wider selection of products with your gift card, try some of the biggest retailers out there. Amazon and Wal-Mart gift cards don't have purchase fees, and they can be redeemed online.

    Apart from selling millions of items, these two retail giants offer gift card features that might not be available from other retailers. Wal-Mart cards can be loaded with up to $1,000, and recipients can consolidate multiple Wal-Mart gift cards for purchasing items. Amazon's gift card can hold up to $2,000, and you can schedule the day it lands in the recipient's email inbox. Unlike most gift cards, both of these offer reload options.

    4. Bank gift cards: Visa, MasterCard and American Express

    For maximum flexibility and choice, you can buy general-purpose gift cards. These can be used at millions of merchants nationwide, wherever the payment network is accepted. The cards act much like debit cards, but you can't get cash from them or reload them. If you want to give someone the most buying options, this type of gift card is easily the best choice.

    These cards do tend to have one or two fees. Visa and MasterCard gift cards often don't have purchase fees when obtained at banks and credit unions, but there are charges for card replacements and inactivity after one year. When you buy either of those two cards at retailers or on websites, there is generally a $3 to $7 purchase fee but no subsequent costs for use, inactivity or card replacements.

    American Express gift cards aren't available at banks or credit unions, but you can find them at major retailers or online; they have a similar purchase fee. As with any gift card, funds never expire; but the card itself can, meaning the recipient will need to request a replacement if it goes unused past its expiration date.

    If you want to give someone more choices than a peppermint mocha or a caramel brulée latte this season, these four types of gift cards are the ticket. Together, they offer as close to an infinite number of choices as you can get.

     

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    401k savings plan
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    By Ryan Ermey

    BrightScope recently identified the industries with the best 401(k) plans. Which industries came out on top?

    Our rating system is based on how quickly the average participant in a given 401(k) plan is going to accumulate the money we believe someone needs to retire comfortably within his or her industry. Law firms, utilities, mining companies and airlines were top scorers because they typically offer plans with low fees and some form of profit-sharing. Employees in these industries are highly educated and well paid. They tend to contribute at a higher rate than do employees in lower-ranked plans, and they let those dollars grow over time.

    How can I tell if my company's 401(k) plan isn't up to snuff?

    High plan fees are a red flag. But remember that fees vary depending on plan size, industry and other factors. And fees pay for services; a 24-hour help line through which employees can get great advice may be worth the money. Also, the investment menu should meet your needs. If you're nearing retirement, for example, make sure there are investment options that will get you there securely -- for instance, a low-volatility fixed-income investment such as a stable-value fund.

    Haven't people sued their employers for offering funds in expensive share classes?

    The onus is on the company to provide the best plan possible. But if you work for a small company, expensive share classes may be all that your plan provider can afford. The smaller the value of the assets, the more you pay in fees.

    What recourse do you have if you're not happy with your plan?

    Search for your company plan on BrightScope.com and compare the plan's price and performance with those of similarly sized companies in the same industry. If your plan doesn't measure up, present your concerns to the plan sponsor, usually someone in the human resources department. He or she has the legal duty to manage the plan responsibly, but might not even know that the plan is problematic.

    What if everything is above-board, but your plan still stinks?

    Do the math and determine whether it's worth it to be part of the plan. Investing enough to get an employee match, for instance, probably is. If investing beyond that amount isn't worth it, consider an IRA. You can't contribute as much as you can to a 401(k), but you still get the power of tax-deferred compound growth. That's a big win.

     

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    Senior African American couple paying bills
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    By

    Retirement sounds like fun, doesn't it? It can be. But it also involves a major change in your life, and therefore represents a stressful transition. On the "life events scale" used by psychologists to determine stress levels, retirement is rated as the 10th most stressful event you can experience - behind the death of a spouse, divorce or a jail term, but ahead of the addition of a new family member, the death of a close friend or foreclosure on your home.

    In addition, other stressful events may occur at about the same time. Your spouse may also be retiring, or there may have been a change in your health. Or perhaps you're moving. All these events add to your stress levels. The way to cope is to anticipate what will happen, make some plans and then don't harbor any regrets for what you've left behind. Here's how to look ahead to the opportunities in front of you.

