Archive forJuly, 2012

DC derecho: Storm that hit capital was fast, destructive — and rare

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Personal Finance: Tips from Jean Chatzky

When it comes to personal finances, Jean Chatzky is seemingly everywhere.

From TV to blogland, she dispenses smart advice as a financial editor on NBCs Today show, her own website and as the author of eight books on money matters, including her newest, Money Rules.

Last month, she debuted as the new financial ambassador for AARPs monthly magazine and its website. Following her inaugural column, Six Smart Moves To Make in a Scary Economy, we caught up with Chatzky by phone from New York. Heres an excerpt:

Even though were told the recession is officially over, it still doesnt feel that way for many people. Is that why you call this a scary economy?

If anything, what weve learned coming out of the recession is that its not an event, its a process.

Some of it is driven by the markets volatility, even if youre not an active (stock) trader. If youve got retirement accounts with ETFs or target date funds, the volatility is scary.

To feel in control, you recommend that consumers first create a financial road map. Can you elaborate?

The most important number people need to know is: How much do I need to be saving to get to my retirement goals? Half of all Americans have never run the numbers on what retirement will cost, what theyll need to live on month to month.

You start there: Figure out what youve got, what youll expect from Social Security, your rate of return on investments and savings. Dont assume youll earn the 12 percent a year that you could during the markets heyday. Plan on a conservative 6 percent #x85; in a diversifed stock portfolio over the long term.

Go to the Ballpark E$timate retirement calculator at Its not the most elegant retirement calculator out there, but its very easy to maneuver and asks the right questions.

If you feel like you cant do that, pick up the phone and get some help. Im a fan of certified financial planners #x85; and fee-only financial advisers. Or if you already have an accountant, talk with them. The important thing is to do it.

Is your advice different for those in their 20s and 30s, as opposed to those in their 50s and 60s?

The most important thing for 20-to-30-year-olds is just saving as much as they possibly can #x96; in IRAs, 401(k)s or (other) vehicles. Savings give you options down the road. Theres so much research in behavioral finance that says the very best way (to save) is to make a good decision once. Set up automatic payroll deductions so you dont see the money coming out of your paycheck. With a 401(k), youre aiming to save as much as you can to reach (your employers) matching dollars. Or save 10 percent of your monthly paycheck.

Paying down debt is one of your mantras. Where to start?

If you havent dropped down every interest rate on your credit cards or refinanced your car loan or your mortgage, do so. #x85; Its money in your pocket.

If you dont have the credit score to qualify for lower interest rates, you have time to work on it. With credit cards: Stay current on monthly payments; pay down the debt so your utilization rate improves; dont apply for new cards; dont close old credit cards. They all play into the mix.

To rent or buy: How do you decide what to do in this crazy housing market?

If youre not going to be there five years or more, Id rent. If you are going to be there at least five years, look at what it costs to rent vs. buy in your part of the country. You need that time horizon to weather the ups and downs. The appreciation may not be there. I bought in May 2005 (in Westchester County, NY) and I was right at the peak. So if I sold today, I wouldnt recoup. But Im not leaving.

Youve got one teen in high school and one going off to college this fall. What are your money guidelines with your own kids?

My kids have debit cards and have been managing them online for a while. Thats how I transfer money to them: an electronic allowance, so to speak. With their cards, they dont have overdraft protection. If they run out of money, the transaction is denied.

For college, I will probably add my son as an authorized user to one of my credit cards and make sure it reports to the credit bureaus (to build up his credit score).

Now that the Supreme Court ruling upheld the Affordable Care Act, what should consumers be doing to help lower their health care costs?

People should be shopping around for health care policies. They shouldnt believe the deal offered by their employers is the best one. For some families, its better to have one spouse on one employers plan and the other on a different plan.

Id start with, which has (a large) selection of policies. You can get a sense of rates in your state and figure out if you can get a better deal shopping outside your employers plan.

Reverse mortgages are getting scrutiny by the new Consumer Financial Protection Bureau, which is concerned that some seniors may not understand what theyre getting into. Any advice on reverse mortgages for those over 62?

I think theyre certainly not a panacea. They tend to be expensive. Youve always got to ask if youd be better off by trading down to a smaller house or moving to a city thats less expensive. Take a look at your options.

