“I AM fast becoming your Libor bitch!” Convicted fraudster and former trader Anthony Allen must be wishing he’d never typed those words.
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الخميس، 5 نوفمبر 2015
Bridges cops ‘freaks’ backlash
FITNESS queen Michelle Bridges is at the centre of a social media storm over Woolies’ latest ad. People are not happy.
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Maccas drive-thru fight caught on camera
ANOTHER brutal case of McDonald’s drive-thru rage has been caught on camera.
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This Business School Will Give You an MBA for Free. Here’s How to Apply
They say there’s no such thing as a free lunch. But what about a free business lunch? Or better yet, a free business degree?
Over at Arizona State University’s W. P. Carey School of Business, that’s now the name of the game.
The school recently introduced an innovative — and uncomplicated — scholarship program: Get in, and you get a full ride.
Yes, you read that right. If you’re accepted into Carey’s full-time MBA program for the fall 2016 semester, the Forward Focus Scholarship Program will cover all your tuition and fees.
How to Get a Free MBA
Though you have to keep the cost of room and board, books and lost wages in mind, that’s still a huge savings: The two-year degree normally costs $87,000 for out-of-state students!
The MBA program, which is ranked 30th in the nation by U.S. News and World Report, plans to accept up to 120 students for its 2016 class. It lists a 31% acceptance rate on its site, but we’re guessing it’ll become more selective with the advent of the scholarship program.
If you want to apply, you need to submit an online application, undergraduate transcripts, GRE or GMAT scores, two recommendation letters and a $70 application fee. The priority consideration deadline is Nov. 30, and the final deadline is Apr. 1, 2016.
It’s unclear if they will offer the scholarship in the future, so apply now if you want a shot.
“Although the amount of funding available may change from year to year, we will continue to invest in our students, our university and the future of business education,” Cathy Chlarson, Carey’s communications manager, wrote in an email.
Though some are calling this scholarship program a PR grab, we don’t think the school’s motive matters. No matter how you swing it, this is a great chance to take your business education to the next level!
Your Turn: Would you consider applying for the full-time MBA program?
Susan Shain, senior writer for The Penny Hoarder, is always seeking adventure on a budget. Visit her blog at susanshain.com, or say hi on Twitter @susan_shain.
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Taxi drivers ‘delivered cocaine to homes’
FOUR taxi drivers accused of running a cocaine delivery service have been arrested in dawn raids.
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5 Phone Calls Helped Me Save $788. Here’s What I Did
I’m always looking for ways to save money. With a husband and three kids, two of whom are in college, it’s a necessity.
Inspired by the “Challenge Everything” experiment at Budgets are Sexy, I decided to find extra money in our budget.
As I paid my bills last month, I examined each one closely to find a way to lower it — and then called customer service to make it happen. Here’s how five phone calls helped me slash our monthly bills by almost $800.
Get Ready to Plead Your Case as a Loyal Customer
I pay my bills on time each month and stick with the same providers year after year — I’ve been with one satellite TV company for 20+ years.
I used this to my advantage by expressing my loyalty to the customer service agents, but also asking them to lower my bill or risk losing me as a customer. I also brought up the company’s own ads offering bonuses to new customers.
Most companies want to keep their customers, and therefore have a retention specialist on hand. If you’re not getting anywhere with the first agent, ask to speak with this person.
Call #1: Phone/Internet
The first bills I tackled were the “extras” — any optional services where I knew there was room to negotiate.
Entertainment is a big expense in our family, since my husband and three sons all love to watch TV and play online games. But with two kids in college, did we really use our current package?
Our services are bundled, and we pay for satellite TV, Internet and a landline on one bill. (The landline is free as part of the bundle.)
When I explained to the customer rep I needed to lower my bill, he offered to reduce it by $12 a month for one year.
This single call to my Internet and phone provider saved us $144 for the year.
Call #2: Satellite TV
The satellite TV service is packaged with our phone and Internet, so cancelling it isn’t an option. I needed to make another call to talk to this company.
After reviewing the channels we watched, I decided to continue the service we have for now. I called the company and quoted their current offer for new customers, and stated I felt I should be rewarded for being a longtime customer.
Their first offer was a $10 credit, which I politely refused. After the second call, I was eventually offered a savings of $30 a month for three months for keeping the same service. As a bonus, they also offered me three months of free movie channels!
Total savings from call #2: $90 a year
Call #3: Cell Phone
I’ve been with the same cell phone company for the past 15 years and didn’t want to switch. So, I called and asked what they could do to keep me as a loyal customer.
Prior to the call, I examined my bill. I noticed I was paying for insurance on an older phone, so I dropped it and saved almost $7 a month.
Then, I was offered a $25 credit — which customers can receive every six months. I switched to paperless billing and earned another $10 credit.
Total savings from call #3: $109 a year
Call #4: Credit Cards
Next, I called my credit card companies to see if they could lower my rates. None can at this time, but I have several offers to transfer balances for 0% interest.
I also cancelled a travel rewards card with an annual fee of $85. I had received 50,000 points when I first signed up and used those points to book free travel. The company canceled the card and transferred my credit line to another card.
Savings from call #4: $85 a year
Call #5: Student Loans
I’m currently on the income-based repayment plan, and I updated my current income to save $30 a month. You’ll usually do this yearly, but you can also do it anytime you have a change in income.
While I was on the phone with the representative, I also made sure I was on track for the Public Service Loan Forgiveness program and verified I have made 5.5 years of qualifying payments on the 10-year plan.
This means I only have 4.5 more years until the rest of my loans are forgiven, since I work in public service.
This was my last and most successful call. After call #5, I was able to save $360 a year!
My Results
This whole system assumes you have excellent credit and are a loyal customer. If that’s not the case, it would probably be in your best interest to switch companies and take advantage of new customer bonuses.
Be polite, but never take the first offer. Remind the representative you are a loyal customer and should be rewarded. Ask for a lower bill or a one-time credit.
Here are the results of my five phone calls:
Phone/Internet: $144
TV: $90
Cell phones: $109
Credit card: $85
Student loans: $360
Total savings: $788 a year
I was on the phone for most of the morning, but the results were worth it. Now I have almost $800 to put toward college expenses for my kids.
Beware Service Charges
As a follow up to this challenge, watch out for service charges and change-in-service fees.
I hadn’t thought about these at all — what a shock to open my phone/internet bill and see a $200 fee tacked on!
I immediately contacted the company and asked them to please remove the charge. The fee was due to an early cancellation of my bundle offer. However, the company doesn’t offer that package any longer, so the fee should be waived.
Twenty minutes later, the customer service representative processed the forms, but said it was ultimately up to her supervisor.
After three more phone calls, I got the $200 charge removed — but it was an annoying extra hassle. Be sure to ask about any extra fees you might incur by cancelling services!
Your Turn: Have you had success calling companies to lower your bills? Were you charged any change-of-service fees?
Sallie Hamrick has been living the frugal lifestyle for as long as she can remember. Mostly out of necessity, she was living the “tiny home life” before it was cool. Sallie is a nurse and teacher, and she lives with her family in the country.
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Stop Paying for a Gym Membership You Don’t Use. Try These 5 YouTube Channels Instead
Staying healthy is one of the best investments we can make.
