7 Smart Investing Tips from Kiplinger Readers

Posted on July 23, 2014 by Melissa Hart

7 Smart Investing Tips from Kiplinger Readers

Each of the seven tips described below can help both experienced and beginning investors improve their investment skills.

  1. Invest in what you understand. To avoid getting caught in a stock-market bubble and to remain calm during an economic downturn, you should know something about a company’s true worth.
  2. Less debt means less risk. Look closely at a company’s balance sheet to determine if a company has too much debt that could hamper the company’s growth or ability to weather an economic storm.
  3. Use dividends to diversify your stock holdings. Instead of reinvesting dividends in the same stock, take cash dividends and use the money to buy stocks in different companies in which you have few holdings.
  4. If you use funds, look under the hood. To diversify your investments, make sure your existing funds don’t own the same stocks in the same companies.
  5. The right stock can replace a bond. Look for high-yield, dividend stocks to replace all or a portion of your bond holdings.
  6. Cash isn’t trash. Cash can be used to take advantage of stock-market downturns or corrections.
  7. Patience is a virtue. Sometimes it just takes time for a stock to increase in value.

For more information go to http://kiplinger.com/printstory.php?pid=12565

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Encourage students to evaluate all potential stock or mutual fund investments.
  • Stress the importance of patience and the value of a long-term investment program.

Discussion Questions

  1. How can these seven tips improve your investment decisions?
Categories: Chapter_12, Chapter_13, Investments, Mutual Funds | Tags: , | Leave a comment

Consumer Action Handbook

Posted on July 19, 2014 by Melissa Hart

How can a person contact an auto manufacturer with a concern about a motor vehicle? Where would a person file a complaint about deceptive investments? What state consumer protection agencies are available to help consumers in Missouri?

These, and many other, questions are answered in the Consumer Action Handbook, published by the U.S. General Services Administration. Updated each year, this free reference book offers consumer buying tips on everything from consumer credit and environmental-friendly products to travel and utilities along with extensive lists of contact information for major companies, trade associations, and federal, state, and local consumer agencies.

The Consumer Action Handbook may be accessed at::

online version – http://www.usa.gov/topics/consumer/consumer-action-handbook-online.shtml

download version – http://www.usa.gov/topics/consumer/consumer-action-handbook.pdf

order form for print copy – http://www.usa.gov/consumer-action-handbook/order-form.shtml

video – https://www.youtube.com/watch?v=eHhm5arq1RY

Teaching Suggestions

  • Have students obtain a copy of the Consumer Action Handbook (print or PDF version) and have them select information about which they were not previously aware.
  • Have students talk to others to determine their main sources of consumer information when making a purchase or when having a consumer complaint.

Discussion Questions 

  1. Why do an extensive number of consumer problems occur in our society?
  2. Explain the actions a person might take when encountering a consumer complaint.
  3. In addition to the Consumer Action Handbook, what information sources might consumers use when planning a purchase or encountering a consumer problem?
Categories: Chapter 6, Consumer Complaints | Tags: , | Leave a comment

Text Message Spam

Posted on July 16, 2014 by Melissa Hart

Spam text messages are not only annoying but also illegal. Many con artists use text messages to obtain your personal information by offering a free gift card or vacation. As a result, you become very vulnerable to identity theft.

To avoid becoming a victim of text message spam, register your number on the Do Not Call List.  Also, never click on links in spam messages, which often carry malware or send you to fake websites.

Never reply to these text messages or give out your personal information.  Report the text spam to your cell phone carrier by forwarding the message to 7726 (SPAM).

You can report unwanted commercial text messages and other complaints related to consumer fraud to the Federal Trade Commission at https://www.ftccomplaintassistant.gov/#crnt&panel1-1

For additional information on text message spam, go to:

http://blog.usa.gov/post/89152807112/protect-yourself-from-text-message-spam

http://www.consumer.ftc.gov/articles/0350-text-message-spam

Teaching Suggestions

  • Have students conduct research to obtain information on various types of scam and frauds.
  • Have students create an in-class presentation or a video communicating actions to take to avoid becoming a victim of consumer fraud.

Discussion Questions 

  1. Why do some people easily become victims of text message spam and other consumer frauds?
  2. Describe various types of frauds and scams.
  3. What actions can be taken to avoid becoming a victim of consumer fraud?

 

Categories: Chapter 4, Chapter 5, Chapter 6, Identity Theft | Tags: , , | Leave a comment

Learning about High-Cost Financial Services

Posted on July 12, 2014 by Melissa Hart

Brian Page, a teacher in Reading Ohio, wants his students to understand the drawbacks of check-cashing services, pawnshops, rent-to-own stores, payday loans, and other shadow banking services.  As a result, he scheduled a field trip for his students to visit these sources of high-cost financial services in their community, which are used by many unbanked consumers.

