Silvio Calabi: The Genesis 3.8 is no shrinking Hyundai

If you’re still baffled by the notion of a Korean car that costs European money, Hyundai would like you to consider its new, second-gen Genesis sedan. When we drove the 420-horsepower, $56,000 V-8 version, we called it an outstanding straightener of winding roads and said that it approached Lexus levels of lip-smacking design as well as ergonomics, function and comfort. Now we can report on that car’s stablemate, the Genesis 3.8, which is the same except for its 311- [...]

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Ex-Myer boss’s salary package revealed

THE chief executive who failed to turn Myer’s fortunes around was taking home a pretty sweet pay packet, the retailer has revealed.

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‘It simply closed its eyes and paid’

THE corporate watchdog has lashed a former chairman in court over his alleged role in Australia’s biggest corruption scandal.

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More bad news for taxi industry

THE taxi industry says it is “flabbergasted” at a decision by the competition watchdog blocking it from taking on the “illegal” Uber.

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The jobs that are ‘future-proof’

DEMAND for certain skills are in such high demand that some lucky professionals have “future-proof” careers. Find out if you are one of the lucky ones.

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Poverty rates lower in Monroe's West End

Hamilton had the lowest rate of residents living in poverty at 5.1 percent, with the Borough of Stroudsburg at 27 percent and East Stroudsburg at 32.7 percent.

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ESU homecoming week to paint the town

Downtown businesses in Stroudsburg and East Stroudsburg will start looking festive for East Stroudsburg University’s homecoming week.According to a news release from the university, 22 downtown businesses are participating in Paint the Town, a competition where student designers and organizations partner up with local businesses to paint display windows in the community during homecoming week, Oct. 13-18.Students began painting Monday and continued through the week. [...]

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Before You Toss That Receipt, Use It to Save Money and Get Free Stuff

If you have a tendency to throw out your shopping receipts after making a purchase, stop!

Often, those receipts invite you to take a customer satisfaction survey. You complete the survey to help a business provide better service, and, in return, the company gives you discounts and freebies.

Not all receipt offers are equal, though. Here’s how to know which surveys are worthwhile, and what you can earn.

Why Businesses Ask for Feedback

I’ve been on the other side of these surveys.

For a few years, I was a manager at a movie theater. I was one of the people who studied the survey results and responded to comments.

Sometimes the complaints were unreasonable and I couldn’t do anything about them. (I’m sorry the previews take too long, but I don’t make them nor do I pick which ones to show.) But the others allowed us to see areas of the business that needed improvement.

These surveys helped us measure our success, and I can appreciate the benefits they offer businesses. That’s one reason I like to fill them out for other businesses — that, and the rewards.

Instant Rewards vs. Contest Entries

Not all companies give you an actual reward for completing these surveys. In fact, I’ve noticed more and more businesses offering to enter you into a contest for a free gift card or shopping spree. While it would be great to win, chances are you won’t.

If you’re taking the time to give your feedback, you should receive a token of appreciation — each time — for your honesty, so look for offers where you’ll receive more than a contest entry for your efforts.

Companies that Offer Guaranteed Benefits

Here are some businesses that offer a guaranteed reward or discount in exchange for sharing your feedback:

• Wendy’s: $2 off your next purchase
• Dunkin Donuts: Free donut with the purchase of a medium or large drink
• Burger King: Free Whopper or original chicken sandwich with the purchase of medium or large drink and fries
• Baskin Robbins: $1 your next order of $4 or more
• Moe’s: $2 off your next purchase
• IHOP: A free short stack of pancakes on your next visit
• Subway: A free cookie
• PetSmart: $3 off on your next purchase
• Victoria’s Secret: $10 off your next purchase of $50 or more
• Bath and Body Works: $10 off your next purchase of $30 or more

How to Get Your Reward

Go to the website listed on your receipt. (Most of them should work on your mobile device.) Enter your survey code, which will be a series of numbers or letters on your receipt.

After that, answer the questions as best you can. They’re mostly multiple choice, but usually there’s at least one opportunity to fill in a text box with more details about your experience.