    It's a big change. First of all, accept the fact that you are making a big move. It's normal to feel a little apprehensive as you start a new phase of life, so don't beat yourself up about it. You are no longer on the clock. You are free to do what you want. There are no more meetings, sales calls or work-related travel. So remind yourself that, once you get settled, the lifestyle you are about to embrace should be easier and less stressful than your work life, and is often more personally fulfilling.

    There's a lot of excitement. Retirement is something most of us have been looking forward to for years. We've been anticipating the road ahead and are about to embark on a journey that is entirely of our own making. The opportunities are endless and perhaps a bit daunting. There is no more commute, schedule or limits at all, except the ones you put on yourself. Excitement adds to stress. But just remember, you're not throwing out the entire script of your life, just turning the page to a new chapter. Yes, it's a big change, but you're still grounded in your family, friends and your own self-identity.

    You're faced with a new challenge. Retirement brings many unknowns. What if you run out of interesting things to do? Are you afraid you'll be bored? If you're worried about that, then perhaps it's time to set a goal. It might be traveling to all seven continents, starting a new business, volunteering for a favorite cause or stepping in to help take care of your grandchildren. The younger you are when you retire, the more ambitious you can get. But if you're not retiring until age 70 or later, maybe it's time to just relax. You've earned it.

    So do something about it. Make a plan, including a financial plan. You'll save yourself a lot of anxiety if you know where you stand financially, and where your monthly income is coming from. Take inventory of your IRAs and 401(k)s, and do your homework on Social Security and Medicare. Retirement is also a popular time for people to assess their health, and perhaps start some lifestyle changes that will keep you healthy, and therefore more stress-free.

    Keep your options open. Sometimes your retirement dream turns out to be a nightmare. A couple might move to Florida and find they can't stand the heat and humidity and traffic. A business executive who volunteers for a nonprofit could find the new atmosphere stifling and frustrating. But in retirement, as opposed to the workforce, you are now in control. Some people move back home after they've tried Florida, and there's no shame in quitting your volunteer job and trying something else. One thing to remember about retirement is you no longer have to compete in school, contend for dates or climb the corporate ladder. You have much less to gain or lose. That should take the pressure off.

    Keep your sense of perspective. Remember, retirement is a relatively new concept. It's only been around for about a hundred years. We are fortunate to be able to enjoy this stage of life. Not everyone lives to see retirement. Over 2 million baby boomers have already died, never reaching this stage of life. So count yourself lucky, and go out and enjoy what is truly a lifetime bonus.

     

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    Holiday Gifts That Cost Next to Nothing
    With the holidays almost here, it's shopping season, but buying all those gifts can quickly drain your budget. Luckily, here are a few DIY gift ideas that will spread cheer to your friends, family and bank account.

    First, try bringing some joy to old photos with cookie cutter frames. Simply place a cookie cutter on top of your photo. Then, trace the outer edge of the cookie cutter. Carefully cut your photograph along the traced edge, and finally pop your photo into the back of your cookie cutter. For an added festive feel, get some ribbon and turn your cookie cutter frames into Christmas tree ornaments.

    Next, try mixing things up with your own hot chocolate mix. Just layer unsweetened cocoa powder, powdered milk, sugar, salt, chocolate chips and mini marshmallows in a jar. This gift also has great decorative possibilities. Try decorating the jar with labels, ribbons, and other crafty things.

    Finally, rejuvenate your gift budget with a homemade Sugar Cookie Foot Scrub that calls for ingredients you might already have in your pantry. Just mix brown sugar, white sugar, olive oil and vanilla extract. Then, pour the mix into a jar that you've spruced up with some personal decorations. Adding your personal touch to these gifts will make the holidays especially joyful.

    These are just a few of the many great gifts you can make without paying too much. By getting creative with these tips, you can overcome the naughtiness of overspending and be nice to your savings.