At LoanMax, they observed people getting loans with their auto titles serving as collateral.  One missed payment could lead to repossession of the vehicle. Next, at CheckSmart, students learned about payday lending and tax refund anticipation loans.

At CashAmerica people were making loan payments on money borrowed, which used jewelry, electronics, and sports memorabilia as collateral. Finally, the visit to the Rent-A-Center store demonstrated the exorbitant costs of furniture, appliances, and electronics when using a rent-to-own payment program.

For additional information on teaching about high-cost financial services, go to:

http://www.nytimes.com/2014/05/24/your-money/a-high-school-field-trip-to-a-pawn-shop.html?src=me

Teaching Suggestions

  • Have students talk with someone who has used one of these high-cost financial services. Obtain information about their experiences.
  • If appropriate, have students visit a high-cost financial service provider to obtain information about their services and fees.
  • Have students create a video presentation with suggestions on how to avoid using costly sources of financial services.

Discussion Questions 

  1. Why are an increasing number of people using high-cost financial services such as pawnshop loans, payday loans, and rent-to-own programs?
  2. What alternatives might used by consumers instead of these high-cost financial services?
  3. What actions might a person take to avoid these high-cost financial services?
Categories: Chapter 4, Chapter 5, Credit Mistakes, Financial Services | Tags: , , , | Leave a comment

The Sharing Economy

Posted on July 9, 2014 by Melissa Hart

Saving money or earning extra income can be as easy as using an app to rent a car or lend someone your backyard tools. With about 5,000 sharing companies, organizations and programs in operation, consumers could save hundreds and even thousands of dollars a year.

The main focus of the sharing economy is car and bicycle rentals, home sharing, and shared nanny services.  But consumers can also borrow drills, saws, ladders, lawn mowers through a community tool shed.

To avoid obvious dangers, be sure to use a sharing service that screens potential customers with background checks and identity verification. Technology can increase trust with online profiles and reviews from users.

There is also money to be made in the sharing economy by providing rides to others or renting out an extra bedroom. Before getting involved in the sharing economy, be sure to have proper insurance coverage and an understanding of tax implications. Participants in the sharing economy also note the social benefits of connecting with others from around the world.

For additional information on the sharing economy, go to:

http://www.kiplinger.com/article/business/T049-C000-S002-cash-in-on-the-sharing-economy.html

http://www.kiplinger.com/article/spending/T050-C000-S002-sites-to-help-you-save-make-money-by-sharing.html

Teaching Suggestions

  • Have students research various apps that facilitate transactions in the sharing economy.
  • Have students create interview questions that they might ask someone who is a buyer or seller in the shared economy.

Discussion Questions 

  1. What benefits are present for individuals and society as a result of the sharing economy?
  2. Explain how technology helps to increase the participation and acceptance of sharing economy activities.
  3. What concerns should be addressed when participating in the shared economy?
Categories: Chapter 1, Chapter 6, Economy, Financial Planning | Tags: , , , | Leave a comment

Managing someone else’s money

Posted on July 5, 2014 by Melissa Hart

Millions of people serve as fiduciaries, someone who manages money or property for another person who is unable to do so. This responsibility provides caring assistance while also protecting the person from potential scams and fraud.  Many older Americans experience declining capacity to handle finances, which can make them vulnerable.  The main responsibilities of a fiduciary are to: (1) act in the person’s best interest, (2) manage money and property carefully, (3) keep money and property separate from own, and (4) maintain good records.

The Consumer Financial Protection Bureau (CFPB) recently published four guides to help financial caregivers, particularly those who handle the finances of older Americans.  These guides are designed for those who serve as agents with power of attorney, a court-appointed guardian, a trustee or as a government fiduciary, such as a Social Security payee.

The guides will assist financial caregivers as they: (1) plan and implement their duties, (2) attempt to avoid scams and financial exploitation, and what to do if the person is a victim, and (3) require additional information; the guides tell where to go for help.

For additional information on a managing someone else’s money, go to:

http://www.consumerfinance.gov/managing-someone-elses-money

Click to access 201306_cfpb_msoa-participant-guide.pdf

Teaching Suggestions

  • Have students talk to someone who manages money on behalf of someone else.  Obtain information about the activities and concerns they have encountered.
  • Prepare a list of actions that might be taken to avoid scams targeted at older consumers and other vulnerable audiences.

Discussion Questions   

  1. What are situations that might require a person to manage the money of another person?
  2. What are examples of frauds and scams aimed at older consumers?
  3. How might a person avoid frauds and scams?
Categories: Chapter 2, Chapter 6, Chapter_14, Financial Planning, Frauds and Scams, Trusts | Tags: , , , , | Leave a comment

Beware of Credit Card Surcharges

Posted on July 2, 2014 by Melissa Hart

Did you know that retailers are permitted to charge or surcharge up to 3 percent on your credit card purchases?   However, if a retailer imposes a surcharge, it must be clearly disclosed in the store and on your receipt.

