Thanks to aggressive credit card pushing by banks and growing consumer confidence, credit-card debt balances are poised to hit $1 trillion this year, coming close to the all-time peak of $1.02 trillion in July 2008. Consumers are taking on other forms of debt, too. Auto-loan balances surpassed $1 trillion in the first quarter, a record for the industry, according to a report Thursday from credit bureau Experian. Banks are aggressively pushing their plastic and cashing in on the profit from consumers. “Credit cards are the best business in banking,” said Robert Hammer, who runs the consulting firm. (wsj.com)
Why Are So Many Americans Struggling to Save for Retirement?
Christian Weller, University of Massachusetts Boston writes:
This week marked the beginning of the presidential primary season, and economic fears such as jobs and wages have taken center stage on the campaign trail. Yet one of voters’ biggest economic problems has thus far received short shrift from the candidates: Americans’ growing inability to save for retirement. A handful of Republican and Democratic candidates have laid out proposals for Social Security reform, but none have adequately addressed the substantial and growing deficit in total retirement savings. The retirement crisis is real, as I’ve also been documenting for the past 15 years and most recently in my new book, Retirement on the Rocks. More than half of us won’t have enough savings when we retire to maintain our current standard of living and will have to make substantial spending cuts once we stop working. How did we get here, what are the consequences and how can we fix the problem? [Read more…]
Two-Thirds of US Would Struggle to Cover $1,000 Crisis
Two-thirds of Americans would have difficulty coming up with the money to cover a $1,000 emergency, according to the poll conducted by Associated Press-NORC Center for Public Affairs Research. Three-quarters of people in households making less than $50,000 a year and two-thirds of those making between $50,000 and $100,000 would have difficulty coming up with $1,000 to cover an unexpected bill. Even for the country’s wealthiest 20 percent — households making more than $100,000 a year — 38 percent say they would have at least some difficulty coming up with $1,000. Having a modest, immediately available emergency fund is recognized as critical to financial health. Families that have even a small amount of non-retirement savings, between $250 and $749, are less likely to be evicted from their homes and less likely to need public benefits, an Urban Institute study found. (ap.org)
Pope Condemns ‘Bloodsuckers’ Who Exploit Poor Workers
Pope Francis condemned “bloodsuckers” who grow rich by exploiting others. Making “slaves” out of workers and setting unfair contracts was a mortal sin. During mass at the Vatican, he told a story about a girl who found a job working 11 hours a day for $729 a month. “This is starving the people with their work for my own profit! Living on the blood of the people. And this is a mortal sin,” he said at the service in his Santa Marta residence. (yahoo.com)
Our finances are a mess – could behavioral science help clean them up?
Hal Hershfield, University of California, Los Angeles and Abigail Sussman, University of Chicago writes:
The first few months of a new year can be a stressful time financially. The Christmas holidays typically lead to depleted savings and higher credit card balances, while tax season is right around the corner. Unfortunately for most us, this isn’t a seasonal dilemma but a chronic problem that brings anxiety throughout the year. Indeed, as many as 44 percent of American households don’t have enough savings to cover basic expenses for even three months. Without a savings cushion, even regular seasonal expenses like holiday celebrations may end up feeling “unexpected” and lead households to turn to credit to cover costs. U.S. consumers currently hold US$880 billion in revolving debt, with an average credit card balance of almost $6,000. The picture is even more dire for lower-income households. So how can we turn this around? [Read more…]
7 Things Unhappy Couples Have in Common
Brittany Wong of Huffington Post compiles some tips from relationship experts who share 7 biggest mistakes people in unhappy relationships make. It’s hard to buy happiness with money but you can increase your happiness for free by learning how to avoid these 7 behaviors in your own relationship:
- They compare their behavior now to their behavior when they dated
- They’re pros at passive aggression
- They can’t agree on who’s right and who’s wrong
- They put in phone time instead of face time
- They allow their relationship to grow stale
- They lose sight of their partnership
- They don’t touch
The Heavy Price We Pay for Free Wi-Fi
Benjamin Dean, Columbia University
For many years, New York City has been developing a “free” public Wi-Fi project. Called LinkNYC, it is an ambitious effort to bring wireless Internet access to all of the city’s residents. This is the latest in a longstanding trend in which companies offer ostensibly free Internet-related products and services, such as social network access on Facebook, search and email from Google or the free Wi-Fi now commonly provided in cafes, shopping malls and airports. These free services, however, come at a cost. Use is free on the condition that the companies providing the service can collect, store and analyze users’ valuable personal, locational and behavioral data. [Read more…]
The 10 Most Expensive Places to Raise a Family in U.S.
The basic family budget for a two-parent, two-child family ranges from about $50,000 to more than $100,000 depending on where a family lives, according to data from the nonprofit and nonpartisan think tank the Economic Policy Institute. Across regions and family types, child care costs account for the greatest variability in family budgets. Among two-parent, two-child families, child care costs exceed rent in 500 out of 618 family budget areas. Even in the best of economic times, many parents in low-wage jobs will not earn enough through work to meet basic family needs. Here are the 10 most expensive places to raise a family with 2 adults and 2 children:
- Washington, D.C. with an annual cost of $106,493
- Nassau-Suffolk, N.Y. with an annual cost of $103,606
- Westchester County, N.Y. with an annual cost of $99,592.
