Personal Finance

Flickr | http://www.flickr.com/photos/28122162@N04/5777171060/ Memorial Day: the one day every year we come together as a nation to honor the men and women who fought for this country. Filled with tradition and festivities, this weekend has long been felt as the unofficial start to summer. Millions of Americans will head to the beach this weekend, while others may take advantage of all the great shopping deals out there. No matter what you decide on, make sure you get some great food, ice-cold drinks and enjoy the weather. This weekend calls for some great times and memories. We list five frugal ways (and some delicious recipes) for you to enjoy this weekend and kick start your summer with your friends and family. Related Stories: Money Chat: What Was Your Best and Worst Money Decision? Travel Prices are Going Up This Summer The 5 Coolest Summer Jobs You Wish You Applied For 5 Frugal Ways to Celebrate Memorial Day Weekend

[The following is a guest post from Chloe Mulliner. She is a writer and editor for CreditSources.org, a website dedicated to information regarding personal loans and all things credit.] A recent 2013 Consumer Federation of America and VantageScore Solutions survey of 1022 Americans uncovered that many adults don’t know much about their credit scores. The results revealed that between roughly one-quarter and two-fifths of the survey subjects were unable to correctly answer credit related questions ranging from who collects credit information to what affects credit scores. So if this were a battle of the sexes, who scored better, men or women? The survey results showed that women consistently answered more questions correctly than the men. Overall, according to the survey, women have a better understanding of what contributes to credit scores and the importance of checking them. For starters, more women (74%) than men (68%) realized that credit bureaus are responsible for collecting consumers’ information for credit scores. And when it came to the factors that these credit bureaus use to determine credit scores, only 38% of women believed that age affected their scores, while 48% of men thought that age had some value. Similarly, just 34% women thought that marital status could contribute to one’s score compared to 46% of men who believed marriage played a role. Just to get the facts straight, yes, credit bureaus report consumers’ information, but they do not use age or marital status to calculate the scores. Typically, the only way that a couple’s marriage will affect their individual credit scores is if they have joint accounts. Missed payments and current balances on a joint account will appear on both of their credit reports. As for identifying a good credit score over a bad credit score, 36% of women were more in the know than just 29% of men who understood the differences. Generally credit scores range between 300 and 900, depending on the scoring system, but the higher the credit score, the better the score. Although the women took the lead in correctly answering the majority of questions, the men did have better luck than women when questioned about credit repair companies. Only 32% men believed in the legitimacy of credit repair agencies compared to the 40% of women who saw these agencies as helpful. Men, more than women, understood that consumers need to remain skeptical of the services that credit reporting agencies offer. Regardless of whether the women outdid the men or not, these statistics are rather alarming considering how much consumers’ credit scores can affect their financial lives. The results of this survey reveal that both men and women need to brush up on their credit scores and realize the importance of maintaining good credit scores. [Editor's Note: I have to stand up for my fellow men here who thought that age had some value in a credit score. Credit scores take into account the age of credit accounts. This means that younger people are at an inherit disadvantage and that disadvantage is reflected in a lower credit score on average. Also it's interesting that when the men perform better, it's attributed to "luck." Grrrr...]