Doing what we can to stay in shape helps us avoid medical bills and missed work. But it also allows us to focus on growing our careers, nurturing our relationships and just feeling better all around.
When viewed through this lens, the money we spend on a gym membership is probably well-spent. (As long as we use that membership, which is the real challenge!)
But why not break a sweat without spending a penny?
YouTube hosts a growing number of workout channels that compete with your pilates instructor to bring you effective, quick, fun training sessions. And the best part is, they’re free — plus, you don’t have to leave the comfort of your living room.
Stay active without paying $50+ each month for an expensive gym membership with these YouTube channels featuring awesome at-home workouts.
1. Blogilates
This is my favorite place to go for quick, intense pilates workouts. Cassey Ho is a certified fitness instructor and all-around delightful online personality. Her mix of challenging workouts and body-positive encouragement make her videos fun and effective.
Earlier this year, her video “The ‘Perfect’ Body,” went viral with its message of blocking out negative messaging about outward appearance.
Who’s it good for? People who like variety, appreciate an instructor with personality, and don’t have a lot of workout equipment.
Top pick: I usually head to Cassey’s Angel series, which focuses on different parts of the body. The Angel Arms video will absolutely make you sore the next day, and only requires a mat and some hand weights.
Visit the Blogilates website to get a workout calendar that spells out which videos to do each day for the entire month.
2. BeFiT
On this channel, you’ll find options that mimic the traditional workout video feel: an instructor in front of a class.
These videos have high-production quality, energizing music and celebrity instructors. You’ll find videos with stars like Jillian Michaels, Jane Fonda and Billy Blanks Jr.
Who’s it good for? Former gym lovers who miss their group workouts. These videos make you feel like you’re attending your favorite class.
Top pick: Skip the DVD and go straight to YouTube for Jillian Michaels’ 30-Day Shred. It’s pretty amazing that this best-selling series is now available for free on YouTube.
The video shows modified versions of the workout to adapt to your fitness level, and once you’re comfortable with this one, you can move up to Level Two.
3. Scola Dondo
If you like your workouts with a side of dance moves, Scola is your gal. She uploads her high-energy workout videos from London, where she’s a certified personal trainer.
Scola isn’t one to yell: Her main demand is you try to be better than you were yesterday. Raised in Zimbabwe, Scola sets most of her videos to fast-paced afrobeat music.
Who’s it good for? Someone looking to break out of a workout rut and try something new.
Even though I’m a terrible dancer, I enjoy this workout, so I wouldn’t say that dance skills are required. The important thing is to keep moving.
Top pick: Afrobeat Werrrkout! I have never seen anyone enjoy themselves this much while working out. What this video lacks in production values, it makes up for with enthusiasm and a killer workout.
4. FitnessBlender
The selection of videos on this channels is really impressive. They have more than 350 workouts to choose from, geared toward both men and women.
The videos fit perfectly with the YouTube format, letting you choose which body part to focus on or select a video based on length. A companion website helps you put together a workout plan based around the FitnessBlender videos.
Who’s it good for? People who are serious about getting in shape and are ready to commit to completing longer workouts.
Top pick: Not for the faint of heart, the Upper Body Tabata Workout is 59 minutes of back, shoulder and arm training.
5. LiveExercise
This channel truly has something for everyone, from yoga to mixed martial arts. A variety of styles and levels make viewers feel welcome and comfortable.
Many videos focus on those new to exercise, kids and people struggling with obesity. The videos are also filmed live to give a real picture of the workout.
Who’s it good for? Pretty much everyone. If you’re just beginning an exercise regimen, this is a great place to start. The videos are unintimidating and engaging.
Top pick: If you’re a beginner, try the Seated Exercise for Obesity and Limited Mobility workout.
Meanwhile, the Mat Pilates video takes 45 minutes and requires no equipment besides a mat. It’s amazing how hard you can work (and how sore you can get) without lifting any weights.
Your Turn: Would you consider ditching your gym membership and working out with YouTube? What are your favorite fitness channels?
Lyndsee Simpson is a writer and editor living in Washington, D.C. She’s wearing her pajamas and working out on her living room rug.
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How to Invest in Africa
Africa is a potential powder keg of growth, but investors there undertake significant risk.
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This Mystery Shopping Job Pays More Than Others — Up to $200
You might’ve heard that mystery shopping is our favorite way to get free beer, groceries and extra cash.
Well, we recently received a great tip about some of the highest-paying mystery shops out there: video mystery shopping!
High Pay, Low Profile: Video Mystery Shopping
No, I don’t mean browsing Suncoast or Blockbuster Video, not that you’ll find one. (R.I.P to my favorite lazy date night activity — good thing The Penny Hoarder has other ideas.)
I’m talking about mystery shopping for furniture or scoping out apartments while covertly videotaping your experience. Spy-style.
Video shops have higher payouts than other mystery shopping experiences — $50 or more.
“The fee is higher because, in theory, we are dealing with a higher caliber of shopper,” explains Jenna Greenfield of Measure Consumer Perspectives.
Although some professional mystery shoppers purchase their own expensive equipment and undergo training programs, Measure lends amateurs a video camera and shows them how to use it for only a small rental fee.
No worries if you’re not a cinematographer, or if the last video you took was on your cell phone. (By the way, we checked, and cell phone footage doesn’t cut it. The quality isn’t high enough, and it’s less covert).
Instead, you’ll use a high-tech device that looks like a shirt button or pair of glasses — sweet, right?
Video shopping’s a good enough gig that you could do it full time, traveling from one shop to another, making hundreds of dollars a day.
If you want to become a professional video shopper, you might want to check out training programs through outlets like Video Shopping Pros or the IMSC (which is hosting an upcoming conference in Vegas).
Heck, you may even make up some of the lost health insurance benefits so many independent contractors face: Jenna says her company sometimes offers dental video shops that pay between $150-$200 — and include a free cleaning!
Ready to Go Undercover?
These positions are lucrative, so they fill up fast! You’ll want to get registered right away and be on the lookout for them.
Sinclair Customer Metrics and Reality Based Group are other outlets for video shopping jobs, but Measure Consumer Perspectives is our favorite since you don’t have to provide your own equipment.
Sign-up is quick and easy — you can even link it to your Facebook to save time entering redundant information. Then, you’ll be able to look through the shops available in your area — including these high-paying video ones!
Your Turn: Will you sign up to be a video mystery shopper?
Disclosure: We appreciate you letting us include affiliate links in this post. It helps keep the beer fridge stocked in the Penny Hoarder break room.
Jamie Cattanach is a junior writer at The Penny Hoarder and a native Floridian. She’s passionate about learning, literature, chocolate and finding ways to live the good life as cost-effectively as possible. You can wave hi to @jamiecattanach on Twitter.
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Could You Really Earn $15 Million Retrieving Lost Golf Balls?
Money doesn’t grow on trees. But maybe it lurks in shallow waters.
Glenn Berger says he earns about $15 million a year retrieving golf balls from water hazards in golf courses around Florida. He dives for balls, collects them, cleans them and resells them to driving ranges for a buck a piece.
