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Latest News About Personal Finance

This NFL Player Smartly Saves Nearly 90% of His Income

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Detroit Lions defensive end Brandon Copeland only lives on 15 percent of his NFL salary and saves the rest. Copeland knows too well that his lucrative NFL career will not last forever. The 25-year-old defensive end told ESPN’s Michael Rothstein: “It’s guaranteed football is going to be over one day.” So he smartly saves nearly 90% of his income — which averages $615,000 a year.

Here’s a break down of Brandon Copeland’s personal finance. He invests around 60 percent of his post-tax salary. The DE also saves the extra 30 percent of the salary, while he only lives off the remaining 10 to 15 percent.

That’s a very impressive plan for a high-income earner. Copeland understands the power of compounding earnings to reap the most benefit from his investments. He explains his strategy: “Now anything that I have in my account the year previous, I don’t touch it.” Furthermore, he adds: “I’ve literally hoarded money. I’m literally stacking, stacking, stacking. Anything I can get into an account and just let sit, I’ve got to a point where I have enough, where if football is over today, I have more than enough to take care of me for a while.”

Lions DE Brandon Copeland only lives on 15 percent of NFL salary. He’s well on his way to financial independence. Courtesy of Brandon Copeland

While Copeland is planning ahead for his financial security, he also works part-time for a Wall Street firm. During the NFL off-season, the Wharton School graduate works remotely for Weiss Multi Strategy Advisers. He’s already making plan for life after NFL. This young man is well set on his road to financial independence.

American Credit Scores Hit Record High

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As the economy keeps improving since the last recession, American credit scores reached a record high. According to data from Fair Isaac Corp, the average credit score for U.S. consumers hit 700 in April on a range from 300 to 850.

As reported on The Wall Street Journal, more than six million U.S. adults will have their records clear of personal bankruptcies and foreclosures over the next five years. Dropping those negative events definitely helps boost consumers’ credit scores. As a result, economists expect a rise in loan and credit-card approvals and increased spending by consumers.

“Higher scores lead to more available credit,” Cristian de Ritis, senior director in the economics group at Moody’s Analytics, told The Wall Street Journal. “We’d see more activity in terms of loan approvals and credit-card approvals, more spending, and that would have a ripple effect across the economy, increasing aggregate demand for goods and services.”

Mortgage foreclosures stay on credit reports for up to seven years. Personal bankruptcies can remain on credit reports for seven to 10 years. Falling unemployment rate and continued economic growth are helping American consumers’ personal finance. Expect to see more improvement for American credit scores with the current positive outlooks.

 

Healthy? You’ll Spend More on Health Care in Retirement

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Ironically, it’s healthier people who need to save the most for health care in retirement, said Anne Tergesen at The Wall Street Journal. The counterintuitive finding from the research by the Empower Institute shows that a 65-year-old male smoker just needs $114,900 to have a 90 percent chance of having enough money to cover lifetime medical expenses. That’s compared with $143,800 for a 65-year-old in good health and $156,000 for a healthy woman of the same age. Healthier people simply live longer, and thus need more savings to last their lifetime.

Furthermore, more people are embracing technology in their daily lives. Technology really improves our health. That means we can all expect to live longer in retirement. It is wise to plan and save for your future health care needs.

The World’s Largest Fund Gets Even Cheaper for Investors

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The world’s largest fund just got a bit cheaper for investors. The fee for Vanguard Total Stock Market ETF (VTI) and Admiral share classes were reduced to 0.04%. VTI’s extreme low fee is much lower than its peers’ 0.90% median fee. As a result, investors pocket these monies while VTI outperforms its competitors due to sizable fee advantage.

Vanguard Total Stock Market ETF and Vanguard Total Stock Market Index Fund gives investors option to invest in a diversified U.S. stock market. As reported on Morningstar: “Broad diversification is an intrinsic advantage of funds tracking market-capitalization-weighted total stock market indexes, which capture nearly the entirety of the investable market capitalization of the U.S. equity market… Low turnover is another key advantage of a fund tied to a cap-weighted benchmark. Lower turnover equates to lower costs and a lesser likelihood of taxable capital gains distributions. VTI’s median annual turnover was 10% during the trailing 10-year period. This compares with a median figure of 66% for its category peers.”

Normally, passively managed funds outperformed actively managed funds. Low fee from passive funds is one of the reason. Morningstar completed a study of 562 actively managed funds in the U.S. large-growth category and 25 passively managed funds. In the 10 years ending in 2014, passively managed funds’ asset-weighted return was an average 9.27 percent versus actively managed funds’ 8.05 percent. Overall, the reduction in fee to 0.04% from 0.05% for the the world’s largest fund is another win for investors and passive funds.

What are the HSA contribution limits?