If your parent is considering a reverse mortgage, go with them (to the mandatory HUD-required counseling session). Reverse mortgages are complicated. Be sure everyone in the family understands.

#x95; To see more of Jean Chatzkys money tips, go to:

copy; Copyright The Sacramento Bee. All rights reserved.

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Pranab failed as Finance Minister, says Sushma

Leader of Opposition in Lok Sabha Sushma Swaraj, praising presidential candidate PA Sangma, said Presidential elections will open an era of change in the country.

A skilled politician like Sangma is competing against Pranab Mukherjee who has failed as a Finance Minister of the UPA-led Central Government. Due to Mukherjee only, the country was in economical trouble. Mukherjee was not fit to be President as he was not capable to handle the present situation in the country, she said.

Mukherjee was chairman of an organisation in Kolkata while filing his candidature. When attention was drawn towards this, he wronly left the post; Swaraj distributed the evidence of it among the electorate.

Swaraj said in the last 60 years of existence of India as an independent nation, first time a tribal candidate has stood up for the highest post of the country. BJP have 21 per cent vote and around 14 parties have agreed to support BJP in the presidential election while 14 more are expected to forward their support soon.

Swaraj further said then Prime Minister Atal Bihari Vajpayee discussed with Sonia Gandhi and Mulayam Singh Yadav before forwarding APJ Abdul Kalam’s name for candidature in presidential election of year 2002, by that BJP took support of Opposition, discussion of candidature after declaring the name is surrender.

BJP is supporting independent candidate Sangma because of his capability as a leader and BJP expects the miracle of his victory, added Swaraj.

BJP State president Prabhat Jha welcomed the guests and Chief Minister Shivraj Singh Chouhan said BJP is a party with ideology of public representative. Sangma is himself an ideology; he has been Member of Parliament for nine times and 16 as a Cabinet Minister.

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Finance chiefs turn to EU’s unfinished business

BRUSSELS (Reuters) – Euro zone officials are cautioning against expecting any quick action from the currency blocs finance ministers when they meet on Monday to sort out the tangle of loose ends and disagreements left by last months EU debt-crisis summit.

Banking supervision, the use of European Union bailout money, aid to Spain and Cyprus and how to deal with Greece — together it could take months to finalize, despite pressure from financial markets for clarity on the details.

Leaders from the 17 nations sharing the euro reached a deal in the early hours of last Friday to give the European Central Bank greater oversight of the blocs banks and to use the euro zones rescue funds to reduce countries borrowing costs.

But after going beyond what many diplomats, finance officials and investors had expected, critical elements were left vague. Time-frames may already be slipping and opposition is building in euro zone hardliners the Netherlands and Finland.

You have a Finnish problem. You have a Dutch problem. You have a German problem too, said one euro zone diplomat, pointing to the reservations of those countries about what was announced at the summit and German Chancellor Angela Merkels reluctance to help its partners without strict conditions.

The meetings crowded agenda may hamper progress. Discussing an aid package for Spains banks, dealing with a request from Cyprus for emergency help, and whether to ease the conditions of Greeces second bailout are also on the table.

Euro zone leaders have committed to ECB-led supervision for banks, which would then allow the permanent rescue fund – the European Stability Mechanism (ESM)- to recapitalize banks directly, rather than having to lend to governments.

That is seen as a major concession to Spain, which has requested a bailout of up to 100 billion euros ($125 billion) for its banks, but does not want to see that money added to its national debt and possibly push it towards a sovereign rescue.

Leaders agreed to remove the ESMs preferred creditor status when it lends to Spain, to calm investors who were worried they would not be repaid the money they had already lent.

They also decided that the ESM and the euro zones temporary bailout fund, the EFSF, can buy euro zone bonds at auction and in the open market to lower borrowing costs, with some conditions attached but without a full program.

Potentially demystifying the ESMs role once it becomes operational this summer, one senior euro zone official said on Friday that countries who requested its aid for their banks would still need to provide guarantees. That might assuage German concerns about the ESM taking on too much risk.

The official said that if the ESM took an equity stake in a bank it would only be with a full guarantee by the sovereign concerned although he signaled this requirement could change in the very distant future.