There was a period in 2009 when U.S. commercial real estate was a genuine source of nervousness among professional investors. Some feared the market would collapse the way residential real estate had in parts of the country. When I blogged about it in August 2009, U.S. valuations were off 35% relative to October 2007. In Canada, one estimate had prices down 15% or more from their 2007 highs. It didn’t take a Bloomberg machine to understand that a significant decline in U.S. commercial real estate could do a lot of harm. The global economy was fresh off an historic financial crisis, and more than a few feared a commercial real estate crash would add billions of bad debt to the world’s troubles. The Q2 edition of the Canadian Real Estate Sentiment Survey, a study of senior Canadian executives conducted by the Real Property Association of Canada (REALpac) and FPL Advisory Group, reports that its latest index is at its lowest level since 2009. According to the report, this reflects “ongoing concerns regarding the state of the Canadian economy.” REALpac also reports that “many Canadian market participants cite the future interest rate environment as an area of anxiety.” Yesterday, I spoke with Nancy Anderson, chief financial officer and vice-president, financial reporting at REALpac about the results. “I was a bit surprised hearing that we were back down at 2009 levels,” she told me. “But that’s probably because everyone figures it [the market] has got to slow down at some point.” Verbatim responses in the REALpac report offer a fascinating peek at what the country’s chief executives are talking about: “My main concern is that the Canadian economy may weaken next year and that could have a negative impact on the leasing market which could then lead to lower prices. If, on the other hand, the economy improves dramatically, interest rates will likely rise, tempering any effect of the improvement of economic conditions.” “The market has gotten used to very low interest rates. Although the industry talks about planning for rising interest rates, I don’t see any change in behaviour. When the U.S. Fed ceases their stimulus game, they will get out quickly (it’s costing them), and when rates start to move they will move fast. I don’t think the industry is ready.” “We’re living through uncharted territory. Nobody knows if we have a housing bubble or not, and what the impact of that could be. I think everybody had thought by now the economy would recover and rates would start to go up and it hasn’t happened. It’s spooky. You just wonder at what point this is going to create a problem.” “There’s a possibility that we’re going to see an asset bubble. There is inflation in both stocks and real estate, and it has everything to do with unprecedentedly low interest rates.” These are balanced by other, more positive comments. One noted, for example, that as pension funds continue to seek out yield, they’ll turn increasingly to real estate investment options. But the key theme is clear. Historically low interest rates have inflated real estate prices in both the residential and commercial sectors. And that won’t last forever. “Real estate can’t continue to get more and more expensive with no end in sight,” said Anderson. “So an easing off makes sense. Is it going to cause chaos in the market? I don’t think so.” Are you on track to meet your financial and retirement planning goals? Having a plan to protect your family and build your savings now can help ensure you will have enough money to last through retirement. Ask your advisor about Sun Life Financial Money for Life.™ Don’t have an advisor? Visit Sun Life Financial Advisor Match to help you find one in your area. Keep up to date on what’s happening in the capital markets and the real economy. Subscribe to receive Today’s economy blog automatically by RSS or email.

My condolences and prayers go out to the victims of the Oklahoma tornado and other weather events in recent days. We drove pretty close to one on Sunday night and witnessed an overturned semi thanks to the sheer force of what was almost assuredly a small tornado. Prayers and condolences don’t go very far, though, if they’re not followed with action. You can give to the American Red Cross either out of your pocket or with your time or with a blood donation. If you really want to help, there’s a simple step to take. How to Simplify Your Life to Make It Better Simplification is only useful if it brings about a net positive in your life. Often, simplification achieves that, but not always. (@ prairie eco thrifter) The Seduction of Spending The pattern of pleasure can be a tough one to escape from. Spending without care can put us into that pattern. (@ the canadian personal finance blog) Advertising Tricks: How Being Afraid Is Profitable Fear sells. It sells very well, in fact. (@ cents and sensibility) The Obstacle Is the Path The best path forward in your life usually involves removing whatever the biggest obstacle is in your life. (@ zen habits) The post The Simple Dollar Weekly Roundup: Tornado Edition appeared first on The Simple Dollar.

That whole concept of “buy now, pay later” never made much sense from a phrasing perspective. If you haven’t paid for it yet, you haven’t bought it. In the strictest sense that’s really just a seller giving you a loan. “Sign and drive”, now that makes more sense. These arrangements aren’t always the best deals for the end customer, but to each their own. Assuming “buy now, pay later” was something that made sense verbally, how would it sound if we flipped it? Pay now, buy later. In the convoluted phrasing that would mean you pay for something now, but get it later. That sounds pretty dumb. But we do it all the time. Anything that’s purchased online and shipped to you fits that bill. It’s the opposite of instant gratification. And it turns out, buying this way makes you like your stuff more. The act of waiting for your products to arrive makes you enjoy them more. This is partly due to anticipation. But another factor is that since the item is already paid for, when it arrives your brain kind of treats it like you got it for free. From an economic perspective, it shouldn’t matter when you buy the item or when you pay for it. But there’s a reason the field of behavioral economics exists. Read: Wait to Receive Something You Buy and You’ll Actually Like It More (Lifehacker) Related posts: The Settlement: Why Pay Millions If You’re Not Guilty? Don’t Buy In Bulk Why Would A Company Buy Back Stock? Related posts brought to you by Yet Another Related Posts Plugin.