It’s not exactly easy money — 15 million golf balls is a lot of golf balls. Perhaps even an impossible amount: According to USA Today’s math, he’d need to collect almost 4,000 golf balls a day, seven days a week — or to collect, en masse, a year’s worth of water-hazard balls at 34 or more different golf courses.
Glenn explains that run-ins with alligators and snakes are a regular part of his workday.
“I really don’t like to talk about alligators, but they happen,” he told USA Today in the video accompanying the article. “You learn how to deal with them.”
Sure, that’s a steep learning curve. But, uh, $15 million is a pretty nice salary. Is it really possible?
Diving for Cash as a Golf Ball Diver — But How Much?
It turns out there’s definitely an industry behind golf ball diving — but don’t quit your day job and grab your swim fins just yet.
Although the Bureau of Labor Statistics doesn’t collect statistics on golf ball divers specifically, its website suggests divers might earn about $200 a day.
With 260 work days in a year (that is, if you don’t take any vacation), that’s $52,000. But that’s a gross figure. As an independent contractor, you won’t receive benefits like health insurance, and you’ll be responsible for your own taxes.
Perhaps Glenn’s $1 per ball is an exorbitant outlier, especially since water does affect the integrity and performance of golf balls. A quick search reveals a forum for SCUBA divers advertising a golf ball diving job that pays 10 cents per retrieved ball, a figure that would lead to a more realistic bottom line.
One thing’s for certain: Glenn’s chosen the right locale. Florida is the home of The Player’s Club, Sawgrass and the PGA TOUR’s headquarters, and is widely considered the golf capital of the nation.
Because of the elite reputation of the course, players — even amateurs — who visit the TPC-Sawgrass course use high-quality balls that might sell for almost $50 per dozen. Such pricy balls resell well, even after they’ve been submerged, and ESPN reports that golf-ball divers make an annual income between $50,000 and $100,000.
Definitely not bad — but not $15 million, either.
So if you’re already SCUBA-certified and live down the street from a golf course, you do stand to earn some extra cash — just don’t start raking the real estate listings for mansions quite yet. Check out our post on how to start making money collecting golf balls!
Your Turn: Would you dive golf course water hazards for a living? Let us know in the comments!
Jamie Cattanach is a junior writer at The Penny Hoarder and a Florida native. She’s never played a game of real golf — and she’s so bad at putt-putt that if she did, golf ball divers would be making millions easily.
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How Credit Card Companies Make Money
Credit card issuers make money in a few different ways, like taking a small cut of each purchase you make. Photo: Visa
As a longtime credit card user (paying with — and paying off — cards since age 18), I’ve never really identified with the “credit cards are evil” mantra that seems to plague public opinion. I’ve cashed in points for airfare so my wife could get away for the weekend, and redeemed points for gift cards to give to clients. However, because I see so many reader comments detailing bad experiences with credit cards, I decided to do some investigating.
I found that the torch-and-pitchfork mob is often led by people who feel they’ve been sucked into credit card companies’ business models of deception, luring customers into paying high interest rates and late fees. But while interest rates and late fees are key revenue sources for credit card companies, by and large, they’re not exactly predatory practices.
Businesses need to make money. It’s our job as consumers to understand the various incentives and disincentives of the products we use so we can make informed decisions about our own money, and whether a business’s services are worth what we pay for them. Consumers need to understand how these companies operate in order to use their credit cards conscientiously and avoid destructive behavioral spirals.
Let’s explore the facts behind how credit card companies make their money and how you can use this information to make smarter financial choices.
A Credit Card Company’s Top Revenue Streams (and How They Affect You)
1. Merchant Fees
The revenue stream: When consumers pay for something using a credit card, they often assume that the retailer receives the entire payment. However, a small percentage of most credit card purchases (roughly 2% or more) gets gobbled up in credit card interchange fees. The bulk of that goes to the bank that issued the card used (for example, Chase or Capital One), while a portion also goes to the credit card association managing the account, such as Visa or MasterCard. (Those companies also charge their partner banks fees for their services, further adding to their revenue.)
Meanwhile, American Express issues its own cards and operates under a “closed-loop” network, meaning it acts as both the card issuer and the credit card association (as opposed to Visa or Mastercard). AmEx’s chief revenue stream is the fee it charges merchants who accept its cards, which account for a staggering 65% of the company’s revenue.
What this means for you: Interchange fees don’t really impact consumers as much as they do merchants, who receive only $97-$98 of a $100 credit card purchase. But even some very small businesses want to be able to accept credit cards to make it easier for their customers to make a purchase, so they are typically willing to pay credit card companies for their services.
While this may seem like an exploitative tactic, the credit card companies act as intermediaries for all parties involved in the transaction: issuing banks, cardholders, and merchants. They handle the complex behind-the-scenes components, including secure financial transfers and fraud monitoring, which is why they can demand these fees. As a consumer, of course, it means you don’t have to carry around a wad of cash or a checkbook to make purchases at most stores and restaurants.
What you can do about it: If you really want your local coffee shop to receive 100% of your purchase, then pay cash. One thing to keep in mind is that some retailers will add a 2%-3% surcharge on Visa and MasterCard transactions — which comprise 70% of all credit cards — to cover the interchange fees those companies charge. Luckily, merchants are required to disclose any credit card surcharges upfront and detail that extra fee on your receipt.
Keep a watchful eye out for surcharges when you pay with credit. Utility companies or government agencies such as the DMV will often add a surcharge if you use a credit card. I try to avoid using a card anywhere that adds this charge.
2. Consumer Fees
The revenue stream: While merchant fees make up a good portion of credit card companies’ revenue streams, they also collect fees from their cardholders — including annual, cash advance, balance transfer, and late fees.
For instance, let’s say you’d like to move your balance on one card to another with a lower interest rate. Most companies will levy a 3% balance transfer fee on your transaction — so if you want to transfer $5,000, you’ll have to pay $150 upfront.
What this means for you: Consumers who haven’t read the fine print are often shocked to discover the number of fees companies charge. Not only will they drive up your credit card bill, but incurring certain fees, like late fees, will damage your credit score, too. Keep in mind that fees can vary by card and issuer, so just because one company or one card doesn’t charge an annual fee, for example, that doesn’t mean another won’t.
What you can do about it: Make sure to find out whether there’s a fee and how much it is before you apply for a new card. Depending on your credit limit and the rewards program, that expense may outweigh the benefits.
Credit cards often come with a range of useful services such as balance transfer offers and cash advances. These can be incredibly helpful in a financial pinch, but they’re not without their costs. A cash advance might seem like the answer to your short-term money problems, but you could be paying that off for years. Talk to your credit card company about the charges, and look for alternative solutions that won’t cause you stress down the road.
If you plan to use a credit card while traveling overseas, research different companies’ foreign transaction fees. These can seriously increase your travel expenses if you’re not careful, so look for cards with low or no fees on international purchases.
Annual fees aren’t fun to pay, but they aren’t the enemy, either; some of the best rewards credit cards charge annual fees. Personally, I have about six credit cards that I use for specific purchases. When I’m deciding to open any new card, I always ask myself, “Does this offer a good return on investment?” A great rewards card might be worth a high annual fee if you use it enough.