Does it still remain the risk of the sovereign or does it become the risk of the ESM? It remains the risk of the sovereign because you have the counter guarantee of the sovereign, the official said.


In their summit statement on June 29, leaders told the Eurogroup of finance minister to implement these decisions by July 9. That now looks optimistic.

Much depends on the ECBs crucial role as supervisor, which will need to be grounded in European law. It falls to the European Commission to propose such legislation, which is not expected until at least September.

It will take at least until the first half of next year to be implemented, said Douglas Renwick, a director responsible for government credit ratings at Fitch Ratings.

The senior euro zone official echoed that sentiment, saying he saw the supervision ready only by the middle of next year.

Despite the obstacles to the broad package outlined by leaders, the range of measures agreed allow some short-term action, and vocal opposition to euro zone bond buying in the Netherlands and Finland is unlikely to ruin those plans.

Finland has said it opposes bond-buying in secondary markets, because it considers such purchases to be ineffective.

In emergency cases, the ESMs treaty allows for decisions to be taken with an 85 percent majority, and the Netherlands and Finland only account for 8 percent combined.

The ESM discussion is being complicated by politicians talking to their electorates, but I think there is a consensus to move ahead with what was decided at the summit, said another euro zone official, briefed ahead of the Eurogroup.


If only things were so straight forward for southern Europe.

Greeces new Finance Minister Yannis Stournaras said on Thursday he had been warned to expect a tough time at the Eurogroup, having acknowledged Athens was off course on its pledges linked to a 130-billion-euro rescue.

Ministers will discuss the findings of the troika of the European Union, the European Central Bank and International Monetary Fund from their first mission to Greece since the June 17 election. Another mission is due to return later in July.

There will be no disbursement to Greece until the Eurogroup has determined the program is back on track, said the senior euro zone official, speaking on condition of anonymity because of the sensitivity of the matter.

Greeces Prime Minister Antonis Samaras wants to ease the terms of the bailout, but that would mean more money for Athens.

Even if the second program as it stands were fully implemented, it is not clear that market access could resume (in 2015), said David Mackie, an economist at JP Morgan. A third program seems likely in any event.

For Spain, ministers are unlikely to sign off formally on an aid package for its banks as they are still awaiting an expert report on the situation, despite expectations of a July 9 deal.

(Writing by Robin Emmott. Editing by Jeremy Gaunt)

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The Business Finance Store Discusses Small Business Relocation

The Business Finance Store discusses some considerations for businesses to maximize their economic benefit while relocating.

Santa Ana, CA (PRWEB) July 08, 2012

The City of Indio proposed a tax on future ticket sales of the annual Coachella musical festival, CNN reported. However, the proposal was withdrawn after threats to move the festival to a new location, NBC Los Angeles reported. The festival is a large source of revenue for the city. This is just one example of a business moving to (or threatening to move) to a more advantageous locale under economic pressure. For small businesses facing similar economic walls from their local community, relocation might be a legitimate consideration. In the recent blog post “Relocating Your Business to Yield Long Term Savings,” The Business Finance Store discusses some considerations for businesses to maximize their economic benefit while relocating.

Local or state taxes may have spiked in the area where a business was headquartered for the last several years. This might create an incentive for a small business to relocate to a more favorable location. However, before moving, small business owners might want to consider some of the expenses that come up when moving shop. Read more about relocating a business at The Business Finance Store Blog.

The Business Finance Store is a business financing and consulting firm that offers customized Business Financial Solutions. Seasoned professionals offer assistance in a variety of financial solutions to help small businesses succeed such as: Business Financial Solutions, Legal Solutions, and Accounting Solutions.

The staff at The Business Finance Store understands that starting and growing a business is an exciting time. They keep it exciting by taking care of some of the most difficult aspects, by providing legal advice, helping with vital responsibilities like accounting amp; bookkeeping, and by obtaining business finance. They can quickly and easily guide entrepreneurs through many different complicated processes and put them on the path to success.

For 10 years The Business Finance Store has been helping startups and other small businesses legally structure their companies, find the right franchises, get the funding they need, and achieve the American Dream of owning their own successful business. Since expanding nationwide in 2007, they have helped thousands of companies and have funded over $60 Million in business credit lines, not including SBA loans. The Business Finance Store sees limitless potential in the current climate, and looks forward to many strong years of growth to come. Take some time to review their services, and give them a call.