You’ll be given a verification code or asked for your email address so one can be sent to you. Simply write the code on your receipt and turn it in at your next visit for your discount or free item.

Pay attention to the directions, as some discounts are only applicable for the same store or restaurant you visited where you received the survey.

The best part is, it doesn’t matter what you say: You get the same reward, whether you share a positive or negative experience.

If you know you’ll do repeat business with a particular company, you might as well save some money and take these surveys. Who knows? Your survey response could improve your next experience, which will be made that much sweeter with your reward.

Your Turn: Do you fill out customer satisfaction surveys? What are some of the rewards you’ve received?

Kristina Brandt is a freelance writer and full-time marketer from New York.

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No Degree? No Problem. These No-College-Required Jobs Pay $59K+ a Year

How many recent college grads do you know who are still living at home or making less than $20,000 a year pulling shots at Starbucks?

Although traditionally a college degree promised a career with a good salary, today’s landscape is less clear.

With the narrowing of the wage gap between grads and non-grads, and the climbing total of student loans, a college degree may not offer as much in the way of ROI.

Although college is an unparalleled opportunity to learn about yourself, don’t think it’s the only option you face when you graduate high school — especially if your main goal is making bank.

Get a Great Job Without a College Degree

Thankfully, many well-paid careers don’t require higher education.

Entrepreneur and best-selling author Kevin O’Leary suggests 10 options to consider — though his list includes a couple of jobs that do require degrees, but might be considered “blue collar” enough not to have a place on your doctors and lawyers and software engineers-crammed radar of high-payout positions.

Here are three high-paid trade positions that don’t require degrees — and their most recent mean annual salaries as per the Bureau of Labour Statistics.

Elevator Installer and Repairer: $76,490

If you have a high school diploma, O’Leary says, you can probably apprentice for this high-paying maintenance position. Those in the top 10% of the field make more than $100,000 a year — talk about moving up!

Subway and Streetcar Operator: $59,230

Turn your morning commute into your actual career, and you could cash in. The top 10% in this industry make closer to $77,000 per year.

Oil and Gas Rotary Drill Operator: $61,070

Although physically demanding, this position could lead you to beautiful destinations — including a trip to the bank with an annual paycheck of almost $95,000, if you’re in the top 10% of earners.

Alaska, land of salmon, mountains and the northern lights, is the best state to live in for this industry — and you’ll get paid to live there.

Sound interesting? Be sure to check out O’Leary’s full list over at The Huffington Post.

Your Turn: Do you have a well-paid job that doesn’t require a college degree? Tell us about it in the comments!

Jamie Cattanach (@jamiecattanach) is junior writer at The Penny Hoarder and a native Floridian. As a double-major in English and philosophy with a psychology minor, she knows a whole lot about useless degrees.

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The Tortoise in Your Portfolio

While investors love to chase gains, it’s important to devote a portion of your portfolio to slow, steady investments that protect you from losses. Here are five types to consider. Photo: Mr. Leeds

“Rule No. 1 is never lose money. Rule No. 2 is never forget Rule No. 1.”
— Warren Buffett

Buffett’s quote seems to state the obvious, but what does it mean for the average investor? My translation is this: Chasing the big market gains feels good, but protecting against market losses is what leads to a secure and stress-free retirement.

This article will first illustrate the power of preventing market losses, and then will discuss five options for protecting a portion of your portfolio. But first, let me be clear: These defensive schemes are for a portion of a portfolio. In my previous article on the stock market outlook, I discuss how much of your portfolio you should consider insulating from downside risk.

Also, if you are young or more than 10 years from retirement, then you can be much more aggressive, so long as you still have an adequate emergency fund to pull from during tough times.

The Tortoise and the Hare

The tortoise-versus-the-hare analogy fits perfectly into what we have seen in the market the past 15 years. Sometimes the market ran fast, other times it ran backward, and sometimes it went nowhere. I played with some numbers and plotted the following turtle-versus-the-hare chart. The hare is how the actual S&P 500 ran from 2000 through 2014. The turtle shows what you needed to do to match the hare if you ever went backward.

