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Advice from Adrienne: Should You Shred Every Single Paper?

Adrienne — Fri, 10 Sep 2010 06:07:52 +0000

It is easy to become careless about old pieces of paper that you may crumble up and throw into your car such as an old ATM deposit slip, but it may be more important than you think to properly dispose of items with your personal information on them. Anything that carries your social security number, birth date, signature, any account numbers, passwords, or PINs should be shred. It is also important to shred all deposit slips and ATM and credit card receipts immediately after you get your monthly statements.
Another list of things to shred that you may not think of are old airline tickets, unneeded medical bills, preapproved credit card applications, and any expired IDs. Make sure to keep a file for bank statements and canceled checks for one year and keep checks needed for your tax return for seven years. Papers and checks related to your home purchases or sale as well as contributions made to your IRA should be kept indefinitely.
Shred your paycheck stubs after the income is noted on your W-2 and shred monthly retirement and investment account statements after you get your annual statement for the entire year and keep that indefinitely.
It probably self explanatory that you should never shred original birth certificates, your Social Security card, mortgage paperwork, deeds or wills but some experts recommend to shred extra copies these that you have lying around.

Advice from Adrienne: Hotel Rebates for those Pesky Checked Baggage Fees

Adrienne — Wed, 08 Sep 2010 12:42:03 +0000

Most people are now well aware that when they buy an airline ticket that is not the only fee they will be paying. Every airline in the United States except Southwest now charges a fee to check your bags to your final destination. Two hotel companies have now decided to offer promotions to travelers to help out with the checked baggage fees.
The InterContinental Hotels Group is offering a rebate for up to $850 in checked bag fees to guests who book a two-night weekend stay by December 25 for travel through December 30 and pay for it with a Visa card. It should be noted that this process isn’t simple: you have download and submit a form, along with a receipt for checked bags and a hotel bill. If you are willing to go through this process, the reward can be beneficial.
Kimpton Hotels is also offering an up-front credit of up to $25 toward your second bag if you show proof of the charge upon check-in. A downside to this is that guests who pay through third parties are not eligible.
It sounds to me that while the hotel promotions may help some travelers out, your best bet may be to try and fly Southwest Airlines if you are going to be checking multiple bags and reap the benefits of their no-fee checked baggage policy.

Advice from Adrienne: Veracor Weekly Business Update

Adrienne — Fri, 03 Sep 2010 16:57:30 +0000

Fed Chairman Ben Bernanke is acutely aware of the significant impact his words have on the movement of the US stock and bond markets. As the nation’s head banker for the last 4 ½ years (with a severe global recession occurring during the most recent 2 ½ years), Bernanke has learned to carefully select the tone of every sound bite he utters. In a speech delivered last Friday (8/27/10) in Jackson Hole (WY), Bernanke deftly navigated through a dialogue that was one part “reassurance” and another part “confidence.” The “reassurance” was Bernanke’s claim that the Fed still has numerous options at its disposal that can stimulate the US economy if and when necessary. The “confidence” was his assertion that the Fed will “do all it can to ensure a continuation of the (nation’s) economic recovery” (source: Federal Reserve).

At the end of 2009, 10% of home mortgages nationwide had at least 1-payment past due and another 5% of mortgages were in the foreclosure process. At the end of June 2010, 9% of mortgages were late and another 5% of mortgages were in foreclosure, indicating that the housing market may not have bounced back yet but may have bottomed out during this year (source: Mortgage Bankers Association).

Before the financial markets close on Friday (9/03/10) for the 3-day Labor Day weekend, the monthly jobs report for August 2010 will be released. Last month’s (i.e., July 2010) +71,000 jobs gains in the private sector were more than offset by 202,000 job losses by government workers (source: Department of Labor).

Notable Numbers for the Week:

1. A LONG RUN – The S&P 500 lost 0.3% (total return) in the 1930s (an aggregate return for the 10 years, not per year). The next 6 decades (1940s through the 1990s) each produced positive returns. 3 of the 6 decades had gains of at least +400%. The decade of the 2000s was down 9.1%. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the US stock market (source: BTN Research).

2. A SECOND CHANCE – A total of 781,160 individuals filed for bankruptcy protection during the first 6 months of 2010, an average of 4,316 per day and +99,943 greater than the 681,217 filings from the first half of 2009. 73% of the 781,160 filed for Chapter 7 protection as opposed to Chapter 11 or 13 (source: Amer. Bankruptcy Institute).