- New York City with an annual cost of $98,722
- Stamford-Norwalk, Conn. with an annual cost of $97,350
- Honolulu with an annual cost of $94,092
- Poughkeepsie-Newburgh-Middletown, N.Y. with an annual cost of $92,837
- Ithaca, N.Y. with an annual cost of $92,603
- San Francisco with an annual cost of $91,785
- Danbury, Conn. with an annual cost of $89,000
Why Countries Are Willing to Cheat for Olympic Gold
The doping allegations could prevent some Russians athletes to compete for 2016 Olympic in Rio this summer. Market Watch has an article detailing why countries are willing to cheat for Olympic gold. Grigory Rodchenkov, the former director of the laboratory where drug testing was performed for the 2014 Sochi Olympics, alleged that it was more important for Russia to end the Olympic games with the highest medal count than to guarantee that the games ran smoothly. “The whole medal count story is for the domestic audience,” says David Wallechinsky, president of the International Society of Olympic Historians, a nonprofit organization that collects and publishes research on the Olympic movement. In highly-populated countries like Russia and China, a major Olympic medal haul sends a message of strength and stability to citizens, Wallechinsky says. In the U.S., people get very excited, “but we look at victories as belonging to the individual athletes,” says Kathleen Smith, a professor at Georgetown University’s Center for Eurasian, Russian and East European Studies. “Russia sees them as belonging to the country.” (marketwatch.com)
3 Tips on Investing in Stocks from Warren Buffett
We all can learn a few things from Warren Buffett, the third richest man in the world and one of the greatest investing minds. Kendrick Chua explained 3 tips on investing in stocks from Warren Buffett:
- Never lose money: When investing, do proper and thorough research. Don’t overlook risk while there is also a need to prevent losses
- Socks or stocks – Buy quality when marked down: Buffett advises us to buy when things are on sale – whether they are socks or stocks
- Be greedy when others are fearful (and vice versa): Buffett advises investors to go against the herd. Herd mentality is common when the market reaches new heights.
The 3 Skills Most Companies Look for in Employees
Linda Celestino, vice president of guest services at Etihad Airways writes on Fortune: “there are two kinds of success: external or professional success and internal or personal success. Sometimes, in our younger years, we believe we are only measured on our external success and professional achievement. We think that that’s how the industry or world competes, but success is not singular, or based simply on our fortitude. To achieve success, you need to find your purpose, communicate, and adapt.”
- Finding your purpose and what you truly, deeply believe in 1,000% is fundamental to your success
- Communication drives every negotiation when used to build relationships , whether it’s monetary, professional, or personal
- Adaptability and the ability to thrive in ambiguity is very important during challenging times
Wendy To Automate 6,000 Restaurants With Self-Service Ordering Kiosks
Due to the state’s decision to gradually raise its minimum wage to $15, more companies are looking into automation to reduce cost. To deal with the rising minimum wage, the fast-food chain Wendy’s plans to start automating all of its restaurants. The company said that self-service ordering kiosks will be made available across its 6,000-plus restaurants in the second half of the year. Wendy’s President Todd Penegor said it will be up to franchisees to decide whether or not to adopt the kiosks in their stores. The minimum wage for all 258 Wendy’s restaurants in California will gradually rise to $15 and automation and eliminating certain jobs are the solution for cost reduction. In the meanwhile McDonald’s also tests its own self-service kiosks. (investors.com)
Good News for Consumers: Google Bans Ads For Payday Loans
After deciding it doesn’t want to promote predatory lending practices that are harmful to consumers, Google decided to ban ads for payday loans on their ads systems. “Research has shown that these loans can result in unaffordable payment and high default rates for users so we will be updating our policies globally to reflect that,” Google’s product policy director, David Graff, writes in a blog post. Payday loans often come with extremely high interest rates if they aren’t paid back immediately, which can push people further in debt. Georgetown’s Center on Privacy and Technology notes in a statement, “Payday lenders profit from people’s weaknesses — particularly poor people and people of color. Every time someone clicks on those ads, search engines profit, too.” Of course Google will lose the revenue from the banned ads, but it will earn more trust from visitors for its other ads. Payday loans will be banned from Google globally starting June 13th.
0 to 400 mph in two seconds: Welcome to the age of hyperloop
Marco della Cava on USA Today reported: “Hyperloop One successfully demonstrated Wednesday one key part of how it plans to send people and cargo racing through cushioned tubes at nearly the speed of sound. This transportation alternative, its backers claim, could reduce the journey between Los Angeles and San Francisco to just 30 minutes.” Hyperloop One cofounder and chief technology officer Brogan BamBrogan said, “this is about validating the hardware and software. We’re aiming to hit 400 mph in two seconds.” BamBrogan noted that humans in a hyperloop pod wouldn’t feel the acceleration as it would happen more gradually, eventually hitting close to 750 mph. In the near future, people can save time and money when travel between large metro area such as Los Angeles and San Francisco. (usatoday.com)
Chelsea Clinton’s Husband to Close His Hedge Fund After Losing 90% of Value
Chelsea Clinton’s husband, Marc Mezvinsky, learned a hard lesson about active investing after failing to perform in his hedge fund. After losing 90% of its value, Chelsea Clinton’s husband is reportedly closing his Greek hedge fund. As reported on New York Times, “it was a hedge fund portfolio pitched by Hillary Clinton’s son-in-law, Marc Mezvinsky, as an opportunity to bet on a Greek economic revival. Now, two years later, the Greece-focused fund is shutting down, after losing nearly 90 percent of its value, according to two investors with direct knowledge of the matter who spoke on the condition of anonymity. Investors were told last month that the fund would close.” After all, Chelsea’s husband learned the mistake mostly from the investors’ money. Common investors should stick with index funds. A low-cost indexing strategy beats active management over the long run. (nytimes.com)
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