Amazingly, if you avoided the four down years (2000-02 and 2008), then in the up years you would have only needed a little more than one-third of the S&P’s gains (37.8%, to be exact) to do just as well as the S&P 500. Here’s the data:

 

 

What Are Some ‘Tortoise’ Options for the Average Investor?

So, as I have preached in my previous articles about the stock market outlook and flawed retirement projections, what are some options to inject some defense into your portfolio? I will discuss five here.

Money Market Account

A money market account is insured by the FDIC (Federal Deposit Insurance Corp.). Saundra Latham recently wrote a good article explaining money market accounts, so I won’t go into much detail here. The bottom line is they are liquid (i.e., you can get your money out instantly) and safe (i.e., your principal is protected).

The returns these days are paltry, barely above 0%, but historically that hasn’t been the case. Yields in money market accounts reflect short-term interest rates. Short-term rates were actually around 5% prior to the 2008 financial crisis. We currently are at a cyclical bottom in both short-term and long-term rates, so we should see interest rates increasing in the next few years, which will improve interest rates in money market accounts.

Also remember that inflation has been virtually nonexistent lately, too, so even though a money market account is not generating much interest right now, it is also not deflating in value either.

Certificates of Deposit (CDs)

CDs are safe because they are also FDIC insured. They also offer higher interest rates than money market accounts. However, you do give up some liquidity — banks typically impose a penalty for withdrawals before the end of the CD term. Saundra Latham also has a good article on CDs.

To counteract the liquidity issue, you can build a “ladder” of CDs. For example, you can take the chunk of money you want to protect and equally divide it into one-, two-, three-, four-, and five-year CDs, so that each year you have a CD coming available to you. As each one matures, you can cash it out penalty-free ,or put it into another five-year CD to extend your ladder another year.

This strategy also counteracts interest rate risk. As I noted above, interest rates are at both a short-term and long-term cyclical bottom. By laddering your CDs, if interest rates do begin rising again, you can renew one each year at a higher rate as rates rise.

Equity-Indexed Annuities

I recently wrote an article explaining the fundamentals and types of annuities. Equity-indexed annuities are a type of fixed deferred annuity. They offer safety and opportunity for growth. In return, you give up some liquidity.

During the accumulation phase, the equity-indexed annuity is tied to one or more stock market indices, such as the S&P 500, a European index, and/or an Asian market index. If the market index goes down, your account does not go down with it. (Protection against losses is why it is considered a fixed annuity rather than a variable one.) If the market goes up, you get credited with a portion of the market gains.

So, for example, suppose I put my $100,000 into an equity-indexed annuity tied to the S&P 500 in which I receive a 50% participation rate. During the first period of time, the index drops 20% in a bear market. The value of my annuity would stay at $100,000 (less any annual fees or expenses charged by the particular insurance company). During the second period of time, the index goes up 10%. I would get credited with half of that gain, or 5%, and my annuity value would increase to $105,000 (less any fees or expenses).

Many equity-indexed annuities have required minimum accumulation periods, six to 12 years, for example, at which time you can withdraw the accumulated value and do something else with it, or annuitize it into a lifetime stream of payments. You do have some liquidity during the accumulation phase—typically, you can withdraw around 5% to 10% each year without penalty.

Indexed Universal Life Insurance

Indexed universal life insurance (IUL) works similarly to equity-indexed annuities. The portion of your premium that is not needed to cover mortality risk goes into an equity-indexed strategy, such as what I described above, and builds a cash value within your life insurance policy. It is protected from losses and offers opportunity for growth if the market does go up.

It also has an interesting liquidity feature because life insurance gets very favorable treatment under the tax code. You can access your cash value tax-free by structuring it as a loan to yourself. If you never pay it back, then the loan amount is just deducted from the life insurance proceeds upon your death. Also, the death benefit of life insurance also passes to beneficiaries free of income tax.

You can access the built-up cash value when you need it, or, if you decide you never need to use the cash value, then the full face amount of the life insurance policy will be paid to your beneficiaries.