    View Poll

     

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    Row of Credit Cards
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    Lindsay bought a memory foam mattress from a store that guaranteed no interest financing for two years. Fourteen months after the purchase, interest charges surfaced on her bill.

    A credit card David did not open showed up on his credit report as delinquent. The debt, which he discovered because he kept getting denied new credit, will remain on his credit history for seven years.

    Joyce's son purchased a wedding band on her credit card without her approval. When she contacted the jeweler, the store refused to do anything about it.

    Though their names have been changed for this article, these are all real complaints consumers have filed with the Consumer Financial Protection Bureau.

    U.S. News & World Report's Best Credit Card rankings​ take into account consumer stories​ like these to evaluate credit cards on the market​. One factor of the methodology​, customer experience, uses CFPB complaints to determine how satisfied customers are with their credit cards.

    Of the 18 credit card companies U.S. News reviewed, the issuers offering the best customer experience included American Express, BB&T and JPMorgan Chase.​ ​

    To control for differences in the size of credit card issuers (banks and credit unions that offer credit cards)​, U.S. News divided the number of customer complaints filed for each issuer by the issuer's annual purchase volume in 2014. (The purchase volume, or total dollar amount of credit card transactions, was used as a size proxy, since most issuers keep customer base data private​.) The data revealed that issuers receiving a relatively large number of complaints seem to respond to complaints in a way that satisfies customers, on average, whereas issuers with relatively few complaints seem to ​respond in a way that dissatisfies customers.​

    Therefore, if customer service is important to you, you may want to consider a card with one of the credit card companies at the top of this chart:

    Best Credit Cards chart.

    Our analysis suggests complaint resolution is a high priority for creditors with a large number of customers. For example, JPMorgan Chase has over 64 million credit card customers and ranks No. 3 on U.S. News' list for customer satisfaction. Last year, the CFPB received 1,609 credit card complaints concerning Chase. While the agency requires issuers to acknowledge customers' complaints within 15 days and resolve them within 60 days, Thomas Horne, head of customer service and card operations for JPMorgan Chase​, says a team of Chase employees attempt to resolve complaints within 24 hours. Afterward, the team will take a customer complaint and "tear it apart," Horne says. "We recreate whatever the interaction was that caused a problem with a customer or a complaint ... and then figure out what we need to do differently to get better."

    The Top Consumer Complaints​

    The CFPB, created in 2011 by the Dodd-Frank Wall Street Reform and Consumer Protection Act, launched the Consumer Complaint Database in June 2012. The goal is to collect consumer complaints and then work with the companies under fire to resolve the issues. As of July 1, 2015, the CFPB has received roughly 650,700 complaints about financial products. The most common complaints concern mortgages (28 percent), debt collection (25 percent), credit reporting (15 percent) and credit cards (11 percent).​

    Since it started collecting complaints in July 2011, the CFPB has received nearly 73,600 credit card complaints. As of last month, the CFPB has published over 51,500​ credit card complaints in the public database, which only lists complaints companies have had an opportunity to respond to.​ Consumers filing a credit card complaint can choose among 30 issues​. Excluding the "other" category, the top issues filed since 2011 include billing disputes with 8,519 complaints; identity theft, fraud or embezzlement with 4,278 complaints; and APR or interest rate with 3,891 complaints.

    For consumers experiencing a problem with a credit card company, the first step is to have a conversation with the company and try to resolve it, says Bruce McClary, spokesman for the National Foundation for Credit Counseling. If you're not making progress with the creditor, the CFPB can step in as a third party to help​. "It's important for people to take action to resolve problems quickly before they become difficult to unravel and cause permanent financial damage," McClary warns.

    So what can you do if you're facing one of these common consumer complaints? U.S. News talked with credit card experts to get their advice.

    Billing Disputes

    Last year, the CFPB received 2,411 billing dispute complaints. Controlling for creditor size, U.S. News found PNC Bank had the least number of billing dispute complaints, followed by American Express and JPMorgan Chase in 2014.
    "Billing errors can be costly to the consumer," McClary says. "The sooner those things are fixed, the better off the consumer is going to be."

