Are you investing or betting?

• Saving & Investing
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To my way of thinking, putting your money behind the Bitcoin represents a bet rather than an investment. Of course, the distinction can be confusing — outside of sports pages, the place you might most often see people referring to bets is in the financial news. Any large or prominent financial stake in something is likely to be referred to as a bet.

I believe there is an important difference between a reasoned assumption of risk (i.e., an investment) and an all-out win-or-lose gamble (i.e., a bet). With each passing year, I appreciate that distinction more and more because I’ve seen people put their money at undue risk when they mistake a bet for an investment.

There is no hard-and-fast definition that captures the distinction between the two, but below are some thoughts on how to tell the difference.

It’s a bet rather than an investment when:

  1. It’s an all-or-nothing type of proposition. Relatively few publicly-traded companies suddenly go completely out of business, so in most cases when you invest in the wrong stock, your downside might be 10, 20, or 30 percent. Bets, on the other hand, are all-or-nothing — you win or you lose. This doesn’t just apply to cases like betting on the Broncos in the Super Bowl. Certain financial transactions, such as uncovered options, can also mean your entire investment is riding on whether you are right or wrong.
  2. It depends entirely on a single event. If you make an investment in a good company that happens to miss one quarter’s earnings, you will have plenty of chances to make up for it in subsequent quarters. Like bets on a sporting event, though, some financial propositions are based on one outcome or have short-term expiration dates, and so they don’t give long-term fundamentals a chance to come into play.
  3. You live or die depending on popular opinion. Shorting a stock is a good example of this. It is a risky proposition, because you might be right that a company is overpriced, but as long as people keep paying more for it, you lose. Shorting a stock is also a risky proposition because your downside is theoretically unlimited.
  4. Your interests are not aligned with those of the people in control of the enterprise. Gamblers are often frustrated when they have bet on the Wildcats to win by ten, only to see the Wildcats sit on a nine-point lead to run out the clock. This is a reminder that the Wildcats’ coach is interested in winning the game, not beating the point spread. These days, you have to look carefully at executive compensation packages before you invest in a company. Executives might have specific incentives which are not lined up with your goals for the company as a shareholder.
  5. You cannot obtain fundamental business information. For all the media coverage that precedes the Super Bowl, much of the game plans the teams have in store is kept top secret. You can bet on the game, but you don’t have all the information you need to understand how it will be played. Similarly, investment schemes like hedge funds with intentionally opaque investment strategies put you in a position of making a blind bet rather than an informed investment.
  6. You do not perform fundamental analysis. Then again, often the right fundamental information is available but people do not bother to do the analysis. There is more to a business plan than having a hot product, and an investor should have a good feel for a company’s business plan. Also, even a great company can be overpriced, so you need to know how the current price relates to projected earnings.
  7. It is driven by emotions. Part of the reason people bet is for the emotional rush — plus, having a different kind of stake in the game can make a blowout like the recent Super Bowl more entertaining. Investing, on the other hand, should be cold-blooded, with decisions driven by the head rather than the heart.

Don’t get me wrong — this distinction between a bet and an investment doesn’t determine whether or not something is a good idea or not. There can be bad investments just as there can be good bets. However, the distinction does relate to whether or not the decision is speculative by nature; and based on that, you should determine whether your financial future should be at stake or just a little pocket money.

How to keep your pets safe this winter

• Family & Life
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This post comes from Halina Matt at our partner site Zing.

If you live in these United States, then you’re painfully aware that so far, this has been one of the coldest winters ever on record. Well, technically I’m not sure if it’s the coldest on record, but man, it sure feels that way, doesn’t it? Now, if you’re freezing when you step outside your house all bundled up in a warm coat, scarf, hat and gloves, can you imagine how your little furry friends must feel? That fur doesn’t provide as much protection from the elements as you may think. In fact, there’s an old saying: “If you’re cold, so is your pet.” It’s imperative that you keep their safety in mind as we feel the repeated effects of the aptly named polar vortex. Here are some tips to help you keep Fido and Mittens safe and warm.

Keep Them Indoors

The most obvious and logical precautionary step is to keep your animals indoors as much as possible. Just like their human companions, pets are subject to hypothermia if they’re left outside too long in the freezing cold. As the Humane Society points out, pets can suffer permanent damage due to this exposure. Remember how your face froze by the time you walked down your driveway to your car? Well, your dog is experiencing that same discomfort, and even outdoor cats should be kept indoors during the cold winter months.