3. JUST SEVEN YEARS – Even though many homebuyers take out a 30-year fixed rate mortgage when buying a home, few people keep the mortgage for the entire 30 years. The average lifespan of a 30-year fixed rate mortgage is only 7 years (source: Financial Times).

4. MORE THAN ONE-THIRD – 37% of the 6.8 billion people in the world live either in China or India (source: World Health Organization).

Veracor Principals
Chris Broyles Frank Cochran Ryan Coker John Ellard
Barry Hyman Martin Isenberg

Advice from Adrienne: Veracor Weekly Business Update

Adrienne — Wed, 18 Aug 2010 13:21:02 +0000

The Federal Reserve announced last week that they will begin to roll over maturing mortgage-backed securities from its balance sheet into the purchase of Treasury bonds. The first of these proceeds that will find their way into government bonds will occur tomorrow (8/17/10) and will total $18 billion this week and as much as $300 billion over the next 12 months. Such efforts by the nation’s central bank should keep interest rates down, news that is always welcomed by consumers and corporations. If the Fed succeeds in getting banks to lend more money and consumers to spend more of those borrowed dollars, we may finally put our nation’s recession (which began in December 2007) in our economic rear-view mirror (source: Federal Reserve).

The US stock market reacted to the Fed’s news from last week much like a hospital patient hearing a doctor’s plan for the aggressive treatment of a serious ailment: relieved to know that the medical professional may have identified a solution that will eliminate the patient’s pain, but sobered by the enormity of the effort that is required. As last week progressed, the S&P 500 stock index gave back all the gains it had achieved earlier this month, finishing its trading on Friday (8/13/10) down 2.0% YTD on a total return basis (source: BTN Research).

The Treasury Department will hold a conference tomorrow (8/17/10) on the future of mortgage giants Fannie Mae and Freddie Mac. Since being taken over by the US government on 9/07/08, taxpayers have paid $148 billion to prop up the 2 GSEs (government sponsored enterprises, i.e., corporations created by Congress). In February 2010, the Congressional Budget Office (CBO) projected that the bailout of Fannie and Freddie will ultimately cost taxpayers $380 billion through the year 2020 (source: CBO).

Notable Numbers for the Week:

1. GLOBAL BUSINESS – 47% of the sales of the S&P 500 companies in calendar year 2009 were made outside the United States. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the US stock market (source: S&P).

2. SPEND, SPEND, SPEND – The 6 largest monthly deficits ever in the history of the United States have occurred since February 2009, including the all-time monthly record deficit of $221 billion from February 2010 (source: Treasury Department).

3. WORKING FOR THE GOVERNMENT – 1 out of every 6 American workers is employed by the government, either at the federal, state or local level (source: Department of Labor).

4. THEY EARN, THEY PAY, THEY SPEND – To rank in the top 5% of earners in the USA required an adjusted gross income level of $160,000 or higher (data from 2007 tax returns). This group paid 61% of all federal income tax and is estimated to account for 37% of all spending by consumers (source: IRS, Moody’s).

Veracor Principals
Chris Broyles Frank Cochran Ryan Coker John Ellard
Barry Hyman Martin Isenberg

Advice from Adrienne: Veracor Weekly Business Update

Adrienne — Wed, 11 Aug 2010 12:46:13 +0000

It was not the employment numbers that market watchers or politicians were hoping for last Friday (8/06/10). The 131,000 job losses nationwide in July followed a revised 221,000 worker reduction in June (the latter total was originally estimated at 125,000). The 131,000 drop was a combination of 71,000 job gains in the private sector, offset by a 202,000 cutback in government employees. More than 70% of the lost government jobs were temporary census workers. What it all means is that the Federal Reserve has one more complicating factor that may keep them on edge as they meet tomorrow (8/10/10) for their 5th scheduled meeting of 2010. Investors and Fed Chairman Ben Bernanke are both asking “what more can the Fed do to help?” Short-term interest rates have been maintained at near zero since mid-December 2008, leaving the Fed little wiggle room on that front (source: BTN Research).

The US government is offering $74 billion of treasury securities in auctions to bond investors over 3 trading days this week. $33 billion of the total will be used to rollover existing treasury securities and the remaining $41 billion will be new funds raised. Last week’s 4.49% average interest rate for a 30-year fixed rate mortgage was the index’s 6th record low in the last 7 weeks (source: Treasury Department, Freddie Mac).