    When reporting a billing error, the burden of proof is on you. McClary says consumers should gather records, including receipts, billing statements and other documents that can validate a claim. "If they're missing any of that, the chances are they may not find satisfaction in how the creditor responds," he says. The records should be sent with a letter that states the date, your name, address, account number, amount in dispute and why you believe it is an error. (See the Federal Trade Commission's sample letter here.)​

    Under the Fair Credit Reporting Act, consumers have a right to dispute charges and not have it​ impact their credit report​. Gail Hillebrand, CFPB associate director for consumer education and engagement​, advises consumers to contact their credit issuer immediately when they spot an erroneous charge​. "Once you have done that, the company cannot charge you while they are investigating," she says, adding that the issuer can't take adverse action like report your unpaid charge to a credit bureau. (You do, however, need to pay any charges on your bill you did make.​)

    A creditor must resolve a dispute within two complete billing cycles of being notified, and the payment suspension ends once a decision is made. if the creditor determines the charge was a mistake, it must credit your account and explain any corrections in writing. If the creditor dismisses your dispute, it must also explain the decision in writing, and you will have to pay the amount owed.

    ID Theft, Fraud and Embezzlement

    At 1,418 complaints, ID theft, fraud and embezzlement represent the second-highest complaints to the CFPB last year. In the U.S. News analysis, the companies that handled the least number of these complaints when controlling for size were American Express, JPMorgan Chase and USAA Savings.

    There are two kinds of ID theft that spur​ credit card complaints: when someone uses a victim's existing credit card and when someone applies for a new credit card using a victim's personal information. "Consumers are fairly well protected when identity theft leads to either of those situations because, under federal law, they have the right to dispute credit card charges they have never authorized," says Susan Grant, director of Consumer Protection and Privacy at the Consumer Federation of America.

    However, if a thief runs up charges on your credit card, and those charges go unpaid, it can damage your credit report. "Those are not necessarily the hardest problems to resolve on your credit report," Grant says, "but it can be time-consuming and aggravating for consumers to get errors on their credit reports fixed."

    To ensure you haven't fallen victim to ID theft, you can order a free copy of your credit report each year from AnnualCreditReport.com, and check it for any accounts you don't recognize. Hillebrand also suggests reviewing your monthly credit card statements. "With online banking, it's really easy to pay your bill without ever looking at your statements, so we encourage people to take that extra step," she says.

    If you are a victim of ID theft or fraud, it's important to contact your credit card issuer directly. McClary points out that reporting it first to the CFPB would "insert another layer of communication that could actually delay resolution rather than expedite it." And time is of the essence when it comes to ID theft and fraud. "The later you wait, the less your chances of having things resolve," McClary says, and that could cause "collateral damage to your credit score that can have implications for years."

    Once you report ID theft, the creditor should close your account, issue a new card and credit​​ any fraudulent charges. "If you don't hear from them within 24 hours after submitting the report, follow up," McClary says. If the creditor doesn't resolve the problem in a timely manner, Grant says that's when consumers should file a complaint to the CFPB.

    There's no need to report ID theft to the CFPB if the credit card company resolves the problem. However, Grant recommends reporting the issue to the FTC at IdentityTheft.gov because the information helps law enforcement. "If, for instance, they are investigating what appears to be a criminal ring involving identity theft, the information about your particular situation about the ID theft could be useful, regardless of the fact that you already resolved it with the issuer," she says.

    APR or Interest Rate

    Coming in third, the CFPB received 851 complaints about interest rates and APRs (interest charged on credit card balances not paid in full) last year​. Controlling for size, American Express had the least number of APR and interest rate complaints, followed by BB&T and Navy Federal Credit Union.

    McClary says consumers are likely disputing interest rate increases or denials of lower interest rates they requested. Horne of JPMorgan Chase puts it bluntly: "People just don't like to pay interest, so at times, that will be the driver of a complaint."

    As long as you pay your bills on time, your interest rate won't hurt your credit. "If you didn't get the interest rate you'd expect, it might be costing you more than you wanted to pay, but it doesn't affect your credit history," Hillebrand says.

