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General Motors, Sears and Toys R Us: Layoffs Across America Highlight Our Shredding Financial Safety Net

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Millions of Americans are in danger of entering their final decades unable to afford ballooning medical bills and cost-of-living expenses. NBCNews reports:

Today’s aging workforce faces an uncertain future. The announcement this week that General Motors will lay off 15 percent of its salaried workforce and shutter multiple plants in North America was a sobering reminder of how far the American worker has fallen. Unlike most large private sector corporations today, thousands of employees at GM still enjoy some union benefits. The company has reportedly set aside $2 billion for layoffs and buyouts. It’s not much, but it’s something — many workers, if they are laid off en masse, will be far less lucky. Some older Americans are lucky enough to have been grandfathered into generous pension plans and others hope social security and personal savings will be enough to sustain themselves. But for millions of younger people, the outlook is bleaker — an ever-diminishing social safety net, with retirement dependent almost entirely on how well they manage savings. Two-thirds of millennials have nothing saved for retirement.

The private sector pension as we once knew it is all but dead. Public sector pensions, meanwhile, are under attack at the state level. “Companies don’t offer pensions anymore. Social security, when it was established, was meant to be one leg of a stool,” says Gerald Friedman, an economist at the University of Massachusetts at Amherst. “One leg would be the private pension through employment, a second leg personal savings, and a third leg social security. Social security is now the only source of income of a lot elderly have.” What, if anything, are our politicians doing about this? Progressives rail against President Donald Trump, but real retirement security has not been a big enough part of the conversation on either side of the political spectrum. Millions of Americans are in danger of entering their final decades unable to afford ballooning medical bills and cost-of-living expenses. This is a huge problem, and one that liberals in particular should have capitalized on this election cycle.

Your Credit Score to Predict Chances of Self Sufficiency?

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Your Credit Score Isn’t a Reflection of Your Moral Character. But the Department of Homeland Security seems to think it is. What kind of person racks up debts and doesn’t pay them? Your credit score is an attempt to answer this question. Slate reports:

These important three-digit numbers summarize our statistical risk for lenders. The allure of the credit score is its clarity: It cuts through appearances and converts our messy lives into an easily readable metric. The difference between a score of 750 and 600 is obvious. One is an excellent bet for a lender to make; the other is not. On balance, credit scores have made borrowing more convenient, and fairer, for consumers.

But the U.S. Department of Homeland Security wants to use credit scores for an entirely different purpose, one they were never built for and are not suited for. The agency charged with safeguarding the nation would like to make immigrants submit their credit scores when applying for legal resident status.

The new rule, contained in a proposal signed by DHS Secretary Kirstjen Nielsen, is designed to help immigration officers identify applicants likely to become a “public charge”—that is, a person primarily dependent on government assistance for food, housing, or medical care. According to the proposal, credit scores and other financial records (including credit reports, the comprehensive individual files from which credit scores are generated) would be reviewed to predict an applicant’s chances of “self-sufficiency.” The proposal is open for public comment until Dec. 10.

Thanksgiving E-commerce Spend To Top $3.5B, Mobile Accounting For One-Third of Sales

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The 2018 holiday season is predicted to be a bumper year for e-commerce, helped by economic forces like lower unemployment and underlying trends like an ever-growing proportion of shoppers opting to spend their money online, and specifically on mobile devices. TechCrunch reports:

Thanksgiving, a day when brick-and-mortar stores tend to be closed, is a big one for online spending, and so far it’s off to a flying start. Adobe, which puts out real-time analytics tracking e-commerce sales, said that as of 10am ET, $406 million had already been spent online today — growth of 23.2 percent on 2017. Adobe tracks e-commerce transactions across 80 of the top 100 US online retailers and says its analytics are based on over 1 trillion visits to retail sites and 55 million SKUs.

At this rate, Adobe said it believes that sales today will total a record $3.5 billion, versus $2.9 billion a year ago. Notably, this is revised up from figures Adobe put out earlier this month, when it projected $3.1 billion in sales today. It’s the first day of the “big five” for holiday shopping. Figures from Internet Retailer research predict that the total amount that will be spent over the period between Thanksgiving and Cyber Monday will be $21.6 billion. While rising tides might lift all boats, the biggest will reap the most rewards: it estimates that Amazon will account for nearly one-third of all sales.

28% of Christmas Shoppers Still in Debt from Last Year

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Almost 3 in 10 shoppers are going into the holiday season still carrying debt from last year’s festivities. CNBC reports:

For some people, opening up a credit card statement is like a visit from the Ghost of Christmas Past.

Holiday shoppers are expected to spend generously this year, with the National Retail Federation estimating the average consumer’s outlay at $1,007 for everything from gifts to food to holiday attire — a 4.1 percent increase from last year. Another analysis, from NerdWallet, anticipates an 18 percent jump on gift spending alone, to an average total $776.

But that doesn’t give the true picture of the cost: 28 percent of shoppers are entering this holiday season still paying off debt from last year’s festivities, according to NerdWallet.