Whatever your credit card situation — whether you pay your balances off each month or can only make the minimums for the time being — don’t ever make payments late. This is a careless consumer mistake that creditors make money off of, because they will charge late fees that can really add up on your total bill. It can also trigger an unwanted increase in your interest rate — which we’ll look at next.
3. Interest
The revenue stream: Interest payments undoubtedly provide credit card companies with handsome revenue — especially off of missed payments. A recent survey of 100 major U.S. credit cards found that consumers who fall two months behind on their credit card payments face an average penalty interest rate of 28.45%.
So let’s say you carry a $6,000 balance on your card charging 11.82% — the average APR. At the 28.42% penalty APR, you would have to pay nearly $1,000 extra in interest per year.
In 2014 alone, American Express made a net interest income of approximately $5.8 billion!
What this means for you: Because just a few missed payments can quickly spiral into serious debt, consumers often mistakenly assume that credit card companies want them to get in too deep. After all, that means more profits for the creditors, right?
In truth, while credit card companies do profit from the interest that accrues on overdue accounts, they don’t design their systems to trick customers. The more spending power cardholders have, the more money these businesses make, whether they carry high-interest balances or not. That’s why they provide cardholders with the options to set up automatic monthly payments and send out reminder notices ahead of their due dates.
What you can do about it: Set your account to send reminder alerts via text or email before your bill is due each month, and always pay your balance in full. And while credit card companies make it easy to pay, they can’t stop you from buying things you don’t need or can’t pay off. So every time you’re about to charge something to your credit card, ask yourself, “Can I pay this off on my next bill?”
If the answer is “no,” wait until you’re in a more comfortable financial position. Even a small purchase can quickly become a burden when you account for the interest over time. And paying the monthly minimums won’t help you once you’ve racked up enough interest on the debt. You also want to avoid maxing out your cards, because carrying high balances lowers your credit score.
Treat your credit cards like the finite amount of cash you carry in your wallet. In doing so, you won’t get sucked into the trap of buying more than you need — or can afford.
4. Sales Commissions
The revenue stream: Some credit card companies sell customers’ data to other businesses — particularly retailers that would like to garner better insights into consumer spending habits. Both American Express and MasterCard have profited off of this tactic. MasterCard sells data by ZIP code, which tells retailers what areas are more likely to make purchases. Then, online advertisers can take this data and create targeted advertisements.
What this means for you: Luckily, the data is anonymous and aggregated, meaning companies can’t single you out. However, many consumers aren’t happy to know that companies are profiting off of their personal information.
What you can do about it: This practice is, thankfully, on the decline. Make sure to read card agreements thoroughly to find out whether a specific company will profit off of your data and whether you can opt out.
The Bottom Line
When used responsibly, credit cards offer numerous benefits. Whether you simply don’t like carrying cash or you’re trying to build credit history, they’re convenient and valuable tools.
But there’s something to be said about their ability to separate you from your money. It’s easy to get carried away with your credit lines and blame credit cards for capitalizing on fees while you’re one late payment away from the poor house.
Credit card companies are out to make money — there’s no doubt about that. But it’s important for consumers to understand how those businesses make money, and where their own responsibilities lie.
The post How Credit Card Companies Make Money appeared first on The Simple Dollar.
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Want to Stay Healthy This Winter? Get More Sleep
Nobody wants to get sick, so do yourself a favor and get a good night’s sleep. Doctor’s orders. Photo: Anna Gutermuth
If you want to steer clear of the common cold this winter, a full night’s sleep should be your goal. That advice comes courtesy of a new study published in the September issue of the journal Sleep.
The study, which monitored and analyzed the sleep habits of 164 healthy adults over a period of several months, concluded that “shorter sleep duration, measured behaviorally using actigraphy prior to viral exposure, was associated with increased susceptibility to the common cold.”
Per the study, individuals who slept less than six hours were over four times more likely to catch a cold than those who slept longer and deeper. Meanwhile, those who slept less than five hours per night were 4.5 times more likely to get the sniffles.
The Anatomy of a Sleep Study
To consider these results in their entirety, the research team conducted two months of health screenings to analyze participants’ stress levels, overall health, and alcohol and drug use. Still, none of those factors mattered as much as a good night’s rest: Aric Prather, assistant professor of psychiatry at the University of California-San Francisco and lead author of the study, asserts that lack of sleep was the main predictor for catching a cold.
“Short sleep was more important than any other factor in predicting subjects’ likelihood of catching cold,” Prather told the Chicago Tribune. “It didn’t matter how old people were, their stress levels, their race, education or income. It didn’t matter if they were a smoker. With all those things taken into account, statistically sleep still carried the day.”
To be clear, researchers administered the cold virus to participants via nasal drops; they didn’t just wait around to see if they caught a cold on their own. But the study still proves one thing — less than six hours of sleep per night can lead to an increased risk of catching a cold when exposed to the virus. Further, those who slept more than six hours were better equipped to fight it off on their own.
How You Can Protect Yourself
With cold weather and cold season on its way, we all want to do our best to stay in good health. After all, it’s hard to tackle your to-do list from atop a pile of snotty tissues. And a sick day can mean lost wages for some workers, or cost companies billions in unproductive (or even destructive) work from cloudy-headed employees who go to work while sick.
So in addition to washing your hands frequently, avoiding direct contact with other sick people, eating a healthy diet, and keeping your environment clean (did you know that your office phone probably has more germs than the toilet seat down the hall?), it sounds like we should add some extra sleep to the agenda as well.
But that might be easier said than done. According a Gallup poll, Americans were getting an average of just 6.8 hours of sleep in 2013, while 40% were getting six hours of sleep or less. Further, 14% of those polled reported getting less than five hours of sleep each night on average, which puts them in the highest-risk group for catching a cold.
So, how does one go about getting more sleep? These tips from the Mayo Clinic can help:
- Sleep on a schedule. If you want to get a full night’s sleep, get in the habit of going to bed and rising at the same time each day. “Being consistent reinforces your body’s sleep-wake cycle and helps promote better sleep at night,” notes the Mayo Clinic.
- Steer clear of food or drink that keeps you up. Tobacco, alcohol, and caffeine can all put a wrench in your sleeping plans. And it also matters when you consume them, notes the clinic. The best advice: “Don’t go to bed either hungry or stuffed. Your discomfort might keep you up. Also limit how much you drink before bed, to prevent disruptive middle-of-the-night trips to the toilet.”
- Create a bedtime routine. According to the clinic, recent research suggests that using electronic devices before bed can make sleep harder to come by. Instead of clinging to your gadgets all night, create a routine that helps you wind down for the day.
- Make sure you’re comfortable. According to the experts, sleep comes easiest when you’re in the ideal sleep environment. “Often, this means cool, dark, and quiet. Consider using room-darkening shades, earplugs, a fan or other devices to create an environment that suits your needs.”
- Quit napping. This goes without saying. If you’re napping throughout the day, there’s a good chance you won’t be tired enough to sleep seven hours or more.
- Start working out. If you want to be tired at bedtime, it makes sense to “tire yourself out.” According to the Mayo Clinic, a good workout might just do the trick. “Regular physical activity can promote better sleep, helping you to fall asleep faster and to enjoy deeper sleep.”