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The IRS has announced the new 2017 contribution limits for health saving account. Each year the IRS provided the inflation-adjusted HSA contribution limits, along with minimum deductible and maximum out-of-pocket expenses for the high-deductible health plans. The health savings account annual limit for individuals rises by $50.  Aside from this $50 increase, other limits for HSA remain the same.

For calendar year 2017, the annual limitation on deductions for an individual under a high deductible health plan is $3,400. The annual limitation on deductions for a family is $6,750. The additional catch-up contribution for 55 years old or older is still $1,000.

HSA Guidelines for 2017

HSA Contribution Limit HDHP Minimum Deductible
Single $3,400 $1,300
Family $6,750 $2,600

[Read more…]

Cops Show Up at Bank of America to Seize Assets After BoA Forecloses on Wrong House

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After Bank of America forecloses on wrong house, homeowner, lawyer, moving crew, and police officers arrive at bank to seize assets and settle debt. This is a sweet justice for a family that endures the foreclosure nightmare.

Homeowners Warren and Maureen Nyerges paid cash for a home owned by Bank of American in the Golden Gate Estates. From the start they never had a mortgage, but the bank keeps insisting they still owe them money. Bank of America even tried to foreclose on the Nyerges’ property.

The couple brought their case to a Collier County judge. After a year and a half nightmare fighting against the bank, they won the case but Bank of America refused to pay the couple’s legal fees for trying to foreclose on the wrong house.

What happens next is hard to believe. Police officers escorted the couples and their lawyer to Bank of America so they can foreclose on the bank!

The couples’ attorney Todd Allen explained: “I instructed the deputy to go in and take desks, computers, copiers, filing cabinets, including cash in the drawers.” Several deputies stood outside with moving crews on stand by to seize the bank’s assets.

As for the bank manager, he was visibly shaken. “Having two Sheriff’s deputies sitting across your desk, and a lawyer standing behind them, demanding whatever assets are in the bank can be intimidating. But, so is having your home foreclosed on when it wasn’t right.”

As this story unfolds, this is a good lesson for banking institutions to treat their customers properly and respectfully.

How to Protect Yourself from Ransomware

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Cybercriminals recently released virulent ransomware that infected 100,000 organizations in 150 countries. Ransonware can spread rapidly from targeted computer to other units on the same network by exploiting a networking vulnerability. The ransomware, called WannaCry, encrypts the victim’s computer and changes the desktop background with an extortion message providing instructions on how to pay to decrypt the data on the computer.

The fraudsters often demand the victims to pay in bitcoin. So far they have made more than USD $26,000 from the worst ransomware outbreak ever. After being infected by ransomware, victims would see a message on the lock computer screen that included a “Contact Us” feature to let victims communicate and pay the fraudsters.

Victims of the WannaCry ransomware would see this desktop background with an extortion message demanding a $300 ransom to unlock the encrypted files.

Not only it costs you time and headache when infected, it also costs you money directly and indirectly. Ransom demanded by fraudsters can be as much as $300 to $600, and there’s no guarantee that you will securely get your data. So how can you protect yourself? [Read more…]

Unemployment Claims at Lowest Level Since 1988

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According to the Department of Labor, the number of Americans drawing unemployment insurance benefits dropped to its lowest level in 28 years in April, 2017. The unemployment rate also fell to 4.4 percent as more people are now finding jobs. That’s a great personal finance news for many families. The Washington Examiner reported:

The end of April saw the fewer workers getting unemployment benefits than anytime in the last 28 years, the Department of Labor reported Thursday in a sign of the labor market’s increasing health.

Just 1.9 million people received unemployment insurance benefits at the end of the month, the fewest since 1988. Benefits are available for up to 26 weeks in most states.

Even more engouraging: Averaging over the past four weeks, total unemployment benefit claims are running at the lowest rate since 1974, despite the workforce being 75 percent bigger.

Thursday’s report also showed new jobless claims dropping to 236,000 in the first week of May, an extremely low level.

Snapchat Founders Just Lost Over $1 Billion

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Snapchat Founders Evan Spiegel and Bobby Murphy lost more than $1 billion each after the company reported earnings for the first time in May, 2017. After the social media company reported first-quarter revenue with fewer users than projected, shares fell as much as 25 percent to a low of $17.12 before recover slightly.

Snap stock was falling to an all-time low of $17.59. Snap launched its initial public offering at $24 per share and jumped as high as $29.44 in the early days of trading. But Snap share hasn’t closed above $24 since early March.

Before the release of Snap Inc’s first-quarter revenue, Evan Spiegel and Bobby Murphy each had more than $5 billion in net worth. After the bad earning report, Spiegel and Murphy lost more than $1 billion each. However, both Spiegel and Murphy still retain their billionaire status with their fortunes drop to $3.8 billion.