    To avoid getting hit with an unexpected APR, McClary advises reading a credit card agreement before signing up. Similarly, you should also review fees, including balance transfer and cash advance fees, which are among the least common CFPB credit card complaints. "Understand how the fees work and when it's appropriate for a creditor to charge a fee," McClary says. "Somebody might be blindsided by one of these fees, not because the fee shouldn't be charged, but because it was something they weren't aware of, and they didn't read the details of their credit card agreement."

    When Filing a Credit Card Complaint

    Have a problem with your credit card company you want to resolve? Follow these tips:

    1. Gather records. When filing a complaint, you need documentation to back it up. "Especially when it comes to billing errors, fees charged, incorrect reporting to credit bureaus, identity theft [and] credit fraud, you need to have as much documentation as you can in order to get the best result," McClary says.

    2. Document conversations. "In a lot of cases, people make a phone call, and they'll talk to a customer service person without putting the complaint in writing," McClary says. "That leaves a gap there for things to fall through the cracks." He recommends documenting your conversation with the representative and sending a copy detailing the conversation and date to the creditor via mail. If you send it by email, check the box that requires recipients to confirm they opened the message. "This shows them you're keeping track of things, and that helps move the needle," he says.

    3. Seek help from a third party. If the credit card issuer has not solved the issue, you have a few options: You can file a complaint to your state attorney general's office or department of financial services, which both review complaints about financial products. "[But] the best route beyond going directly to a creditor would be the CFPB," McClary says. You can file a complaint to the CFPB at consumerfinance.gov/complaint.

    "If [consumers] don't get satisfaction, then they find us," Hillebrand says. "... We do hope over time to see more companies handling these complaints themselves, so their consumers don't have to come to us."

     

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    Financial, charts and numbers
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    By Dr. Penny Pincher

    Understanding a few basic numbers can give you a good picture of your financial health and help you plan your future. You may have seen these terms mentioned in personal finance articles and in the news. Learn what these numbers mean and how to use them to improve your money situation.


    1. Net Worth


    Net worth is the most important measure of your overall financial health. The calculation of net worth is simple - in short, subtract everything you owe from everything you have:

    Net Worth = Total Assets - Total Liabilities

    Assets include all property you own (including cars, a home, etc.), savings, investments, and the money in your checking account.

    Liabilities include credit card debt, student loan balances, mortgage balance, auto loan balances, and other debt. It is possible to have negative net worth if your liabilities exceed your assets - this is a common situation for new college graduates who have student loan debt and few assets, for example.

    There are two ways to improve your net worth: Increase your assets, or reduce your debt. Do both simultaneously, and you'll be on your way to improving your financial health quickly.


    2. Home Equity


    Home equity is a measure of how much of your home you own based on its current value, including improvements and appreciation. Here's how to calculate your home equity:

    Home Equity = Current Market Value of Your Home - Mortgage Balance

    You can see that the calculation of home equity does not include the price you paid for your house. Home equity depends only on the current market value of your home - in other words, how much would it sell for today?

    As with net worth, home equity can also be negative in some situations. If your home value declines to less than your mortgage balance, you have negative home equity. This is also known as an "underwater mortgage."

    A great way to increase home equity is by doing your own home improvement projects and repairs that increase the value of your home by more than the cost of doing the improvements.


    3. Gross Income


    Gross income is your total income before taxes and withholdings. If you are an employee, taxes and withholdings are taken out before you get each paycheck. You can find your gross income on your paystub.

    Most salary offers and salary statistics are given in terms of gross income. This is also the number that you report on income tax forms. Gross income can be confusing for budget planning, since you'll never really have this much money to spend. Use your net income instead.


    4. Net Income


    Your net income is how much money you get after taxes and withholdings are taken out. This is an important number because this is how much money you have available to work with to pay bills and to save and invest.


    5. Market Salary


    Market salary is how much you are worth in the labor market, depending largely upon your length of job experience, education, and location. Your market salary may not be equal to your actual salary if you are overpaid or underpaid. You can find your estimated market salary on survey websites (such as Salary.com).