Provide Shelter

If keeping your pets indoors all winter isn’t an option,  AccuWeather.com notes that it’s imperative to your pet’s safety that you build a waterproof safe haven to protect them from bitter winds and dropping temperatures. Don’t forget to make sure it’s stocked up with clean and dry bedding, and provide plenty of food and water because keeping warm requires lots of energy. Be sure to check on the food and water periodically, though, to make sure it hasn’t frozen.

Bundle Up

Who doesn’t love an excuse to buy cute little pet sweatshirts with matching booties? Well, according to the American Veterinary Medical Association (AVMA), those added accessories are not only fashionable, but they’re also functional. Short-haired dogs especially can benefit greatly from wearing a sweater or dog coat, so it’s a good idea to have a variety around the house to keep your dog warm when he ventures outside. Booties can also provide some added protection to cold-sensitive paws. Wipe down your pet when they venture back inside, removing any damp clothing that can make them cold, and avoid shaving your pets down to the skin until temperatures warm up.

Keep Them on a Leash

In cold and icy conditions, it’s very important to keep your dog on a leash. According to the ASPCA, in winter, dogs can easily lose their sense of smell and become lost. Keeping them leashed – better yet making sure they have their ID tags and microchips – will help ensure they stay safe by your side.

Other Safety Concerns

As with any time of the year, it’s extremely important to be aware of dangerous chemicals that can harm your pets. Antifreeze is of particular concern in the winter, along with salt and other ice-melting chemicals that are prevalent in cold weather.

Cats sometimes find shelter under the hoods of cars in the winter, so the ASPCA recommends banging loudly on the hood of your car before starting it to prevent any injuries.

Do you have any tips to share with pet owners? Let us know in the comments below!

More stories from Zing:

Online sales tax: What’s the deal?

Buying and Selling Homes in 2014: A More Balanced Market

Decorating Your Home: A Guide for Music Lovers

To love, cherish and argue about money

• Family & Life•Retirement
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In the 1960s-era suburban landscape where I spent my formative years, the atmosphere was much less structured than it is today. If we kids wanted to see our friends, it was routine for us to run to their homes, open the back screen doors and stroll right in.

But if their parents were fighting, as wasn’t uncommon, we beat a hasty exit out that same rear portal. With the potential of pots and pans and anything not nailed down being picked up and flung, you wanted to be elsewhere, and quick. To do otherwise was to risk stopping a flying coffee mug with your ear.

It was right around age eight or nine that I came to realize all wasn’t peaches and cream between married couples. The enclave sometimes reverberated with shouted oaths and bellowed accusations between two folks who had a few years earlier posed happily for photos, slicing into a multi-tiered cake.

Now they were throwing cake, and pastramis, and canned sardines.

What were most of those arguments, debates and battles royale about? In this fast-paced world, where change seems to come ever more rapidly, it’s comforting to know they were about the same thing couples argue about today: Money, of course.

One night, I was staying over at a friend’s house when his parents arrived home after a party where too many cocktails had been served. I’ll never forget us listening furtively to the row that played out downstairs between his mom and dad. The only line I recall decades later? “That was a $300 set!” one shouted.

A set of what? Didn’t matter, it was 300 smackers. My friend and I never learned what the set was. His parents were too busy applying ice bags to their craniums and avoiding sunlight the next morning to say.

My feisty Valentine

With Valentine’s Day soon upon us, it’s the right time to statistically verify this tendency for couples to duke it out over cash. A recent Fidelity Investments survey of couples with yearly total incomes of at least $75, 000 or investment assets of at least $100, 000 revealed almost four in ten couples fight about money occasionally or often, and about one in seven never resolves those debates.

There are big knock-down-drag-outs over retirement. For instance, almost a third of couples fail to see eye to eye on whether they will continue to work during traditional retirement years. Four in ten say they spar over what kind of lifestyle they can expect to experience in their post-work lives.

Just slightly more than one in three say they can’t decide where they will live in retirement, which as we know is usually influenced by financial assets.

One of the reasons married people often come to loggerheads with their spouses is the tendency not to be equal partners when it comes to personal finance decisions. Only 43 percent of couples in the Fidelity Investments survey reported being equal partners when it comes to retirement savings.