As for millennial investors that rushed in to by the company’s shares when the stock debuted in early March, 2017, they are not doing too well and their enthusiasm in Snap Inc is waning. Investing in any IPO is a risky bet. It makes more sense to design a long-term investment plan based on index mutual funds.

How to Get Free Wendy’s Chicken Nuggets for a Year

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In April, a teen named Carter Wilkerson asked Wendy’s how many retweets he would need to get in exchange for a year of free chicken nuggets. The fast-food chain replied that it would take 18 million retweets.

The 16-year-old set out on a wild mission to get free Wendy’s chicken nuggets for a year by asking the internet to help his challenging quest. Carter took a screenshot of the conversation and asked the internet to help him because, as he tweeted, “a man needs his nuggs.” Soon Twitter’s most retweeted tweet was born as his post quickly went viral.

The tweet from Carter Wilkerson for a year of free chicken nuggets from Wendy’s is now the most retweeted post of all time. [Read more…]

Interns at Apple, Facebook and Google Out-Earn the Average American

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The average full-time working American makes $51,350 a year. According to jobs website Glassdoor, interns at Apple, Facebook and Google out-earn the average American. The list of 25 companies who are paying interns more than what the average American is dominated by technology and finance companies.

Facebook interns, the top-earning summer interns in the country, make an average of $8,000 per month. The monthly salary is way ahead of the average $4,300 per month for the average American.

Microsoft interns come in a close second, making an average of $7,100 per month. Apple and Google interns earn $6,400 and $6,000 per month, respectively. In general, people in tech and finance jobs make more than the rest of the country.

Highest paid internships and monthly income

Facebook $8,000
Microsoft $7,100
ExxonMobil $6,507
Salesforce $6,450
Amazon $6,400
Apple $6,400
Bloomberg $6,400
Yelp $6,400
Yahoo $6,080
Vmware $6,080
Google $6,000

 

This Multi-Millionaire CEO Chooses to Live in a Trailer Park

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Multi-millionaire Zappos CEO Tony Hsieh chooses simplicity as he prioritizes spending on experiences over things. Tony Hsieh has a net worth of $840 million so he can afford any mansion that he wants to. Instead the multi-millionaire CEO of Zappos lives in a $950-a-month trailer home.

When asked about his lifestyle in a 240-square-foot Airstream trailer, Hsieh told ABC: “I love it at night here. There’s campfires going. All these lights … sometimes musicians playing music, just jamming together, people cooking. I really like the unpredictability and randomness of it.”

Despite being a nearly billionaire, Tony Hsieh prefers a simple life. He’s happy to downsize and live frugally. “Sometimes people ask me what my definition of success is, and for me it’s getting to the point where you’re truly okay with losing everything you have.”

Interview Questions That Job Seekers Fear Most

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Many people get nervous when it comes to job interviews. But if you get scared during the interview, rest assured you’re really not alone. However, there’re some interview questions that people are more scared than others.

A survey conducted by recruitment website Totaljobs questioned 6,000 people looking for work. There are three questions that job seekers fear most. Here are the most feared questions:

  1. “Why should I hire you?”
  2. “Tell me about yourself”
  3. “What is your biggest weakness?”

Preparation is the key. Here’s how to answer “why should we hire your” in job interviews. With time on your side, you can research and rehearse your answers.

Buffett Says Money Spent on Plumbers Better Than on Hedge Funds

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At the annual meeting of Berkshire Hathaway, Warren Buffett advised about the danger of using hedge-fund managers for investment. According to Buffett, money spent on plumbers or dentists adds more value than on hedge-fund managers. In aggregate, investment professionals aren’t worth their fees. Investors would be better off sticking their money in a low-cost index fund.

“If you go to a dentist, if you hire a plumber, in all the professions, there is value added by the professionals as a group compared to doing it yourself or just randomly picking laymen,” Buffett, 86, said. “In the investment world it isn’t true. The active group, the people that are professionals in aggregate, are not, cannot, do better than the aggregate of the people who just sit tight.”

Vice Chairman Charles Munger, 93, said “it’s even worse than that” because some hedge fund managers with a long career in the industry — known for charging 2 percent management fees and taking 20 percent of profits — do well, attract money and then lose it.

“The investing world is just a morass of wrong incentives, crazy reporting and, I’d say, a fair amount of delusion,” Munger said.

Buffett also challenged, as he has in previous shareholder meetings, the 2-and-20 compensation model for hedge fund managers.

“If you even have a billion dollar fund and get two percent of it, for terrible performance, that’s $20 million,” Buffett said. “In any other field, it would just blow your mind.”

John Bogle Net Worth

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Net Worth: $80 Million
Age: 88
Born: May 8, 1929
Source of Wealth: Investor, Business Magnate
Known For: Founding the Vanguard Group
Last Updated: 2017

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…]