When you walk in to virtually any bank these days, you should be able to find a sticker or sign that says, “FDIC“, along with the statement “Deposits are backed by the full faith and credit of the United States Government.” That may give you a warm and fuzzy feeling inside that your hard earned cash is safe, but what exactly does that stamp of approval mean? What’s the history behind the FDIC? And how much of your deposits are protected by them? Important stuff everyone who gives money to a bank should know but – alas, most of us probably don’t. Knowing the answers should give you a little more comfort in keeping your assets in a bank versus your mattress or a hole in the ground – and more importantly, how to keep all of them safe. What is the FDIC? The FDIC is an acronym for the Federal Deposit Insurance Corporation. It is an independent government agency, created in 1933, that insures bank deposits in the United States. Institutional bank members must carry that FDIC logo/statement within each branch. The FDIC insures approximately $9 trillion of deposits in U.S. banks and thrifts that are member organizations (but not investments – more an that later). Aside from insuring deposits, the FDIC directly examines and supervises more than 4,500 banks and savings institutions for operational safety. In order to maintain insurance coverage, banks must adhere to specific fiscal guidelines that the FDIC sets. Banks can be chartered by the states or by the federal government. Banks chartered by states also have the choice of whether to join the Federal Reserve System. The FDIC is the primary federal regulator of banks that are chartered by the states that do not join the Federal Reserve System. In addition, the FDIC is the back-up supervisor for the remaining insured banks and thrift institutions. What is the History Behind the FDIC? Back in the late 1920′s and early 1930′s, bank runs were extremely common. If rumor spread that a bank was in financial trouble and might become insolvent, large numbers of depositors would pull out their assets in a short amount of time (wanting to get their money out before the bank did go insolvent). This, would then increase the likelihood that the bank would fail and fall in to bankruptcy. And more withdrawals would ensue until it eventually happened. At the time, there was no insurance on deposits. As a result, there was little confidence in the banking system. And you can imagine how paranoid and resistant to depositing this would make everyone. If you heard that your bank might be in trouble, you’d stop whatever you were doing and run over to the bank to pull out your money before you no longer could. The 1940′s movie classic, It’s a Wonderful Life, depicts a bank run scenario. If a bank is irresponsible with its finances, should you, as a depositor, lose all of your assets if the bank becomes insolvent? The FDIC was created in 1933 to restore confidence in the banking system by protecting depositor assets. Are Any Banks Not FDIC Insured? If there are any banks that are not FDIC insured, good luck finding them. Even though FDIC insurance is not mandated, who wants to put their life savings in a bank that is not FDIC insured when just about all of them are? Huge red flag. It would be an extreme competitive disadvantage for a bank to go without. Being FDIC insured is essentially a necessary requirement of doing business. Still, it would be wise to check before you hand over your life savings. Here is a search tool to determine if a bank is FDIC insured. How is the FDIC funded? The FDIC receives no Congressional budget appropriations. It is independently funded by premiums charged to banks and thrift institutions pay for deposit insurance coverage and from earnings on investments in U.S. Treasury securities. Just like any type of insurance transaction, the tradeoff is premium payments in to a large pot in exchange for