For instance, more than one in five (21 percent) of wives said they had only some or no input in daily money matters, and only 17 percent reported having a primary role in retirement planning. By contrast, 39 percent of men reported they had the primary role in preparations for the golden years.

The better news is that nearly one in four women now report being the primary financial decision makers in their marriages. By comparison, it was just 15 percent the last time Fidelity conducted the survey, in 2011.

More than money

Is there any hope for those instances when money issues turn lovebirds into angry birds? It is possible to resolve money disputes, says Kathleen Burns Kingsbury, author of the book “How to Give Financial Advice to Couples.” First, though, the factors underpinning marital money beefs must be grasped. Money squabbles, she says, are rarely just about money. They are really about the individuals’ personal feelings about security, power, respect and love.

Next, it’s essential to realize that in many marriages, couples come into the union with very different “money beliefs, ” Kingsbury says.

“A money belief is a thought or attitude toward money that influences your savings, spending, investing and gifting every day, ” she continues. “These beliefs tend to reside in our unconscious thought. Because we live in a society where money talk is taboo, we often don’t identify these attitudes.”

Money beliefs are generally formed between the ages of five and 15 while watching parents interact with greenbacks. So they are often oversimplified. After all, Kingsbury says, “They were formed in a child’s mind.”

Recognizing arguments over money are about more than cash is one step to more harmonious couplings and fewer money arguments. In addition, talking about each other’s money beliefs and acknowledging that neither one is wrong, but just different, can help people actually learn more about their partners and develop stronger, healthier and more open relationships, according to Kingsbury.

So next time you argue about retirement savings, whether to invest in index funds or ETFs, whether to go after zero-percent APR credit cards or a high-interest savings account and how much each spouse should be bringing home, try talking calmly and frankly about each spouse’s money beliefs.

It’s much safer than hurling a blender.

Financial to dos before you say “I do”

• Family & Life•Saving & Investing
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Money is a sensitive topic — even between loved ones. When my husband and I got married, money was the last thing on our mind. The only knowledge we had of each other’s finances was that neither of us had any debt, both of us had some savings. My husband didn’t even know my salary. Knowing each other’s financial makeup better would not have changed our decision to marry but it would have made our newlywed days a lot less stressful. Money was the contributing factor in a lot of our early arguments. And it took us a good two years before we decided to sit down calmly and talk about money. Given that money is cited as one of the top contributing factors in divorce, it is essential that couples have conversations before marriage to establish where each of them stands financially. Here are a few questions to ask before you say “I do.”

Are your goals compatible?

For the first few years of our marriage we saved absolutely nothing, so we made a budget. But we failed miserably. We not only didn’t save, but we felt miserable trying. We were not enjoying what we did spend our money on. Then we had a talk about where we wanted to be financially in the next five to ten years and set specific goals. Did we have any major expenses on the horizon? How much did we need in total for each of these expenses? How much did we have to save every month for these? Only after giving “a name” to every one of our dollars were we able to make progress in our savings. Every time we wanted to buy something, these goals made us pause and think about our priorities — common priorities that both of us set together.

Are your spending & saving styles compatible?

In our relationship, I am the spender and my husband is the saver. That doesn’t mean I spend recklessly; I just need more structure and goals to keep my savings on track. My husband, on the other hand, usually never spends anything with the exception of one of two expensive wants. Before we made a spending plan, this personality difference contributed to some of the arguments we had early on. After a year of not saving much, I felt, as someone who doesn’t spend on anything big, that it was not my fault; however, my husband felt that since he only splurges once or twice a year it wasn’t his fault either. Only after we set some financial goals for ourselves and made a spending plan could we save and spend on things we both loved.

What are you bringing into the marriage?

We didn’t bring any debt into our marriage. We didn’t bring any assets either, other than a very modest savings account. So this part of our finances was uncomplicated. But if one of you is bringing substantial assets or debt into the marriage, it is important to talk about how those will be handled. Will you be considering the debt as a combined debt that both of you will pay off or will that be kept as one person’s responsibility? If one person has a lot of assets, will pre-marital assets be kept separate? Will it be beneficial to have a prenuptial agreement?

What will be your money management arrangement?