- Deal with stress. To get the most — and best — night’s sleep possible, the clinic advises taking some steps to manage your stress levels. That can include getting organized, tackling some large or small projects that have been weighing on your mind, setting new priorities, or just taking a break.
The Bottom Line
If you want to avoid the common cold this year, aim to get as much sleep as you can. Research shows that getting less than six hours of sleep increases the likelihood of you getting sick, but you can reverse that risk by getting a good night’s rest.
And who has the time to be sick?
How many hours do you sleep each night? Do you feel like you get sick every year?
The post Want to Stay Healthy This Winter? Get More Sleep appeared first on The Simple Dollar.
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Should You Be Making Quarterly Tax Payments?
For some people, tax day comes four times a year.
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These Rebounding REITs Are a Smart Play for Investors
Market watchers say there are good values in REITs, particularly in certain areas of the sector.
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How to Save a Fortune at Apple: Coupons, Promo Codes, & Tricks
We love our Apple products around here, but they’re known for being pretty stingy when it comes to coupons and promo codes.
They want to be known as a luxury brand, so if you want to save any money, you’ve got to be in the know!
We reached out to insiders and today we’re revealing some of Apple’s top secret discounts. Our best advice is to stack several of these tricks for some insane savings.
1. Shop Through Discover & Get 6% Cash-Back
If you have a Discover credit card, you can use their cash-back shopping portal to earn a crazy 6% cash rebate on whatever you spend at the Apple store.
Here’s how this works: You earn your normal 1% cash back for using your Discover card, plus an additional 5% for using the ShopDiscover portal.
If you don’t have a Discover card, you can sign up for one here.
I don’t want you opening credit cards you don’t need, but if you’re planning a big Apple purchase, this might be worth it. For example, 6% cash-back on a Macbook Pro could be worth as much as $150!
2. Buy a Discounted Gift Card & Save 1-2%
One of my favorite hacks is to buy Apple gift cards at a discount through sites like Raise.com. Their marketplace matches gift card buyers and sellers, with discounts ranging from 1-2%.
They’re just regular gift cards, so you can them either in-store or online.
3. Teacher & Student Discount – Up to $200!
Apple offers incredible discounts to teachers and students. You just need a valid .edu email address. (Hint: Anyone can get an edu email address. Here’s how…)
You can can access the education portal here. They’re currently offering up to $200 savings on a new Mac and up to $20 on a new iPad.
4. Use Swagbucks
Arguably one of the easiest ways to save on Apple products is with the Swagbucks rewards program. Most of you are alright familiar with it, but did you know that you can also earn Apple gift cards for taking their surveys?
It’s not a ton of money, but most people are able to earn about $10 a month in free Apple gift cards.
Plus, they also have a cash back shopping portal that will pay you 1% on your Apple.com purchases. So, if you don’t have a Discover card, I’d recommend using this instead.
5. Buy Refurbished – Up to $450 Off!
Most people don’t realize that Apple has a special section of their site where they offer refurbished Apple products at huge discounts (up to $450 off).
Normally I’d be a little hesitant to buy electronics refurbished, but Apple tests, certifies, and include a 1-year warranty with all of these products.
6. Wait for Black Friday/Cyber Monday
The Apple store doesn’t usually offer Black Friday savings, but there are usually a few Apple retailers that do (Target, Walmart, Best Buy, etc.). Keep an eye on The Penny Hoarder’s Black Friday portal — we’ll be updating this with the sales as they’re released.
We hope this list helps you save a ton of money! Good luck Penny Hoarders!
The post How to Save a Fortune at Apple: Coupons, Promo Codes, & Tricks appeared first on The Penny Hoarder.
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Stock Market Showdown: How Marketplace Rivals Fare on Wall Street
Your favorite brand isn't always your portfolio's best friend.
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4 Tips for Using Rental Property for Retirement Income
The location and school district could make a big difference in your rental income.
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How to Avoid Holiday Burnout in the Office and at Home
These tips can help ease stress before the holiday rush.
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What to Do When You Get an Inheritance
There are several factors to consider before putting an inheritance into the stock market.
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6 Reasons to Start Your Holiday Shopping Early
There's no reason to wait when it comes to nabbing the best deals.
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Breaking Through the Money Scarcity Mindset
When I was a young child, my parents didn’t have a whole lot of money. My parents worked very hard to keep food on the table, clothes on our backs, a roof over our head, and a few gifts under the tree each Christmas, but we never had the resources to go on very many vacations and there were many things that we did not have.
My father worked in a factory that offered varying working conditions. Sometimes, he worked his regular hours and we got by. Sometimes, he’d get offered some overtime and things were good. Other times, he would get laid off and we wouldn’t have any steady income for a while.
To balance that out – and because my father is basically incapable of sitting still for very long – he always kept a number of side businesses going. He grew a huge garden and sold some of the extras, for one, but his big one was a small scale commercial fishing business.
Now, for those of you who are unfamiliar with the fishing business, it can be about as variable as you can imagine. You can fish all day long and catch virtually nothing, and then a week or two later you can haul in so many fish that your boat is on the verge of sinking.
What all of this added up to was a highly variable income for our family. There were times where there was very little income coming into our house, like when my father was laid off from the factory and the fish weren’t biting. At other times, though, money flooded in, when he’d be working overtime and fishing on the weekends and the nets were full.
During those times where the money flowed well, my parents often spent extravagantly. I remember my father once buying me a brand new video game out of the blue, something that never happened. I remember one particular Christmas where we had piles of gifts. I remember going to a local department store with my father when I was really young and I remember him buying me several action figures, and I remember practically being in disbelief at that opportunity.
It was a natural, understandable response to other times when money was tight.
However, it wasn’t the best response, and here’s why.
If you operate under that sense that money is scarce and you need to spend it when it’s available, you’re going to have difficulty ever saving a lot for the future. When my family went through those periods with plenty of money, they naturally wanted to celebrate a little because they had just been through a rough time.
However, the hard times would have been easier had my family saved more during the easier times. There would have been less stress and it would have been much easier to keep things running smoothly.
This is exactly the mindset that I had when I first started earning a healthy income. Just like when I was a child, I would see money sitting in a checking or savings account as money that needed to be spent now before it disappeared.
Why did I do that, though? Why did I have this feeling that I needed to spend every dime that I had available to me?
The book The 7 Habits of Highly Effective People by Stephen Covey offers a great theory that explains all of this. Here’s a quote from that book that outlines what I’m talking about:
Most people are deeply scripted in what I call the Scarcity Mentality. They see life as having only so much, as though there were only one pie out there. And if someone were to get a big piece of the pie, it would mean less for everybody else.
The Scarcity Mentality is the zero-sum paradigm of life. People with a Scarcity Mentality have a very difficult time sharing recognition and credit, power or profit – even with those who help in the production. The also have a a very hard time being genuinely happy for the success of other people.
The Abundance Mentality, on the other hand, flow out of a deep inner sense of personal worth and security. It is the paradigm that there is plenty out there and enough to spare for everybody. It results in sharing of prestige, of recognition, of profits, of decision making. It opens possibilities, options, alternatives, and creativity.