• Related: The Complete Guide to Life Insurance

Bonds — Well, Sort Of

This issue gets sticky, so let’s start simple and then work through the weeds.

If a) you purchase a bond (in contrast to a bond fund, which I will discuss below), b) the bond issuer never defaults, and c) you hold the bond to maturity, then yes, you have an investment where the principal is protected from loss.

As you can see, however, that’s a lot of “ifs.” Now let’s dive into the weeds.

Credit Quality of the Bond Issuer

It goes without saying, but still some people forget, that a bond is a debt obligation of the entity that issues it. You’re therefore counting on the issuer’s future earnings to be enough to pay you both the interest and principal back. That’s also why bonds carry ratings from agencies such as Moody’s, Fitch, and Standard & Poor’s. The credit rating associated with a bond, especially whether it is rated as investment grade or junk status, has a huge bearing on its perceived risk and also its interest rate.

A great recent example of this entire system falling apart was the 2008 financial crisis, in which the buildup consisted of investment banks packaging mortgages of high-risk borrowers and selling them as “investment grade” bonds to the public. Meanwhile, the credit rating agencies were asleep at the wheel and rubber-stamped these bonds as investment grade because the investment banks were paying them truckloads of money to keep the rubber stamp going.

The bottom line is that repayment of a bond is not a guaranteed outcome. The closest bonds we have to a guaranteed thing are those issued by the U.S. Treasury, despite the ballooning federal debt. The reason is that, if the government gets in a real pickle on paying back the bonds, then the Federal Reserve could swoop in, print money out of thin air, and purchase the bonds. This could lead to massive inflation, but your bond would at least be paid back.

You Hold the Bond to Maturity

You have probably read this many times, but it is worth stating again: If you purchase a bond, and then interest rates rise, the value of your bond falls. In other words, interest rates and the value of bonds move in opposite directions.

The reason is simple, and I will illustrate with an oversimplified example in order to show why. The 10-year Treasury bond has been hovering around 2% lately. Suppose I buy a 10-year Treasury bond at a face value (also known as par value) of $10,000. My annual coupon payments will therefore be $200 (2% of $10,000), and at the end of the 10 years I will get my $10,000 back.

Now suppose while I am holding this bond, interest rates go up to 3%. In order for my older 2% bond to be competitive in the marketplace with the new bonds being issued, it has to go down in value. The reason why is my older bond’s coupon payment is fixed at $200 per year, so in order to get a 3% return to compete with the newer bond issues, my bond must decrease in price.

However, it will not go all the way down to $6,667 (i.e., the point at which a $200 coupon would be 3% of the principal value) because at maturity the government still pays me back the $10,000 par value of the bond, so there is also a gain between the price at which I buy the bond and the par value (if I purchase the bond below par value).

This is the point where bond valuations get complicated, because as interest rates fluctuate, the total return of the bond depends on a) the coupon payments, b) the bond’s current price relative to the par value, and c) the amount of time until maturity.

Sometimes you will hear conversation about “duration” risk with bonds. In its simplest form, what duration risk means is that the longer a bond has until maturity, the more sensitive the price of the bond is to changes in interest rates. For example, if interest rates increased 1% tomorrow, then 10-year bonds would see a bigger price drop than five-year bonds.

J.P. Morgan published a report titled “Guide to the Markets” in July. In that report it discussed interest rate sensitivity and estimated interest rate levels at that time for 10-year Treasury bond prices would fall 8.6% if interest rates rose 1%, and five-year Treasury bond prices would fall 4.7%.

My main point with this section is that, unless you plan to hold the bond to maturity, you absolutely have the risk of your bond losing value and potentially being sold at a loss. Many people forget this fact because long-term interest rates have been declining for over 30 years, so virtually everyone who is still holding long-term bonds has only seen them appreciate in value. That will not be the case when interest rates finally start rising again.

Your ability to hold a bond until maturity also depends on whether you directly own the bond or indirectly own it via a bond fund, which we will turn to next.