Experts say that if you’re among those still lugging around debt from last year, now is a good time to pause and strategize, before Black Friday week sets off a long stretch of frenzied spending.

Vanguard Lowers Minimum for Admiral Shares of Index Funds to $3,000

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Vanguard Group is lowering the minimum amounts customers need to invest to get cheaper prices on more than three dozen of its index funds. The Wall Street Journal reports:

“The $5.3 trillion indexing giant’s move is the latest salvo in Vanguard’s push to lure investors from rivals at a time asset managers are under pressure to slash the costs of funds. Starting Monday, the firm is lowering the minimums for admiral shares—a share class that costs less than regular investor classes—to $3,000 from $10,000 for 38 index mutual funds. The funds make up the majority of Vanguard’s index funds that are available to individual investors and include some of the industry’s largest stock and bond index funds.”

Here’s what Vanguard officially announced: “Our index funds changed investing forever. Now we’re making them even better. We’re lowering costs for more than 1 million current index fund investors and giving new investors one more reason to choose Vanguard. To do that, we’re dropping the minimum investment for Admiral Shares on 38 index funds. Our Admiral Shares were previously available to investors with over $10,000 per fund. Now you’ll only need $3,000 to take advantage of the low expense ratios Admiral Shares offer. In turn, we’re eliminating higher-cost Investor Shares of those same index funds for individual investors.”

You Can Now Watch Free Movies with Ad-Supported on YouTube

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YouTube’s “Movies & Shows” page added a “Free to Watch” section last month. They’re trying to compete with free ad-supported online movie offerings from Roku, Walmart, and Tubi.

YouTube quietly added around 100 ad-supported Hollywood movies to its site. The titles include a mix of classics like “Rocky” and “The Terminator,” as well as other family fare like “Zookeeper,” “Agent Cody Banks,” and “Legally Blonde,” among others. TechCrunch reported:

Before, YouTube had only offered consumers the ability to purchase movies and TV shows, similar to how you can rent or buy content from Apple’s iTunes or Amazon Video.

Currently, YouTube is serving ads on these free movies, but the report said the company is open to working out other deals with advertisers – like sponsorships or exclusive screenings.

YouTube’s advantage in this space, compared with some others, is its sizable user base of 1.9 billion monthly active users and its ability to target ads using data from Google.

Here’s What Happens If No One Comes Forward for the Unclaimed $1.5 Billion Mega Millions Jackpot

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In late October, Mega Millions announced that someone had won its $1.5 billion jackpot. But weeks have passed and no one has come forward to claim the record-setting prize yet. CNBC reports:

“Everyone’s talking about it,” said Jee Patel, the manager of the KC Mart in Simpsonville, South Carolina, where the ticket was purchased. “It’s a mystery.”

The winner, who beat the odds of 1 in 302 million, gets 180 days, or until April 21, to collect before the ticket expires.

If the prize goes unclaimed by the deadline, according to the Mega Millions website, “each participating state in the Mega Millions game will get back all the money that state contributed to the unclaimed jackpot.”

Household Debt Hit a Record High of $13.5 Trillion Last Quarter

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The total debt shouldered by Americans has hit another record high, rising to $13.5 trillion in the last quarter, while an unusual jump in student-loan delinquencies could provide another signal that the nation’s economic expansion is growing old. Total household debt is now $837 billion higher than its previous peak, which was in 2008 before the recession. NBC News reports:

The world’s largest economy has grown well above potential this year on the back of strong consumer spending and the lowest unemployment rate since the 1960s. If growth continues for another year it will be the longest ever.

Total household debt, driven by a $9.1 trillion in mortgages, is now $837 billion higher than its previous peak in 2008, just as the last recession took hold. Such debt has risen steadily for more than four years and sits more than 21 percent above a trough in 2013.

The $219 billion rise in total debt in the quarter ended September 30 was the biggest jump since 2016.

Financial Literacy Isn’t a Skill — It’s a Lifestyle

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Financial literacy isn’t a skill — it’s a lifestyle. Take it from Curtis “Wall Street” Carroll. As an incarcerated individual, Caroll knows the power of a dollar. While in prison, he taught himself how to read and trade stocks, and now he shares a simple, powerful message: we all need to be more savvy with our money.

How to Succeed at Work by Empowering Yourself

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Harvey Coleman wrote Empowering Yourself: The Organizational Game Revealed. In the book, Coleman shows how to succeed at work. A poster on reddit shares a summary by Wendy Nemitz of “Empowering Yourself” as a way to leverage your career and influence.

Coleman divides the essential elements of success in the business world into three main elements, called the P.I.E. formula. ‘P’ is for performance, which Coleman suggests is 10% of the success formula. ‘I’ stands for image, which Coleman states is about 30% of success. ‘E’ is for exposure, which Coleman says is valued at 60% of his success formula.

Performance is the foundation of success. While Coleman says it is only 10% of success, without it you can’t move up.