For more information, or a free, no-obligation analysis of your business needs, visit The Business Finance Store website: A member of their professional staff will contact you to discuss your business short and long-term goals. Whatever you need, The Business Finance Store is there.

For the original version on PRWeb visit:

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Personal Finance: 4 key items to seek in 401(k) reports

It’s easy to overlook what’s important when it comes to saving money. Many people would sooner clip a toothpaste coupon than review their retirement accounts to assess whether they can minimize investment fees.

Consider the potential savings from choosing low-cost investments and having the good fortune to participate in a 401(k) plan that charges relatively low administrative fees.

Let’s say you have $20,000 in a retirement account. If you assume you can earn a net return of 6.5 percent a year — 7 percent from investment gains, minus a relatively modest 0.5 percent in fees and charges to run the plan — the account would grow to $70,500 in 20 years. Boost the fees to 1.5 percent, and the account will grow to just $58,400. That’s $12,100 less because of a percentage point difference in fees and charges.

“It’s not until the differences are laid out in terms of dollars that people actually take a step back and say, ‘Wow, I should do something about this,”‘ says Bo Lu, CEO of FutureAdvisor, a Seattle-based firm that assesses 401(k) plans.

The problem is that 401(k) fee disclosures are typically ignored or quickly tossed aside. That’s because the charges can be so complex, numerous and hard to find that they’re nearly impossible to add up.

But this summer, 401(k) accountholders should keep a close eye on their mailboxes and email. They’ll receive new fee disclosures from their employers containing much greater detail about what they’re paying to invest in these tax-advantaged plans.

The various costs will be consolidated into one document — albeit one lacking an at-a-glance summary of how much you pay overall. Most investors will get disclosures running seven to 12 pages, says Dave Gray, a vice president with investment manager Charles Schwab. Expect documents that are “wordy, with a bit of complexity,” he says.” What it really is is a price list.”

Most investors can expect to get the new disclosures by Aug. 30. Employers must send the disclosures once a year, and more frequently if the employer makes midyear changes to the plan affecting costs.

The disclosures are the result of 401(k) regulations set by the Labor Department. Beginning this month, investment companies that administer 401(k)s are providing new disclosures to employers that sponsor the plans. Employers must then share their own disclosures with employees, detailing plan costs that participants bear.

Here are 4 key items investors should look for in the documents:

1. Investment fees. These are fees paid to the managers of each mutual fund that an investor chooses. These managers — often called “investment advisers” in disclosures — select stocks, bonds or other investments that 401(k) assets are invested in. These fees make up at least two-thirds of overall plan costs, so details about these charges are the most important to review.

The disclosures will show the expenses charged by each investment option in the plan. Each mutual fund has a specific expense ratio — the ongoing expenses to cover operating costs, expressed as a percentage of a fund’s assets. An expense ratio will be listed, along with an equivalent dollar amount for every $1,000 invested. “That number for many folks is going to be quite eye-opening,” Schwab’s Gray says. To determine what you’re paying, you’ll need to tally the expenses for all of your specific investments.

It’s not a simple matter to determine what constitutes high fund expenses because costs can vary widely. Funds investing in US stocks typically charge less than those specializing in foreign stocks, and bond funds typically cost less than stock funds. Index funds seek to match the market rather than beat it, and generally charge lower fees than managed funds because they don’t rely on professionals to pick stocks or bonds. A study by the Investment Company Institute, an industry group, found that investors in stock index funds paid an average 0.14 percent in expenses last year, while investors in managed stock funds paid 0.93 percent, nearly seven times as much.

If you’re looking to cut costs, and realize you’ve invested in funds charging high fees, consider making some adjustments. Most plans allow such changes with minimal hassle or expense.

2. Administrative costs. These may come as a surprise because they cover back-office operations that many investors don’t know they’re paying for. Among them are costs to provide online account access and to track daily changes in the values of investments offered in the plan. Then there are custodial costs for the bank entrusted with holding plan assets. Some plans also offer investment advice that can be costly.