Bonds vs. Bond Funds

The vast majority of all investors who “own” bonds actually own them indirectly via a bond fund, i.e., a bond mutual fund or ETF. When you own a bond fund, you lose control of being able to hold the bond until maturity and therefore could very likely suffer a loss in a rising interest rate environment.

As interest rates rise, causing the prices of the bonds in the fund to fall, the fund’s net asset value will fall, causing the market price of the fund also to go down.

Theoretically, the fund could overcome this problem by holding all the bonds in its portfolio until maturity, at which time it would get the full par value of the bonds back before purchasing new ones, but in reality this does not happen for a couple of reasons.

One reason is that in order for the fund to remain competitive and attract investors, it will need to pay interest that is competitive in the marketplace. That means if interest rates are rising, the fund manager will be pressured to replace lower-interest bonds at a loss before they reach maturity.

Another reason is that investors come and go from funds all the time. Especially when a fund begins going down in value, investors start fleeing. In a mutual fund, the portfolio manager will then be required to sell some of the bonds at their falling prices in order to meet the cash requirements for redemptions by fleeing investors.

When long-term interest rates finally do begin an ascent, it will be interesting to see what happens with the hundreds of bond funds that have popped up in recent years. As I mentioned earlier, long-term interest rates have been in descent since 1981 when ETFs didn’t exist and mutual funds were just a tiny fraction of the market compared to today. That means we have an entire generation of portfolio managers who have never managed a mutual fund or ETF during a rising long-term interest rate environment.

Therefore, the best advice I can give on this last category is buyer beware and do your homework before blindly purchasing a bond fund.

Tim Van Pelt is a financial planner and registered investment advisor representative of Steele Capital Management Inc. The views expressed in this article are solely his and do not necessarily reflect the views of Steele Capital or its management. You can reach him at tjvanpelt@gmail.com or (608) 577-9877. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, investing, tax, legal, or accounting advice. You should consult your own investment, tax, legal, and accounting advisors before engaging in any transaction.

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Before You Sign Up For a Warehouse Club, Ask Yourself These Questions

A lot of people save money by shopping at warehouse clubs like Sam’s Club or Costco. It’s a great way to buy in bulk and pull in huge batches of lasagna or breakfast burritos to stash in your freezer.

But will your warehouse club automatically put cash back in your pocket? Not necessarily.

U.S. News states that before you sign up for a warehouse club and pay the membership fee, you need to ask yourself a few important questions.

Is the Warehouse Club Convenient?

If you buy a warehouse club membership but never shop there, that’s money lost. So U.S. News asks you to seriously consider whether the warehouse club will fit into your life and routine.

Is the club located near your home or work? If you have to drive out of your way to go to the warehouse club, you’ll probably avoid shopping there — even if you bought a membership.

When it comes to grocery shopping, most people choose convenience even if it means paying a little more. After all, do you really want to add a half-hour of travel time each way to go to the warehouse club when you could just stop by the grocery store near your house?

Does the Warehouse Club Offer the Best Deals?

People often assume that a warehouse club offers the lowest prices, but do your homework.

Check prices of grocery and household staples against the prices offered at your local supermarket or big box store. You may be surprised to find which one has the best deals.

U.S. News suggests going to your local grocery store and using your smartphone to compare grocery store prices to the ones listed on the warehouse store website. Comparing prices also lets you know which food and household items you should buy at the warehouse club, and what’s better to buy somewhere else.

Don’t forget about gas. Many warehouse clubs include gas stations, but make sure the gas is a good deal before you fill up!

If it is a great deal, U.S. News suggests planning your shopping trips to include gas; after all, every penny saved makes your warehouse club membership that more valuable.

By doing a little research before you buy that warehouse club membership, you’ll be more likely to use your club membership and save money.

Want to learn more? Read the whole story at U.S. News.

Your Turn: Do you shop at warehouse clubs? Are they convenient? How much money do you save?

Nicole Dieker is a freelance writer focusing on personal finance and personal stories. Her work has appeared in The Billfold, The Toast, Yearbook Office, The Write Life and Boing Boing.

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