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The Long, Slow Demise of Credit Card Signatures Starts Today

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Beginning last year, all four major US payment providers — Mastercard, Visa, American Express and Discover — announced plans to remove the requirement that merchants collect signatures for card transactions. Mastercard, American Express and Discover kicked off that new policy Friday, while Visa will do the same Saturday. CNET reports:

Don’t despair if you actually like writing your signature at retail stores, because their ultimate demise will likely take a while. The change is only optional, with merchants, not customers, given the new power to decide whether to get rid of signatures. So, if asked to sign, please don’t insist to your next cashier that you no longer need to — it won’t work. Also, plenty of retailers will likely want to keep signatures, particularly if their workers are paid based on a lot of tips, or they sell pricey items. Still, the change marks a clear awareness from payment providers that the signature doesn’t really work as a strong protector against fraud.

The change is being handled a little differently by each payment provider. For instance, Mastercard, Discover and American Express said they’ll let retailers make every kind of card payment optional for a signature, regardless of whether you’ve got a new chip card or you still swipe. Visa, meanwhile, isn’t changing its requirements for payments using a swipe card, but it did relax its policy for chip card and contactless payments like Apple Pay. Visa noted that over 75 percent of face-to-face transactions using its cards in North America already don’t require a signature, thanks to lower-value transactions.

Big Financial Loss May Shorten Your Life, Study Suggests

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According to a study released on Tuesday, April 3, 2018, middle-aged Americans who experienced a sudden, large economic blow were more likely to die during the following years than those who didn’t. The heightened danger of death after a devastating loss, which researchers called a “wealth shock,” crossed socio-economic lines, affecting people no matter how much money they had to start. Dayton Daily News reported:

Middle-aged Americans who experienced a sudden, large economic blow were more likely to die during the following years than those who didn’t. The heightened danger of death after a devastating loss, which researchers called a “wealth shock,” crossed socio-economic lines, affecting people no matter how much money they had to start.

The analysis of nearly 9,000 people’s experiences underscores well-known connections between money and well-being, with prior studies linking lower incomes and rising income inequality with more chronic disease and shorter life expectancy.

“This is really a story about everybody,” said lead researcher Lindsay Pool of Northwestern University’s medical school. Stress, delays in health care, substance abuse and suicides may contribute, she said. “Policymakers should pay attention.”

Overall, wealth shock was tied with a 50 percent greater risk of dying, although the study couldn’t prove a cause-and-effect connection. The study was published Tuesday in the Journal of the American Medical Association.

John Bogle Net Worth

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Net Worth: $80 Million
Age: 89
Born: May 8, 1929
Source of Wealth: Investor, Business Magnate
Known For: Founding the Vanguard Group
Last Updated: 2018

Introduction

John C. (Jack) Bogle is the founder and retired chief executive of the Vanguard Group. He created the world’s first retail index mutual fund. Bogle also wrote several classic finance books including The Little Book of Common Sense Investing and Enough: True Measures of Money, Business, and Life.

John Bogle has many followers and admires at personal finance and investing website Bogleheads.org. Followers of John Bogle’s investment philosophy admire him not just for his eloquence in tirelessly speaking and writing about the importance of fees and advantages of indexing, but in his conscious decision in the creation of The Vanguard Group not to enrich himself at the expense of consumers.

Early Life

John (Jack) Bogle was born on May 8, 1929 in Verona, New Jersey. During the Great Depression, his family had to sell their home when they lost the inheritance. Bogle attended Manasquan high school on the New Jersey shore and transferred to the prestigious Blair Academy on work scholarships.

In 1947, Bogle graduated from Blair Academy cum laude and got accepted to Princeton University where he decided to study economics and investment. During his university years, Bogle was determined to examine the subject of mutual fund industry that had not been analyzed before. Bogle spent his junior and senior year working on his thesis “The Economic Role of the Investment Company”. Bogle graduated from Princeton University magna cum laude in Economics in 1951. [Read more…]

Over 90% of Active Stock Pickers Can’t Beat Index Funds

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More evidence that it’s very hard to beat the market over time, 95% of finance professionals can’t do it. Mark J. Perry writes on American Enterprise Institute: “The percentage of active managers who do beat the market is usually pretty small – fewer than 8% in most of the cases above over the last 15 years; and they may not sustain that performance in the future. For many investors, the ability to invest in low-cost, passive, unmanaged index funds and outperform 92% of high-fee, highly paid, professional active fund managers seems like a no-brainer, especially considering it requires no research or time trying to find the active managers who beat the market in the past and might do so in the future.”