Even with easier access to data on these expenses, investors will have little basis for deciding whether the administrative costs are too high. That’s because the disclosure rules don’t require that a plan’s costs be presented in comparison with average fees at other plans, or some other benchmark. Comparisons are difficult because several different companies may play roles in administering a plan, leading to layers of fees shared among the plan provider, the employer and participants.

3. Transaction costs. These include charges to borrow from a 401(k) and make withdrawals. Also review commissions and charges at plans that enable participants to trade individual stocks within their account or select other investments not offered as options within their plan.

4. Where to get help … or complain

Look for phone numbers and websites where you can get more information.

If you’re still dissatisfied, team up with co-workers to assess your company’s plan. If there’s a consensus that the plan falls short on expenses or investment options, collectively approach company officials overseeing the plan to see if changes can be made. At a small employer, that may be the treasurer or CEO, while at a larger company it’s often the human resources or benefits staff.

“You’re probably going to be in this 401(k) for a long time, so it’s your right to continually ask questions,” says Greg Carpenter, CEO of Employee Fiduciary, a Mobile, Ala.-based adviser to companies offering 401(k)s. “The disclosure you get shouldn’t be the end of your employer’s commitment to you. So don’t be afraid to make noise.”

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Joint Eurogroup presidency unlikely: French finance minister

AIX-EN-PROVENCE, France (Reuters) – French Finance Minister Pierre Moscovici poured cold water on a media report on Sunday that France and Germany could split between them the presidency of the Eurogroup of euro zone finance ministers.

The mandate of the Eurogroups current chairman, Luxembourg Prime Minister Jean-Claude Juncker, expires at the end of the month but officials signaled last month that his term could be extended.

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Quinn signs campaign finance law loophole

Gov. Pat Quinn signed a bill Friday that lifts the states campaign contribution limits to candidates once big money starts flowing into a state or local political contest, a move that one watchdog group decried as effectively ending limits in any major race.

The measure is a response to a court decision that threw out parts of the Illinois campaign finance law imposed in the wake of the heavy-handed fundraising tactics of Democrat Rod Blagojevich, the impeached former governor now serving 14 years for corruption in federal prison. A federal judge ruled political action committees that act independently of a candidate are not bound by Illinois campaign contribution limits.

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Personal finance: Scandals set to scare off many from investing in banks

JURY is out on whether to buy into institutions as yet again big names are shamed, writes Jeff Salway

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Donors finance Oregon’s initiatives

If the eight initiatives pending for the Nov. 6 statewide ballot are any indication, the days of do-it-yourself petition drives are long over in Oregon.

According to reports filed with the secretary of state Friday, also the deadline to file petition signatures, spending by sponsors to qualify the initiatives topped $4 million.

The most spent was $1.1 million, contributed largely by the National Association of Realtors, for a measure barring new real estate transfer taxes.

The least spent was $338,000, bankrolled largely by a national group based in Portland, for a measure legalizing adult use of marijuana and allowing the state to regulate its cultivation and sale, and to tax it. Musician Willie Nelson contributed $10,100 to the effort.

In virtually all cases, there were a handful of major donors or just a single donor.

Public employee unions put up the money behind an initiative to divert excess corporate income-tax collections into state aid to public schools, instead of rebating the money to businesses.

Norman L. Brendon, president of Hawthorn Retirement Group in Vancouver, Wash., put up most of the money for an initiative to ban commercial gillnetting on the Columbia.

For the proposed phase-out of Oregon’s estate tax, Common Sense for Oregon contributed 95 percent of the sponsors’ money at $402,000. The group is led by Kevin Mannix, a Salem lawyer, former legislator and initiative promoter.

But according to state reports, the political action committee of Common Sense for Oregon has raised only $2,485 this year. Reporting of its contributions might lag behind the spending because initiative spending reports must be filed when petition signatures are due.

For the two measures proposing a private casino east of Portland, Portland Entertainment Corp. put up all of the nearly $1 million. The chief petitioners are Lake Oswego businessman Bruce Studer and lawyer Matt Rossman, who sponsored a failed 2010 measure. They are thought to have a Canadian investor.

Sponsors for all eight initiatives submitted by Friday’s deadline relied on paid signature gatherers.

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