  1. Your performance is a direct reflection on you. It is your entry ticket into the organization.
  2. Don’t boast too much about success. Don’t complain about the lack of success in others. Bragging and complaining are not the marks of winners.
  3. Take credit for your performance even if you are tempted to deflect it or are uncomfortable. Take compliments and praise gracefully.
  4. Understand that while performance is crucial, it is just part of the P.I.E. formula. Performance alone will not bring promotions.
  5. Be a team player but be willing to be the star player.
  6. Ask for help when you need it.
  7. Seek to improve the performance of others and of the whole company. Their success will reflect on you.
  8. Share information and help others. They will not forget.
  9. Technical skills are only part of performance. Both your task and your people skills affect your performance.
  10. If you are not thorough or detailed, get someone to help on issues like proofing. Pay attention to the details.
  11. Welcome performance reviews as a chance to improve.
  12. Set goals.
  13. Celebrate your accomplishments.
  14. Know your boss’s expectations and priorities and perform to them. It is no use to ignore the boss’s expectations and achieve your own. Make choices about what you spend your time on. Spend time on work priorities by first understanding what they are.

[Read more…]

Most Americans Aren’t Financially Healthy Despite Booming Economy, Survey Finds

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The economy is growing, unemployment is low and, lately, workers are starting to see some wage gains. But a new survey from USC and the nonprofit Center for Financial Services Innovation makes the case that, despite an overall healthy-looking economy, many Americans are struggling to save, pay bills and remain on firm financial footing. Los Angeles Times reports:

The survey, called the Financial Health Pulse, found that only 28% of American households are financially healthy, meaning they are in control of their spending, are saving money, don’t have too much debt and are planning for the unforeseen.

An additional 55% are financially coping — struggling in a few areas, but doing OK in others — while 17% are classified as financially vulnerable, meaning they are struggling with most aspects of their financial lives.

Jennifer Tescher, CFSI’s chief executive, said the goal of the survey, which the group plans to do annually, is to get a sense of how Americans are doing without relying on the kind of high-level economic data that policymakers typically focus on.

More Than One-Quarter of renters Can’t Cover a $400 Emergency

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More than one-quarter of U.S. renters in a survey are not confident they could cover a $400 emergency. Financial stress visits renters more than homeowners. That’s the main takeaway from a new report by the Urban Institute, a nonpartisan think tank in Washington. CNBC reports:

“Rental costs are rising much faster than renters’ salaries. Between 1960 and 2016, the median income for a renter grew by just 5 percent. During the same period, the median rent ballooned by more than 60 percent, according to The Joint Center for Housing Studies of Harvard University… Half of renters in the survey reported a material hardship in the past year, compared with one-third of homeowners. Around 18 percent of homeowners reported low emergency savings.”

IRS Increases Contribution Limits for Retirement Accounts

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The IRS has increased the contribution limits for various retirement accounts for 2019.

The Internal Revenue Service said Thursday that the contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $18,500 to $19,000.

The catch-up contribution limit, which is a higher threshold for employees 50 years or older using these accounts, remains unchanged at $6,000. The changes were among several inflation adjustments announced by the IRS.

The limit on annual contributions to an IRA, which hadn’t increased since 2013, were also raised to $6,000 from $5,500.

How much money you need to be part of the 1% worldwide

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Just how much money do you need to be among the global 1 percent? According to the 2018 Global Wealth Report from Credit Suisse Research Institute, you need a net worth of $871,320 U.S. Credit Suisse defines net worth, or “wealth,” as “the value of financial assets plus real assets (principally housing) owned by households, minus their debts.” CNBC reports:

More than 19 million Americans are in the 1 percent worldwide, Credit Suisse reports, far more than from any other country, while “China is now clearly established in second place in the world wealth hierarchy,” with 4.2 million citizens among the world’s top 1 percent.

To be among the top 10 percent worldwide, you don’t even need six figures: A net worth of $93,170 will do it.

And even if you have just $4,210 to your name, you’re still richer than half of the world’s residents.

Whopping 62 Percent of Jobs Don’t Support Middle-Class Life After Accounting for Cost of Living

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Despite an unemployment rate that has reached a 50-year low of 3.7 percent, most jobs across the U.S. don’t support a middle-class or better lifestyle, leaving many Americans struggling, according to a new study. USA Today reports:

Sixty-two percent of jobs fall short of that middle-class standard when factoring in both wages and the cost of living in the metro area where the job is located, according to the study by Third Way, a think tank that advocates center-left ideas.

“There’s an opportunity crisis in the country,” says Jim Kessler, vice president of policy for Third Way and editor of the report. “It explains some of the economic uneasiness and, frankly, the political uneasiness” even amid the most robust U.S. economy and labor market since before the Great Recession of 2007 to 2009.

A slight majority of Americans, 52 percent, do live in middle-class households, according to recent annual reports by Pew Research Center. And another 20 percent or so live in upper income households. But that’s because they’re juggling multiple jobs, for example, or relying on investments, an inheritance or other household members who may have higher-paying jobs.