    It is useful to know your market salary to bargain for a raise or to know when it would be worthwhile to look for a higher paying job.


    6. Monthly Expenses (Burn Rate)


    Monthly expenses (burn rate) is one of the most important financial numbers, and one that you have a lot of control over. This is the total of your expenses over a month, including housing, food, clothing, and transportation.

    Your burn rate is the amount you are actually spending each month, and there is always room to reduce this number to leave you with more money available to pay down debt or invest.


    7. Investment Balance


    Good for you if you are regularly contributing to investment accounts. Your investment balance is an important number since this will largely determine if and when you will be able to retire. Check it regularly to determine whether your investment strategy is meeting expectations.


    8. Dow Jones Industrial Average (DJIA)


    The Dow Jones Industrial Average is the stock market value that is most often reported in the news. This is calculated based on the value of a handful of large company stock prices and is currently around 18,000. The DJIA provides a general indication of the stock market's overall valuation and performance, and may give you a rough indication of how your stock portfolio is performing (assuming it's broadly diversified).


    9. Cash Balance


    Net worth does not reflect how much of your assets are liquid. For example, if all of your assets were invested in land holdings, you might have a hard time getting cash in a timely manner to buy food or pay your real estate taxes. Access to cash and other liquid assets (assets that can be sold rapidly to get cash) is important to be able to pay expenses.

    When I ran a small business, I learned that the three most important rules for success were:
    1. Never run out of cash;
    2. Never run out of cash; and
    3. Never run out of cash.
    These three rules apply to personal finance, as well. Make sure to have some cash available at all times to cover expenses that come up.


    10. Emergency Fund Balance


    Building an emergency fund is a step that many financial planners recommend for people trying to get out of debt. Putting cash into an emergency fund provides a cushion against using credit cards to cover unexpected bills. This practice also establishes the habit of saving money from every paycheck instead of spending it all.

    How much money do you have available to handle an emergency without running up debt? Experts recommend a minimum of three to six months worth of living expenses.


    11. Credit Card Balance and Interest Rate


    Many households carry a credit card balance. It is important to keep track of all debt, but credit card debt is especially important, since it usually carries the highest interest rates of any debt, and since it is easy to increase your debt without noticing.

    If you are paying a high interest rate on your credit card debt, save money by making a balance transfer to a card with a lower interest rate. Try to reduce expenses so you will be able to pay off credit card balances faster. (See also: Best 0% Balance Transfer Credit Cards)


    12. Monthly Nut


    I encountered this unusual term in an entrepreneurship course back in my college days. Your monthly nut is the minimum amount of money you would need to make it through a month. Your monthly nut includes basic housing, minimal food, and other essential expenses after unnecessary spending is eliminated.

    Your monthly nut is an important number to understand when you are planning to use as much of your income as possible to meet a goal, such as starting a business or getting out of debt as quickly as possible.


    13. Inflation Rate


    If you want to have enough money to buy the things you need in the future and throughout retirement, you'll need to account for the effects of inflation. Prices tend to rise over time, reducing the purchasing power of money in the future. Historical average for inflation rate is around 3%, but inflation rates in recent decades have varied from over 10% down to the current inflation rate of nearly 0%.

    For retirement planning, you will want to estimate your expenses, and then scale the expenses up based on the expected effect of inflation over the years.

    What key numbers do you track to monitor your personal finance health?

     

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    Existing U.S. Home Sales Rise to Second-Highest Since 2007
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    The hottest housing market to watch in the new year is not among those that regularly make the news for high demand and quick sales.

    Instead, Providence, Rhode Island, scored the top spot because it's "just now seeing signs of recovery based on substantially better economic conditions forecasted for next year," according to Realtor.com.

    The real estate website identified the United States' 10 most up-and-coming metropolitan markets for 2016 after predicting future values for home sales and prices for the 100 largest markets.

    In Rhode Island's capital, for example, existing home sales and median sale price are each projected to increase by 10 percent next year.