To put it simply, when I behaved as though my money would run out quickly if I didn’t spend it, I was buying into a scarcity mentality. Although I didn’t really understand it this way, I had this belief that I was effectively limited by each paycheck and each dollar that went into my wallet. There was this certain pool of money out there, created by my last paycheck, and if I didn’t spend it now and live now, my opportunity to do so might vanish.
I did view the world as though it were one big pie of resources. I had this one piece of that pie, but since that pie is a limited resource, so is my one piece. I am going to be beset on all sides by people who want more of the pie and are going to get it by taking from my piece, so I’d better spend it now. Today is the day to live, because tomorrow, my piece of the pie might be taken right out of my hands!
Often, people describe that mindset in terms like “you only live once” and “live for today, not for tomorrow.”
What I’ve come to learn over the last several years is perhaps the single most valuable lesson I’ve learned about personal finance, and it also spreads into many other aspects of life, too. It’s such a simple thing, but when it really clicks in your head, it makes everything easier.
The truth is that the world is an abundant place, a place that rewards you when you invest yourself in it. You can invest your money, your time, your energy, your caring, your friendship. When you invest those things, they grow over time and provide more for you than you ever put into them.
A while back, I wrote an article on strategies for cultivating an abundance mindset. Here are those strategies in a nutshell:
Have Appreciative Conversations
Organize Your Home and Your Life
Reduce Your Media Consumption
Share What You Have With Others
Try to Create “Win-Win” Situations
Look for Positives in Every Loss
Stop Comparing Yourself to Others
Keep a Gratitude Journal
While those ideas are great, what they really excel at is taking the seed of an abundance mindset that’s already in your head and help it grow, pushing aside thoughts of scarcity.
But what do you do before that?
What do you do if you’re locked into a money scarcity mindset? You have a sense that your finances can be better, but when you see money in your accounts you feel almost compelled to spend it before it disappears. You believe that the only way to get ahead financially in the world is to push someone else aside and take their piece of the pie. You’re constantly looking at strategies for getting rich quickly, such as network marketing systems. You are constantly jealous of the things that other people have.
How do you break out of that mindset in the first place? Never mind cultivating new perspectives – how do you stop thinking like that?
Here are four strategies that may help.
Look at the Things You Already Have in Abundance
There are many things you already have in your life that exist in incredible abundance. No matter what you do, you can’t possibly consume all of those things.
Think of the air you breathe. The feeling of your heart pumping blood through your body. The digestive action of your stomach. The warmth of sun on your skin. The endless variety of sights and sounds in the world around you.
Those things are boundless. You have these things in unlimited supply because of the infinite abundance not only in the world, but within you. The systems of your body are infinitely complex, yet they constantly give of their abundance to keep you alive. The sun shines with far more energy than everything on earth, but it just constantly gives its energy to the world. The air you breathe is in such abundance that even if you panted wildly for the rest of your life, you wouldn’t use it all up, and the plants and the trees would always make more.
If those things are boundless, then perhaps there are other things that are boundless in life as well. Surely there must be – after all, many people have found incredible wealth on this earth. People have made incredible discoveries about how the world works and continue to find new ones every day.
There is infinite abundance in so many areas of life if we simply look around and see them.
Look at Those Who Have Shared With You
If you go back through your life, you’ll almost always find examples of people who gave freely of themselves for you at some point.
Maybe it was a sports coach who stayed after practice to help you figure out the hiccups in your swing.
Maybe it was an academic advisor in college who spent hours listening to your troubles and being a mentor for you when you were struggling.
Maybe it was a supervisor at a previous job who went out of her way to help you figure out a good career path and then helped you take the next step forward, even though it wasn’t particularly helpful for her own career.
Maybe it was just someone in the community who stepped up to help you out in a moment of real need, not expecting anything in return.
Look back at those people. Were their lives made worse by giving freely to you? Likely, they weren’t. Most of the time, you’ll find that people who give so freely of themselves wind up with pretty good lives. They often have more than enough money to keep themselves happy and are surrounded with a huge network of friendships and relationships and a strong place in the communities they participate in.
Why is that? It’s simple – whenever they give freely of themselves, they end up receiving far more than they give in the long run. It’s not a strict transactional thing; instead, it’s more along the lines of someone getting an opportunity because they have a reputation of helping and caring for others. Someone is able to build a new friendship because they chose to give at the right moment instead of being selfish.
Remember, it really doesn’t matter what someone gives you in return in that moment for being unselfish. It’s not the transaction in that moment that matters.
Instead, it’s just a positive ripple in a pond that you share with a lot of other people. Your positive choice helps others in ways you can’t possibly see, and that ripples outward. Sometimes your name is connected with it, but often it’s not. Regardless, however, the whole community you’re in is lifted up and made better by your choice, and people who are in better positions due to the help of others are more likely to offer help in return – again, over the long run.
Realize That You’re Going to Lose Sometimes and That a Scarcity Mindset Makes the Effects Worse
One of the surest signs of the scarcity mindset is a strong fear of “losing.” People who are tied to the scarcity mindset are deeply afraid of coming out on the short end of the stick financially, emotionally, professionally, and otherwise. They are very wary of exposing themselves to any kind of risk, take defensive stances often, and use any capital they accumulate quickly because it might be “taken away” from them in some fashion.
The thing is, even if you act in that kind of defensive way and even if you pre-emptively spend your capital as fast as you can, you’re still going to wind up with the short end of the stick sometimes.
Why? “Losing” is just a part of life. It happens sometimes. You have big unexpected expenses. A friend doesn’t come through for you. You lose out on a big promotion or even lose your job. Those things can happen no matter what you do.
In fact, keeping a scarcity mindset makes this phenomenon worse, in two different ways.
First, it’s harder to ever “win” if you don’t expose yourself to a bit of risk sometimes. You can’t earn returns on your capital if you don’t invest that capital, and investing means risk. If you invest your money, it means risk. If you invest your time and energy and emotions, it means risk. However, if you do everything you can to avoid that investment out of a fear of loss, you will never earn the kinds of wins you are hoping for.
Second, you are more exposed to the bad effects of “losing.” If you don’t have any money in the bank because you spent it all out of fear of it “going away” or someone taking it from you, then you have nothing left when an actual bad event occurs. You don’t have the money to handle a car problem or a job loss or anything. The same thing is true with almost every other aspect of life – if you haven’t given of yourself in terms of time or energy or caring, why would others be there for you when you need them?
Another aspect of the scarcity mindset is the idea that if you come out on the losing end of the stick, you’re going to lose everything. You view your life as a house of cards and if someone pulls out a card, things are going to collapse. The idea of a job loss or a relationship failure creates apocalyptic visions in your head.
The truth is that even when things don’t turn out as you’d like, life goes on. Even in the worst scenarios, you still have your freedom. You still have clothes on your back and you’ll have a roof over your head somewhere. You can still feel the warmth of a sunny day and feel good when you hear a song that strikes your soul. You sit on wealth that can never be taken away from you – no matter what, you’ll have many things.
Accepting an abundance mindset into your life isn’t as scary as you might think because even if you do lose, you’re still left with a pretty good life. You still have more good things going on than you could possibly ever fully enjoy.