Some people are comfortable having combined accounts, some prefer to keep it separate, and the rest fall somewhere in between. Any of these arrangements is perfectly fine if it works for both of you. You should not assume the other person will agree to whatever arrangement you prefer. It is best to talk about the pros and cons of each method and decide on the best arrangement.

What are your financial roles?

When we started taking control of our money, I wanted my husband to be involved in every single financial decision we made — budgeting, spending,  choosing the best savings account, where to invest, etc. My husband honestly couldn’t care less; he thought that since I liked finances so much, I would make the best decision for us. Without knowing his logic, I felt like he didn’t care about our finances and resented that. After going back and forth several times, now we know where we stand. We each have our strengths and handling finances is one of mine. So I handle everything in our household from budgeting to investing. We established a limit of “$x” above which every purchase has to be discussed, like how necessary the item is or if it is possible to get a better deal if we wait to purchase it.

How will your financial communications be?

After establishing our financial roles, it is absolutely essential to figure out how communication will be handled. Even if one person exclusively handles the entire household’s finances, the other person should know what is going on at all times. My favorite way to do this is to schedule financial dates. Once a month we go out to a coffee shop just to talk finances — how we did that month, our net worth, any upcoming financial decisions, anything that needs changing, etc. Initially, we were arguing a lot, but these days I look forward to our financial dates as a great time to dream about our future together.

As two people join their lives together, it is essential that both of them work toward their common goals and be honest with each other. Understanding each other’s strengths and weaknesses before tying the knot will make it a lot easier to enjoy the marriage.

Did you (or will you) talk about finances before your marriage? How did you handle your finances as newlyweds? If you had to do it over again, would you do anything differently?

Your Internet passwords stink, but it’s not (completely) your fault

• Identity Theft
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This post comes from Sean T. Johnston at our partner site Zing.

If you’re like most Americans, you probably don’t pay much attention to creating impenetrable passwords for your online accounts. According to Splashdata, an online password provider, the list of the top online passwords are just terrible from a security standpoint.

The good news is that “password” is no longer the number one password online (it’s now number two!). The bad news is that “123456” took the top spot; “abc123” and “111111” were also among the top 10.

C’mon people, really? Your financial information, emails and personal data are online, and the only thing protecting your information from people with nefarious intentions is “123456”?

Do yourself a favor and take a look at this list of the most common passwords in 2013. If anything looks familiar, you should follow these tips to create more secure ones.

Now that we’ve addressed your terrible passwords, let’s talk about the websites that allow them. In fairness, they should know better than to let a flimsy string of sequential numbers be the only layer of password cyber security for their customers.

According to a recent study by Dashlane, a password management application, not all online companies have the same commitment to ensuring their clients create rock-solid passwords. The Dashlane study scored many leading websites on their password policies. You can read the full study here, or a summary on Gizmodo.

Key Points from the Dashlane Study

  • Over half of the 100 largest e-retailers still accept weak passwords like “abc123” and “123456”.
  • Over half of the websites tested do not block entry to an account after 10 incorrect password attempts.
  • 61% of the websites don’t offer any assistance to new registrants in creating secure passwords.
  • Only 10% of the online retailers tested met Slashdata’s criteria for “good password policies, ” a score of 45 or above.
  • Eight sites tested send passwords in plain text via email, which is widely considered among Internet security experts to be a bad idea.

Only one major online retailer, Apple, scored a perfect 100 in the Slashdata study, while several major websites were in negative territory. Amazon, Overstock and Office Depot were among those with low security scores.

The Fix is Simple

The problem is clear, but what would it take to solve it? According to the study, there are four things online retailers can do to improve their security policies:

  • Require that all passwords contain at least eight characters with a combination of upper and lowercase letters, numbers and special characters.
  • Block account access attempts after four failed password entries.
  • Give users on-screen advice for creating secure passwords when they sign up.
  • Assess the strength of passwords as users are creating them.

When it comes to lax password security it’s clear that there’s work to be done on both sides of the equation. We, as consumers, need to put a little more attention into creating secure passwords than we currently do. On the other hand, several major Internet retailers clearly need to beef up their policies and stop enabling us to create lazy passwords.

Or, we can just wait until alpha-numeric passwords are obsolete. That day is not too far off, either.

More stories from Zing:

Online sales tax: What’s the deal?