First off, you are probably wondering what the heck the birth rate has to do with personal finance. Surprisingly, more than you would think. The main importance of the birth rate is related to Social Security and Medicare. If we travel back in time when Social Security was originally implemented, there were 5 workers for each retiree. This kept the system of paying monthly checks to retirees in line. Fast forward to today and because of the baby boomer generation retiring, we have turned the scale upside down. Now for every worker, we have 5 retirees. This is not good because only one worker has to fund five retiree’s benefits. It doesn’t take a math whiz to realize that this cannot be sustained. This is why you hear that the Social Security trust is going to run out of money. Photo Courtesy: efleming Decline in the U.S. Birth Rate Recently, it has been reported that the birth rate has fallen to the lowest level since it’s been tracked. This means that soon enough each worker is going to be funding even more retiree’s monthly Social Security checks. Tie this in with medical discoveries allowing for people to live longer means even more of a disparity between worker and retiree. In the past, you would work for 40 years and receive a monthly check for five years. Now you work for 40 years, but receive a monthly check for 20-plus years. This length of time will continue to increase as we move forward. How to Solve the Social Security Issue Lower Benefits. There are a few solutions to solve this problem. The first is to cut back the on the size of the monthly check retiree’s receive each month. Not many retirees are open to this option. And since the older population is more reliable when it comes to voting, no Congressman or woman is going to take the heat for suggesting cuts. For the most part, the government has slowed down the rate of increases in benefit amounts, even leaving it unchanged for a few years. The only other solution was to slowly increase the age in which one could begin receiving benefits. Increase Taxes. The next option is to tax workers more to raise enough money to pay for the monthly benefits. I haven’t seen a study that says how much a worker would need to be taxed to make the system solvent, but my guess is that it is a lot more than anyone is willing to pay. See the Social Security Wage Base for current limits on Social Security taxes. I don’t think that one thing should be done over another. I think there is a compromise that needs to be reached (but good luck on Washington DC agreeing to that!). I think that we need to increase the tax people pay along with decreasing the monthly benefit. We’ve already begun to see the shift where people are putting more into Social Security than they receive in benefits. Create Private Accounts. I feel the best option is a private retirement account option. I know many people are against this because they have been burned in the stock market, but you would do much better this way as opposed to Social Security. As I mentioned before, at the current rate, you are paying in more than you are going to get out. Think about that for a minute. If you pay in $100,000 over your working life, you may only receive $70,000 in monthly benefits. (Note, I don’t know the exact number, I am just trying to make this point clear.) You are losing money! If you could instead invest that money in US Government bonds that are very safe, you would almost guarantee a positive return. Put another way, if you invested $100,000 over your working life, you might end up with $125,000 in monthly benefits. Most people “see” their quarterly investment report and get scared when it drops and sell out of everything. They can’t “see” their Social Security gains or losses because it’s not on your Social Security statement. They just receive a check and are happy because of it. I’m sure if they saw that they were losing money, they would want to pull out of Social Security, but they can’t, even if