Take Baby Steps
The final strategy I can suggest for getting rid of a scarcity mindset is to take baby steps away from it.
No one is going to realistically wake up one morning and have a complete alteration in their world view and behavior (sure, it happens sometimes, but it’s rare and it’s usually just the culmination of a number of things). Instead, most change happens a step at a time, with one little change leading to another little change, then another, then a little bit bigger change until one day you wake up and realize things are completely different.
So, try something different. You may find it useful to try these things in a new environment or a new community, one where people don’t have a predefined viewpoint on you.
You can take a first step with your own finances. Simply automate a small savings program, putting aside money for your future self. Doing that is an act of abundance, because you’re essentially giving money to your future self, who obviously won’t be able to give you anything in return.
What you’ll find is that the simple act of giving money to your future self through saving has a ripple effect. It takes away some of the stress of everyday life. You’re no longer as worried about bills coming in or about the day-to-day stresses of your job. Not only that, when your future self actually uses the money, the money you set aside will have grown thanks to interest.
Take another step by mentoring someone, no strings attached. Give that person honest and detailed advice about how they can take positive steps in their career or personal life or hobby or whatever area you’re mentoring. Don’t expect that the person will ever do anything for you in return – just do it because it puts someone else on a more positive path.
You might never see a direct return from doing this, but you will notice some positives no matter what happens. Mentoring often helps you clarify your own ideas about success, helping you move forward. Each time you mentor someone, the next mentoring experience becomes easier.
What you’ll also find is that, over time, if you do it often enough, doors start to open for you. The people you mentor pay you back in subtle ways that you don’t see, by contributing to a positive reputation for you. They put in a good word for you in some conversation that you never hear. They give a positive report about you when someone is feeling out candidates for promotion. They also form the bedrock of a stronger community that you’re involved in, one that is able to support you in better ways.
Final Thoughts: The “Seed” Mindset
I like to think of the “scarcity” mindset as the harvesting mindset, and the “abundance” mindset as the seed mindset.
Think of yourself as a farmer (back in the days before hybridized and patented crops). In order to stay in business, you have to save some of the crops that you harvest in order to grow crops next year.
A person with a scarcity mindset will save only the barest amount of seeds for the following year. They’ll sell as much of their harvest as they can because that’s what they have in hand right now and there’s no way to know what future years will be like.
A person with an abundance mindset will save plenty of seeds for the following year, and will plant them thickly.
In the following year, some of the seeds will grow and some will not. The scarcity farmer might actually see a higher percentage of his seeds grow, but he had so few left to plant that he had a weak harvest. The abundance farmer might plant lots of seeds that never bloom, but even with a smaller percentage, he still has a field that produces far more than the scarcity farmer.
Spend at least some of your resources planting seeds for the future. You’ll never regret it.
Good luck.
The post Breaking Through the Money Scarcity Mindset appeared first on The Simple Dollar.
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11 Surefire Ways to Waste Money During the Holidays
Like egg nog, credit should only be used in moderation.
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Millions trapped in cycle of debt
Two million people are in credit card arrears, and 1.6 million people are being overcharged because they only make the minimum repayment each month, according to a new market report from the Financial Conduct Authority (FCA).
Another two million people have ‘persistent’ levels of debt, and many people are paying more because they bounce balances between cards.
Millions trapped in cycle of debt
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Two million people are in credit card arrears, and 1.6 million people are being overcharged because they only make the minimum repayment each month, according to a new market report from the Financial Conduct Authority (FCA). Another two million people have ‘persistent’ levels of debt, and many people are paying more because they bounce balances between cards. The regulator estimated it will take a decade to clear the balances of more than five million cards, if current repayment habits continue. And it said credit card companies benefit from this, and have no interest in helping troubled borrowers: “Consumers with systematic minimum payment behaviour or high levels of utilisation are profitable, suggesting that firms have little incentive to screen these consumers out or to intervene when they identify such behaviour.” The report also suggested competition in the credit card market is focused on promotional periods, leading to longer and longer ‘0% interest’ periods, at the expense of competitive standard rates. That’s borne out by Bank of England data, which shows the average APR charged on credit cards has remained stubbornly around 17.9% over the last year, while average rates charged on a £10,000 loan have dropped to a historic low of 4.25%. Hidden charges And the cost of 0% deals may be being pushed onto more vulnerable borrowers. In addition to large revolving balances, which carry higher interest rates, the FCA estimates that 5%-12% of all income for credit card companies comes from hidden foreign currency charges, default fees and higher interest rates on cash withdrawals for credit cards which ‘consumers pay little attention to’. Some unnamed firms were found to have been charging multiple rounds of fees per default. Yet despite these issues, the FCA’s interim report into the card market found for most people, the market is working ‘fairly well’. Commenting on the findings, Christopher Woolard, director of strategy and competition at the FCA, said: “This is a really important market in the UK. Around 60 per cent of adults have at least one credit card, and there is an estimated £61 billion in outstanding balances. “Our study suggests that the market is working reasonably well for most consumers, with a range of cards on offer. However, for a significant minority who are in persistent levels of debt, the market could potentially work better.” Caroline Siarkiewicz, head of UK Debt Advice for the Money Advice Service, added: “This report highlights some positive solutions for firms to identify the early warning signs of people who might be struggling day to day and experiencing financial difficulties. By intervening earlier firms could help to prevent problem debt.
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Top Jobs for People Who Hate People
By Emily Belcher In order to survive in todays’ world, one must have an income. In order to have an income, that means you’re going to have to find a job. Sadly, almost all jobs require some form of human interaction. Whether you’re writing a book or flipping a burger, it all goes to please […]
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Supreme Court rules £85 parking fine is not excessive
A man who challenged an £85 parking fine by taking it to the highest court in the UK has lost his case, with Supreme Court judges ruling that private parking fines should stand as long as they are not “excessive”.
Supreme Court rules £85 parking fine is not excessive
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A man who challenged an £85 parking fine by taking it to the highest court in the UK has lost his case, with Supreme Court judges ruling that private parking fines should stand as long as they are not “excessive”. Beavis, a fish and chip shop owner from Chelmsford, was issued with the £85 fine in 2013 by ParkingEye after he overstayed the two-hour free parking offered by a retail estate car park in the city. He says the charge should be ruled unlawful as it is "unreasonable and excessive". But he was forced to take his case to the highest court in the country after his claim was rejected by the Court of Appeal in April. That case has now been rejected by the Supreme Court The Court’s judgment stated: “The charge was neither extravagant nor unconscionable, having regard to practice around the United Kingdom, and taking into account the use of this particular car park and the clear wording of the notices.” John de Waal QC of Hardwicke law firm, who had advised Beavis during the case, explained: “The Supreme Court has decided that the charge is not a penalty because it is commercially justified, the reasoning being that such a charge is necessary to manage parking efficiently and deter overstayers. They decided that the charge was not excessive having regard to the level of charges imposed by local authorities. They also decided it was not unfair because it underpinned a business model whose object was the efficient management of the car park.” Beavis said the ruling meant the law has been changed “for the benefit of corporate profit and to the detriment of the consumer.” He added: “The doctrine of penalties has been re-written. Penalty charges are acceptable if they're not excessive. What's excessive? A Supreme Court judge thinks £85 is not excessive, but is it? To the man in the street? I guess if you earn £214,000 a year £85 isn't excessive. “The change in the law paves the way for other businesses to levy fines on unsuspecting consumers.” Beavis is now calling for the government to step in and introduce a regulatory body with a single code of practice, a single appeals process and regulatory powers to police private parking companies. ParkingEye said in a statement: “ParkingEye’s advice to motorists remains the same. If you have a genuine appeal of the charge, appeal to ParkingEye as directed on the Parking Charge Notices sent. If not, a 40% reduction of the charge is offered for early payment.”