    Realtor.com chief economist Jonathan Smoke explains to CNN Money:
    "Providence is closely connected to Boston, which continues to show incredible economic growth. There is a quite a bit of positive spillover effect."
    Boston came in No. 10 on Realtor.com's hot list for 2016. Its existing home sales are projected to increase by 10 percent and its median sale price by 6.09 percent.
    Boston made the list for a different reason than Providence, however. Smoke explains on Realtor.com that several different underlying dynamics helped land cities in the website's top 10 for 2016:
    • Some markets have been hot and remain hot (San Diego, Sacramento, Boston, Atlanta).
    • Some markets are just now seeing signs of recovery based on substantially better economic conditions forecast for next year (Providence; New Orleans; Virginia Beach, Virginia; St. Louis).
    • Some markets are spillover markets from very hot markets (Providence; Sacramento, California).
    Most markets have one or more key demographic driving demand. Those key demographics are:
    • Older millennials (25 to 34 years old)
    • Younger members of Generation X (35 to 44 years old)
    • Retirees (65 to 74 years old)
    The top-ranked cities are:
    1. Providence, Rhode Island
    2. St. Louis
    3. San Diego
    4. Sacramento, California
    5. Atlanta
    6. New Orleans
    7. Memphis, Tennessee
    8. Charlotte, North Carolina
    9. Virginia Beach, Virginia
    10. Boston

     

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    Awash in Oil: The Impact of Falling Crude Prices



    U.S. stocks recovered from early losses on Monday to close higher, helped by firmer oil prices, as investors awaited an expected Federal Reserve interest rate hike later in the week.

    The S&P 500 benchmark index rallied in the afternoon after falling earlier in the session in a volatile trading day. Concerns about high-yield bonds, oil price swings and the Fed made for a skittish market, said Peter Costa, president of Empire Executions Inc.

    "It's a lot of uncertainty," he said.

    While investors widely expect the Fed to announce its first rate hike in nearly a decade on Wednesday, they are also waiting for commentary from policymakers about what will happen next.

    Traders see an 83-percent chance that the Fed will lift rates by 25 basis points, according to the CME Group's FedWatch program.

    The Dow Jones industrial average rose 103.29 points, or 0.6 percent, to 17,368.5, the S&P 500 gained 9.57 points, or 0.48 percent, to 2,021.94 and the Nasdaq Composite added 18.76 points, or 0.38 percent, to 4,952.23.

    The S&P energy sector was up 0.8 percent. U.S. crude oil settled up 1.9 percent after moving within a hair of 11-year lows, but analysts and traders said it is still too early to declare the market reached bottom.

    Although stocks closed higher, equity investors are still concerned about the high-yield bond market. Third Avenue Management LLC's junk bond fund collapsed last week and the company said Monday its chief executive agreed to leave.

    "It's just the fear of the unknown," said Angel Mata, managing director of listed equity trading, Stifel Capital Markets in Baltimore. "2008 - though it was seven years ago - is still fresh in everybody's mind and the fear is we could have a kind of situation that we had back then, which was driven by the fixed-income side."

    Nine of the 10 major S&P sectors ended the day higher.

    S&P materials were the only sector to show losses, down 1.4 percent, hurt by Dow Chemical and DuPont, which agreed on Friday to merge. DuPont shares were down 3.6 percent, while Dow Chemical fell 3.9 percent.

    Newell Rubbermaid was down 6.9 percent at $42.15. Newell, known for its food containers, agreed to buy Sunbeam and Coleman products maker Jarden Corp for more than $15 billion. Jarden was up 2.7 percent at $54.09.

    NYSE declining issues outnumbered advancing ones 2,326 to 810, for a 2.87-to-1 ratio on the downside; on the Nasdaq, 1,804 issues fell and 1,034 advanced, for a 1.74-to-1 ratio favoring decliners.

    The S&P 500 posted 2 new 52-week highs and 54 new lows; the Nasdaq recorded 18 new highs and 236 new lows.

    About 8.9 billion shares changed hands on U.S. exchanges on Monday, above the 7.03 billion average for the last 20 sessions, according to Thomson Reuters data.

     

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