S&P Dow Jones Indices, the ‘de facto scorekeeper of the active versus passive investing debate,’ recently released its SPIVA U.S. Year-End 2017 report. Here’s an overview of the SPIVA Scorecard:

There is nothing novel about the index versus active debate. It has been a contentious subject for decades, and there are few strong believers on both sides, with the vast majority of market participants falling somewhere in between. Since its first publication 16 years ago, the SPIVA Scorecard has served as the de facto scorekeeper of the active versus passive debate. For more than a decade, we have heard passionate arguments from believers in both camps when headline numbers have deviated from their beliefs.

During the one-year period, the percentage of managers outperforming their respective benchmarks noticeably increased in categories like Mid-Cap Growth and Small-Cap Growth Funds, compared to results from six months prior. Over the one-year period, 63.08% of large-cap managers, 44.41% of mid-cap managers, and 47.70% of small-cap managers underperformed the S&P 500, the S&P MidCap 400, and the S&P SmallCap 600, respectively.

While results over the short term were favorable, the majority of active equity funds underperformed over the longer-term investment horizons. Over the five-year period, 84.23% of large-cap managers, 85.06% of mid-cap managers, and 91.17% of small-cap managers lagged their respective benchmarks.

Similarly, over the 15-year investment horizon, 92.33% of large-cap managers, 94.81% of mid-cap managers, and 95.73% of small-cap managers failed to outperform on a relative basis.

20% of Americans Save Nothing for Retirement

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Despite a low unemployment rate and stronger economy, 20 percent of Americans don’t save any of their income at all and even those who do save aren’t putting away enough for retirement. According to a new survey from Bankrate.com, one-fifth of Americans are adding nothing to their savings. Among respondents, 2 in 5 cite life’s high expenses, while another 1 in 6 blame their crummy job.

“With a steady, significant share of the working population saving nothing or relatively little, it’s virtually guaranteed that they’ll be unable to afford a modest emergency expense or finance retirement,” says Bankrate senior economic analyst Mark Hamrick. “That amounts to a financial fail.”

Bankrate also reports that the average American has less than $5,000 in a financial account, a quarter to a fifth of what you should have, and those aged 55 to 64 who have retirement savings only carry $120,000 – which won’t last long in the absence of paychecks.

Free Credit Freezes Coming for All U.S. Consumers

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Consumers are on track to get one thing from Congress in response to last year’s massive Equifax Inc. hack: free freezes of their data held by the credit-reporting companies. The Wall Street Journal reported:

“The bipartisan agreement, set to be approved in the Senate by next week as part of a broader banking bill, would require credit-reporting companies to let consumers block access to their credit reports to potential lenders without paying a fee. Freezing access to credit data is a crucial measure consumers can take if they want to protect themselves.”

 

 

If You’re So smart, Why Aren’t You Rich?

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The distribution of wealth follows a well-known pattern sometimes called an 80:20 rule: 80 percent of the wealth is owned by 20 percent of the people. Indeed, a report last year concluded that just eight men had a total wealth equivalent to that of the world’s poorest 3.8 billion people. Why should so few people have so much wealth?

Turns out getting rich is just chance. The wealthiest individuals are not the most talented. They are the luckiest. MIT Technology Review reported:

The conventional answer is that we live in a meritocracy in which people are rewarded for their talent, intelligence, effort, and so on. Over time, many people think, this translates into the wealth distribution that we observe, although a healthy dose of luck can play a role.

But there is a problem with this idea: while wealth distribution follows a power law, the distribution of human skills generally follows a normal distribution that is symmetric about an average value. For example, intelligence, as measured by IQ tests, follows this pattern. Average IQ is 100, but nobody has an IQ of 1,000 or 10,000.

Today we get an answer thanks to the work of Alessandro Pluchino at the University of Catania in Italy and a couple of colleagues. These guys have created a computer model of human talent and the way people use it to exploit opportunities in life…

The computer model charts each individual through a working life of 40 years. During this time, the individuals experience lucky events that they can exploit to increase their wealth if they are talented enough. However, they also experience unlucky events that reduce their wealth. These events occur at random…

When the team rank individuals by wealth, the distribution is exactly like that seen in real-world societies. “The ‘80-20’ rule is respected, since 80 percent of the population owns only 20 percent of the total capital, while the remaining 20 percent owns 80 percent of the same capital,” report Pluchino and co.