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Most over-55s are behaving 'rationally' with their pension savings - are you?
Investors have withdrawn £2.5 billion in cash lump sums from their pension pots in the past six months since the new freedoms came into effect.
Most over-55s are behaving 'rationally' with their pension savings - are you?
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Investors have withdrawn £2.5 billion in cash lump sums from their pension pots in the past six months since the new freedoms came into effect. According to new figures from the Association of British Insurers (ABI), investors have mostly cashed in smaller pension pots - with 166,700 payments being made, averaging just under £15,000. In terms of drawdown, the ABI claims providers have made 606,000 income drawdown payments with an average of £3,600 - a total of £2.2 billion. Generally speaking, people have used their smaller pots for lump-sum payments and relied on their larger pots for retirement income. 'As expected, customers are taking smaller pots as cash and using larger pots to secure an income - about 40 per cent with an annuity and 60 per cent with a flexible income drawdown product,' says ABI chairman Paul Evans. 'Around half are now switching away from the company they saved with to secure the best deal for their retirement income. Overall, customers appear to be behaving rationally.' Annuity revival A report from Which? found that drawdown customers with a pot of £250,000 could face a difference of up to £10,000 in charges, depending on which provider they used, while last year the Financial Conduct Authority (FCA) found that four-fifths of people who purchased an annuity from their existing provider could have got a better rate elsewhere. Annuity sales have also made a surprise comeback, recording their first quarter-on-quarter increase for the last three years with 22,380 sold worth £1.17 billion. This represents a 23 per cent rise in sales volume and an 18 per cent rise in terms of amount spent. Will annuities get a second life? They still have a great deal of ground to make up before reaching anywhere near their sales figures from last year, however. Last month the ABI revealed that annuity sales had fallen by 80 per cent in the second quarter of the year. Dr Yvonne Braun, director for long-term savings policy at the ABI, says: 'Despite some ringing the death knell for annuities, this seems to have been premature. An increasing number of people are recognising the value of a guaranteed income, with annuity sales rising this quarter. 'There are also initial signs that the number of people accessing their pension pot as cash is beginning to settle down, with larger pots continuing to be used to buy retirement income products. 'However, the figures also show that ensuring people save enough for retirement remains our key challenge. With life expectancy increasing and final salary pension provision declining, we must now turn our attention to helping customers grow bigger pots.' Pinch of salt However, Hargreaves Lansdown's head of pension research Tom McPhail says one should take the ABI's figures with a pinch of salt. First of all, the data lumps together income drawdown withdrawals from arrangements made before the freedoms came into effect with those taken from plans actually established under the new freedoms - meaning the numbers are not strictly comparable with previous years as an indicator of how people are taking advantage of the new pension rules. Also, the ABI's figures are not representative of the entire market - leaving out data from Hargreaves Lansdown and other large drawdown providers. 'We have seen a series of reports on how the pension freedoms are working, with the ABI, HMRC and [FCA] all publishing data, and not all of it has been consistent. We think the FCA's probably looks the most relevant and reliable but we shouldn't be having to guess at this stuff,' says McPhail. In September, the FCA reported that 71,455 people had accessed some form of drawdown option in the first three months after the freedoms came into effect, while 120,688 people accessed some form of cash withdrawal. The watchdog also said annuity sales for the period stood at 12,418 - compared to almost 90,000 during the same period the previous year. Pensions consultancy Hymans Robertson estimates people will take a combined £6 billion from their pensions this year - meaning that the government will enjoy a tax take almost four times its original estimates.
Source Moneywise http://ift.tt/1Oql6CZ
HMRC leaves taxpayers scratching their heads
Half of all telephone calls to HM Revenue and Customs go unanswered - meaning many people with questions about the complicated UK tax system are being left adrift.
HMRC leaves taxpayers confused
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Half of all telephone calls to HM Revenue and Customs go unanswered - meaning many people with questions about the complicated UK tax system are being left adrift. According to a scathing new report from Parliament's Public Accounts Committee, HMRC answered three-quarters of telephone calls during 2011/12, a level already criticised as 'abysmal'. But in the first half of 2015 the number of calls answered fell even lower - to 50 per cent. In fact, the report claims that in 2014/15 only 39 per cent of calls were answered within five minutes. 'We are concerned that customer service levels are so bad that they are having an adverse impact on the collection of tax revenues,' the government says in its report. A spokesperson for HMRC responds: 'We explained to the committee that we hadn't provided a consistent level of customer service in the first half of the year and we had recruited around 3,000 new staff to improve service levels. But these customer service issues did not affect our ability to collect tax.' But according to its annual report, HMRC has cut 11,000 'full-time equivalent' posts since 2010. Mark Serwotka, general secretary of the Public and Commercial Services Union, says HMRC is struggling under the strain of severe budget cuts. 'It has been abundantly clear for years that the department has cut too many staff and that services are suffering. The department needs major investment backed by real political commitment to tackle evasion and avoidance as an alternative to more damaging spending cuts.' The HMRC spokesperson adds: 'We are disappointed that the Public Accounts Committee has overlooked HMRC's record results, which include collecting a record £517 billion in tax revenues and further reducing the UK's "tax gap" - the difference between what is due and what is collected - to ensure it remains one of the lowest in the world.' Lack of accountability However, the government report slams the tax collection agency's ability to close this gap, pointing out that HMRC's own measure of the tax gap excludes aggressive tax avoidance schemes that are technically legal but go against the spirit of the law. HMRC also came under heavy criticism for its lack of accountability - in terms of both tracking aggressive tax avoidance and the amount of tax foregone via legal tax reliefs. Regarding the latter, HMRC lists 400 existing tax reliefs, but the Office of Tax Simplification says there are in fact more than 1,400. Finally, the report also said HMRC was being lax on wealthy offshore tax avoiders, prosecuting only 11 since 2010. Since a former HSBC employee leaked the Swiss bank account details of 3,600 potential UK tax evaders, for example, only a single person from the list has been prosecuted. 'The vast majority of UK individuals pay what is due from them in tax. Those who do not must in future know that they could face prosecution if they deliberately seek to evade paying what is due in tax,' the report says. The spokesperson for HMRC adds: 'Tackling tax evasion is a top priority for HMRC and last year alone we successfully prosecuted a record 1,200 cases [mostly onshore], resulting in 407 years of custodial sentences. 'We also routinely publish the number of tax avoidance schemes, which show a steady decline as a result of tough government action. We brought in more than £1 billion from the first year of applying accelerated payments and have closed many loopholes and secured tough new enforcement powers.'
Source Moneywise http://ift.tt/1Sr8hXK
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