Becoming a parent for the first time is thrilling and terrifying on several fronts, not the least of which is budgeting. You know having a baby is going to cost you dearly in the wallet, but how much? Should you set aside $50 per month for diapers and other regular expenses? Should you anticipate dropping $10,000 on setting up the nursery for the new addition? The answer for most people will fall somewhere in the middle. Exactly how much you need to spend on having a baby depends on your needs, wants, and how much wiggle room you have in your budget. How to Budget for a Baby Budgeting for a baby can seem overwhelming, but it doesn’t have to be. The key is to differentiate what is a need versus what is a want. Determine Baby Needs As much money as you could spend on all the cute, cuddly items at every baby store in the world a majority of those things are not necessities. Just like you need a core set of things to live – food, water, shelter, and so on – your baby has a set of core needs as well. Addressing those needs is your primary concern first. If you have a limited budget you shouldn’t be splurging on all the cuteness available without taking care of needs first. Here are some common needs: Furniture: Crib and mattress – a place to sleep. Changing table – a place to change diapers. Food: Breast feeding supplies (breast pump, bottles, and so on) or formula supplies. Bibs. Diapering: Diapers (disposable or cloth). Wipes. Diaper rash cream. Clothing: Onesies. Shirts. Leggings/pants. Pajamas/sleepers. Socks. Hats (for blocking sun in summer or keeping head warm in winter). Transportation: Car seats that have been installed and checked by a professional (fire department, police officer, etc.). Stroller. Baby carrier. Safety: Outlet covers. Locks for doors with household chemicals and other risky products. Baby gate for homes with stairs or to block access to certain rooms. This covers a big chunk of what you need as a parent. From there you determine how expensive you want each item to be. Know that there are affordable options for every single item on this list. The clothing doesn’t have to be cute to be effective; plain white clothing gets spit up on just as easily as cute puppy dog clothing. Likewise you don’t need 600 of every single item. Sure, having an extra pack of onesies would be great to help reduce on constantly doing laundry, but the world won’t end if you don’t have it. Determine Baby Wants Once you have covered all of the absolute needs of your child, you can consider wants. There are two types of wants when shopping for your baby: Things that are not necessities on the list above, but you want to have them. Things that are necessities on the list above, but you want the better/cuter/more expensive version. For example, under furniture you could list a rocking chair or glider as a need. Technically it isn’t a need, but I’m sure nursing mothers everywhere would disagree. Even if it were on the need list the amount of money you can spend on this simple piece of furniture is astounding. You can go to one of the big box baby stores and spend $600, $700, or $800 on a glider. (I know because my wife and I are expecting and just went through looking for one!) I was stunned. You can get a really nice leather recliner for that much money not to mention a pretty basic piece of wood furniture with some padding. On the other hand you can go to a big box retailer like Wal-Mart and get a similar glider for $120. Is the Wal-Mart glider not as effective as the $750 baby retailer glider? Maybe, I don’t know. It is hard to quantify. If it is, is it $600 (or more) less effective? Doubtful. Therein lies the problem with baby shopping. You can get the basic item, but then you see everyone else running around with the better, cuter, and more expensive version. You can get a 5-pack of plain white onesies for $10 at the big box retailer. That’s $2 per one