New and Free Way to Find Jobs on Facebook

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In a move to compete with LinkedIn, Facebook is rolling out facebook.com/jobs to help people find jobs and help local businesses hire the right people with the ability to apply to jobs directly on Facebook.

Facebook already introduced job postings on Facebook in the US and Canada last year. Today, it expands the service to apply to jobs directly on Facebook to more than 40 countries.

Finding a job is quick, easy and free. You can find jobs in the Jobs dashboard at facebook.com/jobs and the “Jobs” option in the “Explore” section on mobile, by clicking the Jobs icon in Marketplace, or visiting the Jobs tab of a business’ Page. When you’re ready to apply for a role, you can create an application, which will populate with job history and other information in your Facebook profile. You can edit your application before you submit it. Once you finish applying, a Messenger conversation will open with the business’ Page so you can have direct contact with the employer and confirm when your information has been received.

Meanwhile, businesses can attract the right applicants and hire quickly, easily and affordably by posting job openings to a Jobs tab on their Page with details like job title, job type (full-time, intern, part-time), salary and more. Job posts will appear in multiple places on Facebook, including on a business’ Page, in the Jobs dashboard, in Marketplace, and in News Feed. Job posts can appear in News Feed similar to other Page posts, and businesses can choose to boost posts to reach the right candidates. Businesses can also manage their applications and communicate with applicants, including scheduling interviews and sending automated reminders, directly through Messenger.

1 in 5 Americans Have More Credit-Card Debt Than Savings

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Some Americans’ finances are on very thin ice. One in five Americans say they have more credit-card debt than they do in emergency savings, according to a report published Thursday from the personal-finance company Bankrate. Another 12% said they had no credit card debt, but they also had no savings. Bankrate surveyed 1,000 people during early February. Maria LaMagna writes on MarketWatch:

But the report isn’t all bad news. More than half (58%) said they had more in emergency savings funds than in credit-card debt, the highest percentage Bankrate has ever had, tied with the amount who said this in 2015.

Financial experts typically recommend that all consumers have three to six months’ worth of expenses saved in an easy-to-access emergency fund, to guard against any unexpected expenses. Bankrate did not ask exactly how much those surveyed had saved…

Consumers trying to build an emergency fund should set up an automatic savings plan, said Greg McBride, chief financial analyst at Bankrate. That will put a certain percentage of their paycheck into a savings account. After determining the amount they can put in that fund for each paycheck, they can then pay debt with whatever funds they can spare in their budget.

“Saving is all about establishing a habit,” he said.

Home Prices Hit Records

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Home prices jumped to all-time highs in almost two-thirds of U.S. cities in the fourth quarter as buyers battled for a record-low supply of listings. Bloomberg reports:

Prices for single-family homes, which climbed 5.3 percent from a year earlier nationally, reached a peak in 64 percent of metropolitan areas measured, the National Association of Realtors said Tuesday. Of the 177 regions in the group’s survey, 15 percent had double-digit price growth, up from 11 percent in the third quarter.

Home values have grown steadily as the improving job market drives demand for a scarcity of properties on the market. While prices jumped 48 percent since 2011, incomes have climbed only 15 percent, putting purchases out of reach for many would-be buyers.

The consistent price gains “have certainly been great news for homeowners, and especially for those who were at one time in a negative equity situation,” Lawrence Yun, the Realtors group’s chief economist, said in a statement. “However, the shortage of new homes being built over the past decade is really burdening local markets and making homebuying less affordable.”

What Are The New Trends In Health Insurance

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Medical insurance is a huge topic. It was talked about continually during the presidential election in the United States. However, we have not seen any significant changes yet. 2018 promises changes. However, experts warn us not to expect all of the changes to be positive.

What the future holds

Citizens and companies are in a holding pattern. During the recession, many people lost their jobs. Others were kept on but their hours were reduced to allow the companies to take advantage of them to the maximum point before they would be eligible for full benefits.

There was a big swing in people going back to school, and gaining training to make them more valuable. Though the recession seems to be over, experts warn another may come very soon. People are being selective about the positions they take. They refuse to be underpaid and seek positions that will be less likely cut if the recession hits again.

Benefits offered to employees is equally as important to them as their salary. The average citizen had no idea how financially difficult it would be when we suddenly faced double and triple insurance premiums, extremely expensive co-pays and deductibles, and in some cases, the loss of company shared insurance expenses altogether.