The White House has stated its case in the battle over the 2001 and 2003 Bush tax cuts for Americans earning more than $250,000 a year (note that to rank in the top 2% of taxpayers required an adjusted gross income of $261,000 or more in 2007). The Senate is expected to take up the debate next month but a vote to extend (the Republican choice) or to end (President Obama’s choice) the tax cuts to high-income earners may be put off until after the November 2010 elections (source: Senate, House).

Notable Numbers for the Week:

1. FIVE PERCENT CHANGE – The S&P 500 gained +7.0% (total return) during the month of July 2010, the 3rd consecutive month where the stock index has gained or lost at least 5%. During the 4 calendar years of 2004-07, the S&P 500 did not have a single month in which a gain or loss of at least 5% occurred. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the US stock market (source: BTN Research).

2. PLANNING AHEAD – The national personal savings rate in the USA was 6.4% in June 2010, its highest level since June 2009. The rate was just 1.8% in June 2007 (source: Bureau of Economic Analysis).

3. LESS THAN FIVE PERCENT – The population of the USA is 310 million. Only 1 out of every 22 people in the world is an American (source: Census Bureau).

4. GET OUT – A total of 527,906 homes were seized by lenders from delinquent homeowners in the first 6 months of 2010, an average of 2,917 per day (source: RealtyTrac).

Veracor Principals
Chris Broyles Frank Cochran Ryan Coker John Ellard
Barry Hyman Martin Isenberg

Advice from Adrienne: Weekly Update from Veracor

Adrienne — Fri, 06 Aug 2010 13:37:47 +0000

The S&P 500 bounced back in July 2010 with its best month of the calendar year by gaining +7.0% (total return). The strong result snaps a 2-month slump for the stock index (both May and June were losing months) and leaves the S&P 500 down just 0.1% YTD as of last Friday (7/30/10), 7 months and 30 weeks into the current year. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the US stock market (source: BTN Research).

Deflation has been on the mind of St. Louis Fed President James Bullard. Comments from Bullard in a published paper last week warned that the US is “closer to a Japanese-style outcome today than at any time in recent history” (i.e., deflation, defined as a wide-ranging fall in the prices of goods and services, as well as the incomes of Americans). Bullard, a voting member of the Federal Open Market Committee in 2010, is considered to be one of the more “hawkish” Fed members, i.e., a policymaker who is more likely to attack potential inflation early with rate increases (source: Federal Reserve).

Congress will be in session just 1 more week this summer before beginning, as the House describes on its website, a 5-week “Summer District Work Period.” In a survey taken early last month, only 11% of Americans expressed confidence in the legislative work currently being done by Congress, setting the stage for spirited dialogue between House and Senate members and their constituents in the coming weeks (source: Gallup).

Veracor Principals
Chris Broyles Frank Cochran Ryan Coker John Ellard
Barry Hyman Martin Isenberg

Advice from Adrienne: To Buy Your Lease or Give It Back?

Adrienne — Wed, 04 Aug 2010 13:40:04 +0000

At the end of the lease on the car, deciding to keep it may become a viable option. If any of the reasons below apply to their situation, you may want to consider buying out the car.
• The buy-out price in your contract makes buying out the car a great deal
• You know the car’s mechanical history and know it’s very reliable
• You don’t want the hassle of starting a new lease or shopping for a new car
• You’ve exceeded the number of miles allowed and don’t want to pay a penalty
• There is excess wear and tear on the car, and you want to avoid the extra fees
To start out, it is a good idea to check the residual value on your car in the lease contract. Once you know what you can buy your car for, you can now check a true market value of the car. If the True Market Value price is the same or higher than the residual value of your car it may be a good deal to buy out the lease. If the True Market Value price is less than the residual price you may still be able to negotiate a lower price for your leased car. It is important to remember that the car company really does not want that car back and would probably sweeten the deal to try to encourage you to buy the car.
A good place to find the True Market Value price is on Edmunds.com
To get started with buying out your lease you must first call the number listed on your monthly payment slip. Choose the “lease end options” and ask for your buyout amount. When you are talking to the representative do not tell them if you have gone over your allowed mileage or you have excess wear and tear. They may up your price because of this. Always allow several weeks to negotiate a buyout figure for your leased car.

