July Jobs Numbers

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Just a quick update today. After all, it’s Independence Day week and I’m a freelancer, so that’s double time off (without pay). The July jobs data has a slightly unusual split thanks the Fourth of July holiday. The new unemployment numbers were released on Wednesday, a day early because Thursday is a federal holiday, while the hiring numbers will come out on Friday. July Unemployment Numbers The numbers released today are for new unemployment claims. In other words, these job numbers are a measure of how many people recently lost their jobs, not how many people are unemployed, or how many are being hired. Theoretically, you could have a huge first time unemployment number and a huge drop in the overall unemployment rate if a bunch of people were hired and fired over the same time period. In real life, it seldom works that way. So, without reading too much into these employment statistics, the initial jobless claims number dropped by 5,000 to a seasonal adjusted 343,000, which is slightly less than economists were predicting, but by no means any sort of blockbuster drop. Certainly nothing here will make anyone worry about inflation. The uptake is simply that the economy …

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Little Things Can Cost Money

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Generally, this website focuses on the slightly more complex personal finance advice and other money issues. However, every once and awhile, I get enough motivation to fire off a tidbit of money saving advice on something smaller and easier. This evening, I finally got pushed over the line by one of those little things that companies do to wring a little extra money out of their customers. The Laundry Soap Scam Years ago, laundry soap came in big boxes and big bottles. The bigger the bottle of laundry soap, the more loads of wash it did. Then, laundry soap manufacturers figured out they could concentrate their liquid laundry soap. In doing so, they could ship more product to the stores for the same cost, and stores could keep more product in stock thanks to smaller bottles. Of course, at first, this took a fair amount of consumer education because people were very used to the concept that bigger meant more. Finally, laundry companies settled on printing on the bottle just how many loads of laundry each bottle could do, and that was that. Along the way, however, those same companies couldn’t pass up a chance to cheat their customers out …

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Car Rental Scam Fees Explained

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Recently, I had a very nice family vacation. Now, I travel on occasion for business, and often when we travel we setup via the same system. The rental companies don’t really bother with the tricks, because they have a blanket contract with the company. This time, however, the family and I went on our own. In doing so, I noticed more than a few of the most common travel company tricks have been updated, and some new ones are out there as well. So, without further ado, let’s look at the latest car rental company tricks to increase your bill. Rental Car Fee Scams The travel industry was once the domain of luxury travelers and big spenders. Travel companies just charged high, profitable rates for everything from hotel rooms to car rentals. But, along the way, travelers got savvy. Internet travel websites opened people’s eyes to the vast difference in pricing, and the race to the bottom was on. One way travel businesses, like rental car companies, compete is by offering a rock bottom, low price, for a car rental, with every intention of boosting those rates back up with fees when you actually rent the car. Avoiding a high …

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Legit Free Trial Offers

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There are a lot of ways that businesses squeak through the door of legally sufficient, while staying far outside the realm of generally fair. One of the areas that comes up repeatedly as a source of customer discontent is the free trial offer tricks companies pull on unsuspecting consumers. Free Trial Offer Scam The free trial offer scam generally relies on a disconnect between what the legally agreed upon terms in the fine print state, and the general understanding that a reasonable person has about what a free trial is. For most people, a free trial means that you get to try something out for free. Everyone knows that there is no such thing as a free lunch, however. Most people understand that the point of the free trial is to get you to sign up for the paid version going forward. What most people don’t notice, is that they actually already signed up for the paid version when they agreed to the free trial. In other words, you aren’t really getting a free trial. What you are really doing is signing up for a full subscription with the first month free, and a limited free cancellation period. That doesn’t …

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Your Money AND Your Life

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I write this personal finance blog because I like writing, I have real, professional experience in finance, and I like to help people. I also know that when I read a lot of the financial advice out there, it is either, too complicated, too oversimplified, or flat out inaccurate. This isn’t too surprising, because dealing with money and all of the various things that go with it, like savings, borrowing, investing and so on can get complicated very quickly. It is also very easy to lose sight of the forest, for the trees. I thought this might be a good time to remember that your balance sheet is not how you keep score in life. Living Your Life Making Smart Financial Decisions Recently, a reader left a comment on my review of Credit Karma basically calling me a fool for leasing a car. This seemed odd. Leasing does have a lot of moving parts, but the concept itself isn’t a scam. He went on to say that the only smart thing to do was buy a used car and live debt free. Then I knew, what was going on. Some people lock into “rules” about finance and take them as the …