Companies are staggering and trying to get to their feet to be in the position to attract good people. If a company has less than 50 employees they usually opt for insurance policies with high deductibles. But, by law, they do not have to offer health coverage. Companies with more than 50 employees must offer “acceptable” insurance and they are expected to pay at least ½ of the premium.

Trends for 2018

  • More Increases in health insurance rate. In 2017, insurance premiums went up dramatically in 2017. They will continue to rise. The increases vary from state to state. Some show a rise of 6%-7% and others show increases well into the double digits.
  • Companies will have to balance the premium increase with the need of retaining good employees. This will mean a narrowing of the illness coverages.
  • There will be a major drop in prescription drugs (more than 80) that are covered in 2018. There will be some that have generic replacements. You should check with your insurance company to see how this affects you, Here is a list of drugs that are being dropped from coverage.

  • More use of technology. Expect chronic patients to have more virtual care. Technology will be more available to interact with their doctors without the need of going to the office. Use of devices to monitor their health through virtual means. The goal is to reduce the amount of money it cost to help them maintain.
  • Use of technology to allow doctors to work without having to document everything that is said. You surely have noticed that doctors today show up in your examination room with a laptop computer. They are typing away as you describe your concerns. They have to do this because they simply do not have the time to see their patient load and document everything. Soon, doctors will be able to wear a special pair of goggles which will streamline the visit to a data center which will create the documentation. This is a highly efficient method which will save the doctor money and lower costs of visits.

These are just some of the trends showing up just in time for the new year. If this is all a bit confusing to you, this can help you. There is much work to do. It is clear that the rise in health care costs is a critical issue. There must be a ceiling on the rise in costs. American workers need healthcare they can afford. We are all waiting for Congress to make healthcare affordable and health service better. Maybe this will be our lucky year.

Protect Your Finances From Mortgage Scams

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America is being hit hard by mortgage scams and, shockingly, many individuals make the initial contact with the scammers as they seek help on the internet. Buying a house is one of the biggest financial investments an individual will make in their lifetime, and obtaining a mortgage in order to secure your dream home can be difficult. This is why con artists target vulnerable individuals who yearn to get the keys to their own property. The internet is awash with scams, including identity theft, pension, banking, social media money scams, and mortgage scams to name a few.

Common mortgage scams

Mortgage scams come in many forms. One of the most common is refinancing scams where people are targeted or enticed to contact a scammer following notification of a not-to-be missed great deal. Often, a low interest rate is offered or the deal is offered for a short time only. This is to emotionally target individuals and ensure a quick response time. However, the information the victim is asked to provide can then be used by the scammers to commit identity theft.

An even scarier scam which involves a homeowner losing their home is deed theft. This scam involves fraudsters posing as professional mortgage advisors and attorneys who get you to sign your ‘new’ mortgage terms and conditions. However, hidden somewhere amongst all the paperwork will be a transfer of deeds document.

Reverse mortgage scams

Reverse mortgage scams have been designed by thieves to scam some of the most vulnerable people in society; the elderly. The two most common types of reverse mortgage scams are equity theft and foreclosure rescue. A recurring feature of reverse mortgage scams is deception. The thieves will say and do whatever is required to lure money from or to take an elderly individual’s property off them.

Other types of mortgage fraud

Mortgage fraud is something which is also committed by individuals applying for a mortgage application. By deliberately providing false information on their application, they increase their chances of obtaining a loan. In one case, a Florida man was handed a two year prison sentence and ordered to pay $960,020 after being found guilty of inflating his income, understating his liabilities and denying he’d filed for bankruptcy.

How to protect yourself

The best way to protect yourself from mortgage fraud is to stay educated and to trust your gut instinct. If an offer lands on your doorstep or email inbox which appears too good to be true, then it probably is, even if it appears to have come from one a well known financial institution. Never contact the phone number or email address on a unexpected piece of communication from your lender. Instead, use a contact number or address which you’ve contacted them on previously.

Mortgages are great financial products which offer so many people the opportunity to own their own home. However, there are individuals out there willing to shatter people’s dreams and take it all away from them. Therefore, it’s important to stay savvy and be on your guard when it comes to anything mortgage related.