I’ve posted Entry #144 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Buy-and-Holders Show Their Worries in Discussions of Failed Retirement Studies. Juicy Excerpt: Beth Strycharz wrote: “It’s quite obvious that conventional wisdom for the past 10 year is out the window. New game, new rules, new plans.” This has always been the problem with the Old School studies (and with Buy-and-Hold in general). The studies pretend to be science. But they assume that we will never again see a bear market. Once we do, all the “findings” in which retirees have placed their confidence are out the window. True research findings don’t change each time market psychology shifts.

Date Announced 22-May-13 Changes in Share Holdings Company Shrs Acquired/ Director/Substantial Shareholder Shrs held (Disposed) after Changed ALLIANCE FINANCIAL GROUP BERHAD AFG (909,000) Employees Provident Fund Board 190,793,140 81,000 ALLIANCE FINANCIAL GROUP BERHAD AFG (24,400) Mitsubishi UFJ Financial Group, Inc ("MUFG") 80,532,807 ALLIANCE FINANCIAL GROUP BERHAD AFG (3,400) Mitsubishi UFJ Financial Group, Inc ("MUFG") 80,529,407 ALLIANCE FINANCIAL GROUP BERHAD AFG (300,000) Employees Provident Fund Board 191,111,240 618,100 ALLIANCE FINANCIAL GROUP BERHAD AFG 2,900 Mitsubishi UFJ Financial Group, Inc ("MUFG") 80,532,307 AIRASIA BERHAD AIRASIA 4,000,000 Employees Provident Fund Board 231,549,000 MALAYSIA AIRPORTS HOLDINGS BERHAD AIRPORT (7,700) Employees Provident Fund Board 135,171,520 AL-`AQAR HEALTHCARE REIT ALAQAR 1,311,400 Lembaga Tabung Haji 57,761,356 AMMB HOLDINGS BERHAD AMBANK (81,100) Employees Provident Fund Board 331,972,457 2,928,900 BENALEC HOLDINGS BERHAD BENALEC (2,782,000) Kumpulan Wang Persaraan (Diperbadankan) 53,064,600 BIMB HOLDINGS BERHAD BIMB 659,000 Employees Provident Fund Board 97,370,700 BINTULU PORT HOLDINGS BERHAD BIPORT (293,900) KUMPULAN WANG PERSARAAN (DIPERBADANKAN) 38,792,300 BOILERMECH HOLDINGS BERHAD (ACE Market) BOILERM (668,800) Leong Yew Cheong 38,877,412 BURSA MALAYSIA BERHAD BURSA (5,800) Mitsubishi UFJ Financial Group, Inc. ("MUFG") 27,869,258 42,400 CIMB GROUP HOLDINGS BERHAD CIMB (1,354,400) Employees Provident Fund Board 877,827,032 1,186,000 CIMB GROUP HOLDINGS BERHAD CIMB (433,900) Mitsubishi UFJ Financial Group Inc (MUFG) 794,785,177 CAPITAMALLS MALAYSIA TRUST CMMT (750,000) Employees Provident Fund Board 165,943,600 DIALOG GROUP BERHAD DIALOG 2,500,000 Employees Provident Fund Board 372,190,035 DIGI.COM BERHAD DIGI (1,014,600) Employees Provident Fund Board 1,201,738,740 DOLOMITE CORPORATION BERHAD DOLMITE 278,970 HUANG JEN SOONG 9,074,073 DRB-HICOM BERHAD DRBHCOM 500,000 EMPLOYEES PROVIDENT FUND BOARD 146,287,600 EASTERN & ORIENTAL BERHAD E&O 311,600 CIMB COMMERCE TRUSTEE BERHAD 59,504,000 EASTERN & ORIENTAL BERHAD E&O 8,351,900 CIMB COMMERCE TRUSTEE BERHAD 67,855,900 FELDA GLOBAL VENTURES HOLDINGS BERHAD FGV 342,000 EMPLOYEES PROVIDENT FUND BOARD 299,986,370 FELDA GLOBAL VENTURES HOLDINGS BERHAD FGV (105,000) KUMPULAN WANG PERSARAAN (DIPERBADANKAN) 253,079,800 GENTING PLANTATIONS BERHAD GENP (5,000) KUMPULAN WANG PERSARAAN (DIPERBADANKAN) 46,545,700 GENTING PLANTATIONS BERHAD GENP (200,000) EMPLOYEES PROVIDENT FUND BOARD 116,458,200 HAP SENG CONSOLIDATED BERHAD HAPSENG (8,935,100) Gek Poh (Holdings) Sdn Bhd 1,272,992,880 HAP SENG CONSOLIDATED BERHAD HAPSENG (8,935,100) Hap Seng Insurance Services Sdn Bhd ["HSIS"] 108,481,780 HONG LEONG BANK BERHAD HLBANK 80,000 Employees Provident Fund Board 260,375,772 HOCK SENG LEE BERHAD HSL 263,400 Employees Provident Fund Board 56,128,560 HAP SENG PLANTATIONS HOLDINGS BERHAD HSPLANT (2,916,000) Gek Poh (Holdings) Sdn Bhd 424,240,000 HAP SENG PLANTATIONS HOLDINGS BERHAD HSPLANT (2,916,000) Hap Seng Consolidated Berhad 424,240,000 ICAPITAL.BIZ BERHAD ICAP 129,200 City of London Investment Management Company Ltd 12,781,900 IGB CORPORATION BERHAD IGB (175,100) Employees Provident Fund Board (EPF) 92,544,122 193,400 IHH HEALTHCARE BERHAD IHH 1,043,900 Employees Provident Fund Board 530,355,000 IJM CORPORATION BERHAD IJM (123,300) Kumpulan Wang Persaraan (Diperbadankan) 102,766,280 200,000 IJM CORPORATION BERHAD