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Why the Buying Company Stock Price Goes Down

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The deal where Yahoo is buying Tumblr got me thinking about a question that I get asked whenever there is a big merger or buyout between companies. Often, when one company buys another company, the buying company’s stock price goes down in reaction to the news. Why does the acquiring company stock price go down so often? Stock Price Reaction to Buying Another Company Investor reaction to deal of Yahoo buying Tumblr was understandably muted. First, Tumblr is not a publicly traded company, so there is no way for its stock price to react at all. Second, at a reported price of $1 billion the acquisition isn’t exactly a blockbuster deal in terms of size. However, when one publicly traded company buys another, there is often an immediate dip in the share price of the acquiring company. Before we get started on exploring why the buying corporation’s stock goes down, it is important to remember that stocks do not trade in a vacuum. There are millions of people buying and selling stocks, with millions of different objectives, millions of different time frames, and millions of different investment philosophies. At any one time, any of those competing motivations can affect the price of a company’s stock. However, …

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Yahoo Suffers from Activist Shareholders

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In 2008, Microsoft offered to buy Yahoo. This is what so-called, “activist shareholder,” Carl Ichan wanted all along, not to rescue the company or turn the company around, but to make a quick profit by selling it. Of course, those members of Yahoo’s board who had own shares much longer than Mr. Icahn, and those who truly cared about the company wanted no part of what they saw as a low bid from a bigger company just because Yahoo was down on its luck. When Mr. Ichan didn’t get his way, he sold his shares and moved on, no longer caring about the company. This is hardly what I would call an activist. Typically, an activist works for the greater good, and typically for the long-term greater good. Mr. Ichan, in this case at least, was nothing more than a big shareholder not an activist one. All he wanted was to be able to flip his relatively short-term investment in Yahoo into a profit. Calling him an activist is like calling someone trying to flip a house a neighborhood activist for wanting higher prices. It just doesn’t add up. Previously, one could only assume Mr. Ichan was right. Yahoo seemed to …

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Jobs Report Quick Update

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The most recent jobs report shows not only did the US economy create more jobs in April than expected, the number of jobs created in February and March were revised upward as well. This takes some of the steam out of the negative talk about the lower unemployment rate being only about workers who have stopped looking for jobs. The stock market is responding positively because job numbers are important to the overall economy. Numbers get revised in the following months as more data comes in. For example, the April jobs report was released just days after the end of April. That takes a bit of trust in your numbers. When you get to go back through them with a fine tooth comb, you can spot things that are different. You can read the CNN story about the jobs report for details.   More details to follow here on Finance Gourmet. Follow my blog with Bloglovin

What Is Going On with Apple Stock?

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There has been a lot of news about Apple stock lately. From the company’s swoon from an Apple stock price in the 700s down to the 400s in just months, to the company’s recent earnings report, to the new Apple plan to issue debt to pay shareholders dividends and buyback stocks. Is this good news for Apple? Is Apple stock a good investment now, or is this all a prelude to a big Apple stock price crash? What’s Wrong with Apple Stock? Years ago when I was a financial planner in Denver, I advised a lot of people who worked at Qwest. For those of you who don’t remember how the internet bubble worked, it went a little something like this. First, people decided that the internet was an amazing new technology. They weren’t wrong. Then, they decided that every company that had ANYTHING to do with the internet was therefore a great investment. This was very wrong. Qwest provided a certain kind of telecommunications link that was very important to the internet. It used its stock to buy a “real” company with real earnings, namely US West before the whole internet bubble blew up. During the good ride, it …

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Investing in GE Dead Money?

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The world of investing can seem black and white, even though nothing could be further from the truth. Particular investments made for one purpose by one investor are made for a completely different reason by another investor. Furthermore  what is a “good investment” for one investor is flat out dumb, for another. This is what makes the various Buy, Sell, Hold recommendations from stock analysts kind of difficult to take seriously. JP Morgan Cuts GE Rating The reality is that investors of all kinds who want to use investment analysis from financial firms need to carefully read the entire text, not the headlines that get carved out by various news organizations. The reasons for cutting or raising a rating on a stock may have nothing to do with your investment goals, making those one-word ratings meaningless to you. Today, Marketwatch, and others report that JP Morgan cut its rating on GE stock from overweight to neutral. Most intriguing is the line in which the company calls GE stock, “dead money.” Dead money, in case you are unfamiliar with the term, means that the money is not growing or earning anything, while it could be earning money elsewhere. In particular, dead money …

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