Easy and Cheap Way to Be Happy: Think Like an Old Person

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Want to be happy without spending a boatload of money? Think like an old person. The New York Times reported:

Older people report higher levels of contentment or well-being than teenagers and young adults. The six elders put faces on this statistic. If they were not always gleeful, they were resilient and not paralyzed by the challenges that came their way. All had known loss and survived. None went to a job he did not like, coveted stuff she could not afford, brooded over a slight on the subway or lost sleep over events in the distant future. They set realistic goals. Only one said he was afraid to die.

Gerontologists call this the paradox of old age: that as people’s minds and bodies decline, instead of feeling worse about their lives, they feel better. In memory tests, they recall positive images better than negative; under functional magnetic resonance imaging, their brains respond more mildly to stressful images than the brains of younger people.

John Sorensen, who liked to talk, brought cheer to every conversation, even those about wanting to die. Helen Moses and Ping Wong knew exactly what they wanted: for Ms. Moses, it was her daughter and Mr. Zeimer; for Ms. Wong, it was mah-jongg and the camaraderie it entailed, even if the other players spoke a different dialect or followed the rules of a different home region. Mr. Jones, Ms. Willig and Mr. Mekas all spent their energy on the things they could still do that brought them satisfaction, not on what they had lost to age.

Steps Involved In Financial Planning – Things You Need to Know

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Planning for your finances, both presently and for the future, involves a lot of thinking, analyzing and understanding. It’s never just a quick and easy process; it involves a combination of a series of steps and measures taken so that you can move closer to your future financial goals. You have to ask yourself “Where do I see myself financially in the next 30 years?”.

When you have a family, your plans become even more detailed and well-defined, because you have more than one goal to keep in mind.

The following infographic from financialplanningplatform.com highlights and further helps with understanding the different stages of planning for a secure financial future:

Life Stages of Investment

Step one starts off with your education, right from high school and all the way till you complete your university studies and/or any special courses. Banks and private institutes offer a variety of schemes for grants and student loans that can help you fund your education if you don’t have any other savings kept aside.

Step two involves launching yourself out of education mode and into career mode. In a very competitive and dynamic world, choosing the right career path for yourself is crucial. You must chart out your options and make sure that your goals and career plans are aligned. Your career is what ultimately fuels your financial security, and funds your future investments. This is where you build your foundation, and make it sturdy for your future plans.

The next phase involves starting your own family and deciding to settle down. This is when your responsibilities increase and so does your need to have a more secure financial future. Hence, you start looking at insurance policies, home loans, life insurance, health coverage schemes and so on. Your main aim is security and safety for both you and your family members. Getting older involves more risks and liabilities, and the best thing to do is to protect yourself from any impending issues.

As your kids grow older, so do your expenses. It becomes your responsibility to help them secure a safe and valuable education like you did, and prepare them for future endeavors. College savings plans like 529 plans and other schemes assist you with keeping a stipulated sum of money aside for their educational needs and expenses. This also helps with training your kids on the importance of financial planning and keeping money aside for future benefits and goals.

Growing older also takes a toll on your health, and brings you closer to retirement. Hence, it’s your duty to make sure that you have a comfortable and satisfied life when you decide to retire. The best way to do this is to invest in a safe and smart retirement plan, right from your middle age. While spending your money and enjoying it is also important, investing in lucrative savings plans also allows you to live without any worries in your old age. The whole idea behind financial planning for the future rests on the fact that a penny kept aside now could turn into a much more valuable dollar in the future. So, start planning now, because your money only grows more valuable and important with time.

Author Bio: Adam Niel is an editor at Financial Planning Platform where you can find the best financial advisors in California. He writes about how you can practice effective financial spending habits for a more fulfilling and consistent lifestyle for you and your loved ones.

Richest One Percent Made 82% of Wealth Created Last Year

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The gap between the super rich and the rest of the world widened as wealth continued to be owned by a small minority, according to Oxfam report.

The world’s richest one percent raked in 82 percent of the wealth created last year while the poorest half of the population received none, Oxfam said Monday, as the world’s elite prepared to mingle at the World Economic Forum in Davos.

A new report from the charity also found that the wealth of billionaires has grown six times faster than that of ordinary workers since 2010, with another billionaire minted every two days between March 2016 and March 2017.

The report, titled “Reward Work, not Wealth”, used data from Credit Suisse to compare the returns of top executives and shareholders to that of ordinary workers.

It found that chief executives of the top five global fashion brands made in just four days what garment workers in Bangladesh earn over a lifetime.