These checkout fees may also give you a discount if you pay with cash. Retailers in CA, CO, CT, FL, KS, MA, ME, NY, OK, and TX are not permitted to charge credit card surcharges.

Retailers are also allowed to set a $10 minimum purchase amount for credit card purchases. However, they can’t charge fees or set minimum purchase amounts on debit card purchases.

For more information on credit card surcharges, go to http://www.knowyourcard.org.

Teaching Suggestions

  • Ask students if they have personally experienced credit card surcharges on their purchases.
  • Have students make a short presentation with a summary of what actions might be taken to avoid credit card surcharges.

 

Discussion Questions

1. Should retailers charge extra 3 percent surcharge when they display a sign “Your VISA and MasterCard are accepted here”?

2. What can you do to avoid credit card surcharges?

Categories: Chapter 5, Credit Cards | Tags: , | Leave a comment

Estate Planning: The Funeral Rule

Posted on June 28, 2014 by Melissa Hart

You have already prepared a will; a living will and advance directives; and perhaps an ethical will. Now is your opportunity to prepare a letter of last instruction which can provide your heirs with important information on your funeral arrangements.

The federal law makes it easier for you to choose and pay for only the products and services you want or need when planning a funeral. The Funeral Rule, enforced by the Federal Trade Commission, requires funeral directors to give you itemized prices in person, and if you ask, over the phone.

Planning ahead is the best way to make informed decisions about funeral arrangements. An advance plan also spares your family from making quick choices during the time of grief. Comparison shopping, either in person or by phone, can save you money or is much easier when done in advance.

For more information and a complete copy of the Funeral Rule go to

http://www.ftc.gov/bcp/edu/microsites/funerals, and http://www.funerals.org

 

Teaching Suggestions

You may want to use the information in this blog post and the original sources to discuss

  • The cost of a traditional burial, including a casket and vault.
  • Do funeral providers take advantage of clients by insisting on unnecessary services and overcharging consumers?

Discussion Questions

1. Why should one consider making funeral arrangements in advance?

2. Are you obligated to buy a package plan which includes products and services that are most commonly sold by funeral directors?

Categories: Chapter_14, Estate Planning | Tags: , , | Leave a comment

Buyer Beware: Grey Charges

Posted on June 25, 2014 by Melissa Hart

You just opened your credit card statement. “What’s this charge?” may be your first thought when you see a small charge on your credit card statement that you can’t figure out. This is known as a “grey charge” and there are several types of grey charges you should be familiar with:

  • Unintended subscriptions. You thought you made a onetime purchase, but it was really a subscription.
  • Zombie fees. Membership fees that you had cancelled, but charges still appear on your statement.
  • Free trial to a paid subscription. When a free trial is over, the seller converts it to a paid subscription.
  • Negative option. You bought one product, but did not realize that you were buying others at the same time.

What can you do to protect yourself from grey charges?

  • Before you buy, read the terms of service. Disclosures about fees may be hidden, so read the entire document.
  • Mark your calendar as a reminder to cancel free trials by a set date.
  • Read your credit card statements carefully. Pay attention to the names of companies and charges for small amounts.
  • Contact the seller to have the grey charges removed.
  • Dispute the charges with your credit card company.

For additional information on grey charges go to: http://www.consumer.ftc.gov

Teaching Suggestions

  • Have students check their credit card statements to discover any grey charges.
  • Have students make a short presentation with a summary of actions that might be taken to avoid grey charges.

Discussion Questions

1. What are several reasons to check your credit card statements?

2. What can you do if grey charges appear on your credit card statement?

Categories: Chapter 5, Credit Cards | Tags: , , | Leave a comment

What Eight Numbers Do Identity Thieves Want to Steal from You?

Posted on June 21, 2014 by Melissa Hart

This article explains why identity thieves want eight different numbers and also provides some helpful tips for avoiding identity theft. The eight numbers include:

1. Phone numbers
2. Specific dates (birth, college attendance, employment, etc.) and Zip Codes
3. PIN Codes
4. Social Security Numbers
5. Bank Account Numbers
6. IP Address
7. Driver’s License and Passport Numbers
8. Health Insurance Account Numbers

For more information go to

http://finance.yahoo.com/news/8-numbers-identity-thieves-want-103033107.html

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Stress that identity theft is on the rise. According to the article, data breaches are now the third certainty in life and sooner or later, you will become a victim.
  • Ask students who have had their identity stolen what steps were necessary to solve the problems associated with identity theft.

Discussion Questions

1. What have you done to protect the eight numbers that thieves want and need to steal your identity?

2. Today many companies offer services designed to help protect your identity. These companies charge from $100 to $200 a year or more. Would you consider using one of these services?

Categories: Chapter 5, Credit Cards, Debit Cards, Identity Theft | Tags: , , | Leave a comment

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