Morse Money Matters: Protect Yourself from Potential Ebay Fraud

Leanne Morse — Tue, 03 Aug 2010 15:48:03 +0000

Recently my husband and I bought new iPhone 4 phones (we love them by the way!) and opted to sell our old iPhone 3G on Ebay since there appeared to be a good market for them. We have sold things on Ebay before so we were not overly concerned with the process. The listings were approximately two weeks apart and in both listings we offered free shipping. The sales went through and we packaged and shipped our old phones off to their new owners.

A week to ten days after the first phone was mailed we received an email from the buyer asking for delivery confirmation of the package. Fortunately we paid for insurance and delivery confirmation so we had the information to send to the buyer. The confirmation showed that the phone was delivered 4 days after we mailed it. We never heard anything more from the buyer so we just thought it might have been a miscommunication at the delivery location. However, a few weeks later the same exact thing happened with the second phone we sold to a different buyer. Thankfully we also had insurance and delivery confirmation on this phone as well.

The lesson in our experience is when you are selling an item of value, be sure to protect yourself and opt for insurance and delivery confirmation. Otherwise you can open yourself up to potentially losing your item because there is no proof that you sent the item or that the buyer did or did not receive it in good condition.

Advice from Adrienne: Bank Accounts for the New Generation

Adrienne — Fri, 23 Jul 2010 14:45:48 +0000

I have grown up knowing that the Great Depression left many Americans of that era afraid to trust banks with their money. However, I did not realize that many people of my generation in their 20’s still felt this way. Talking to a few friends that work with me in the service industry led me to find out I am one of the few with either a bank account or a bank account that is used on a regular basis. Some of them do not wish to have a bank account for multiple reasons including to avoid paying taxes, to avoid over-drafting when they do not have the money, or simply because they do not trust the banks with their money. I have heard many stories of people actually over-drafting on their account so much that they simply close out their bank account and walk away. My question is, will the new law requiring banks to get customers’ permission before charging them fees to cover debit card and ATM withdrawals sway the people I know into signing up for a bank account? One person I spoke with thought about it for a minute and decided that she now probably trusted banks less considering they are going to be losing so much money by not charging their customers overdraft fees. All of this simply to gain more business? She doesn’t buy it. Considering the banks made $20 billion in overdraft fees last year, I can definitely see her point. Another person I spoke to was actually in the process of opening up a bank account for the second time in his life because he had recently run across trouble trying to rent out a house due to lack of credit. He realized that he needed not only a bank account but a credit card as well. He was very happy about the new overdraft fee law because he said he had already racked up $2,000 in fees in his life and did not want to go down that road again when he opened up a new account. He did say that the new law did not sway his opinion in the end. Time will only tell if more people will jump in line and sign up for a bank account knowing they won’t be charged overdraft fees. All in all, I just think that people are very sensitive when it comes to their money and only trust themselves to hold onto it.

Advice from Adrienne: Overdraft Out the Window

Adrienne — Thu, 22 Jul 2010 13:05:40 +0000

In March of 2010, Bank of America attempted to gain the trust of their customers by getting rid of the pesky overdraft fees that can be charged by everyday purchases on debit cards or ATM transactions. Many banks, including my own, BB&T, have jumped on board with this idea in an effort to build a stronger relationship with their customers after the recent financial crises. As of July 1st, the Federal Reserve will require that bank’s obtain a customer’s consent before they can charge them overdraft fees for ATM transactions and debit purchases. Last year banks generated about $20 billion from overdraft fees on debit purchases and ATM transactions and $12 billion more by covering checks and recurring bills. Overdraft protection will still be available, typically for a fee of $10, to customers who link their checking accounts to savings accounts or credit cards. Many customers seem to be more content with having overdraft protection on mortgage checks and recurring bills but do not want the coverage for everyday purchases. I was made aware of these changes by a phone call I received from BB&T requesting that I respond to a letter they were sending me regarding my preferences on overdraft protection. Instead of replying by letter I simply logged onto my bank account online, checked a few boxes, and now I am finally free from those pesky $35 overdraft charges that could turn a cup of coffee into a $40 purchase. I have recently become aware of the numerous friends I have in the service industry without bank accounts who deal strictly in cash. I have asked many of them why and a lot of the time the answer lies in the overdraft fees and the trouble they have gotten into with their banks because of them. Tomorrow’s blog will explore if this new-found change in overdraft policy will affect their decision in opening a new hank account.