Buying and Selling Homes in 2014: A More Balanced Market

Decorating Your Home: A Guide for Music Lovers

How Something You Might Not Know Costs You Thousands…

• Consumer•Mortgages
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…And What You Can Do About It

We live in a complex world where many things happen around us that we’re at a loss to understand or explain. High CEO compensation, soaring health care costs, a biased media and politicians being bribed are but a few of the things we see wrong with the world. Those (and other) problems have their root in a single trait of human nature. The study of that trait is called agency theory. In a nutshell, agency theory states that when a principal hires an agent, the agent is supposed to act in the best interests of the principal. However, despite being compensated in accordance with the principal’s interests, agents will pursue their own best interests, even at the expense of the principal compensating them. That may sound abstract and ivory-tower irrelevant to your daily life, but it isn’t. It affects your pocket book, directly and often.

Health Insurance

Take health insurance. The insurer collects premiums from millions of people and becomes the gatekeeper for your medical expenses. Doctors, pharmacies and hospitals all have to submit their claims to the insurance companies for payment. You would think those insurance companies’ interests would be aligned with yours and the other policyholders: The less they pay out in claims, the more money they keep. You would think that they contest claims and negotiate them down to the lowest possible number to save everybody money.

You would be wrong. Their incentives work in exactly the opposite way. It didn’t start out like that, though. In the beginning, it worked as planned: Insurance companies predicted what claims would be and set their premiums a little above that (let’s say 30 percent) in order to cover their expenses and leave them a little profit.

It took only one bad year for insurers to discover something nobody thought of. Claims, despite their best efforts, happened to be higher one year than expected. That, as you can imagine, ate into the allowance they had set up to cover their costs. The outcome? No profits, no bonuses, no raises, no budget to hire help to process extra claims.

So, the following year, they told their employer clients, “Look, guys, we lost our shirts last year. We have no choice but to increase our rates across the board. You’ll see everyone’s doing the same.” Employers looked around and, sure enough, all insurers were upping their rates.

The insurance companies’ “30 percent” increased the following year on the backs of the higher premiums. Then there was enough in the budget for help, raises and bonuses, especially at the top level. However, halfway through the year, the brass discovered claims were dropping again. They faced a tough choice.

EITHER they would be forced to:

  • lower their premiums the following year (They couldn’t very well go back to their clients and say, “Hey, guys, claims were down, but we’re going to keep raising your premiums.”)

– OR –

  • with much shoulder-shrugging and crimped mouth corners, explain that claims went up yet again, necessitating another round of premium increases. But, of course, claims would need to actually have gone up for them to do that. Hmmm… what to do?

Then someone came up with a brain wave: If you lay off half the claims processors as part of “prudent cost control, ” that would impair their ability to contest every claim, which would “accidentally” allow more questionable claims to slip through.

If they followed the first course of action, their 30 percent would go down. That would mean no raises or bonuses. However, if they were forced to show the clients an increase in claims, then their 30 percent would grow the following year. Saving cost (by laying off part of their workforce) and raising next year’s 30 percent — Can you spell “no-brainer”?

It’s no surprise that, after a decade or two of following this system, America has one of the highest cost health care systems, with one of the worst in terms of outcomes. It’s also no surprise that their combined lobbies pushed for Obamacare, which simply takes that system, offering the same policies as before, but forcing everyone to buy.

But wait. There’s more

Speaking of CEOs and their skyrocketing compensation packages, that’s another face of agency theory in action. Boards are supposed to represent stockholders and keep compensation to CEOs to the minimum needed to get the job done. However, CEOs stock the board with other CEOs and together they embark on a strategy of back-scratching: “I’ll approve a raise for you if you do the same for me.” Again, the agents look out for themselves first, at the expense of the people they’re supposed to represent.

Well, this is interesting and fine for a good after-dinner rant or two, but how does it affect you (other than paying more for your health care)? In a general way, it’s a warning to beware of assuming others will do well by you just because you pay them to protect your interests.

Take real estate agents, for example. When you sell your house, your realtor will tell you that your interests are aligned: He gets more money if he pushes for the maximum price for your house. That’s good theory, but it doesn’t necessarily work in practice.

Here’s the math:

Let’s say you want $400, 000 for your house. Normal realtor commission is 6 percent, split between two agents. If your agent works for an agency, they will usually take half, more or less. That means your agent makes 1.5 percent, about $6, 000 on the sale of your house. Another $10, 000 for your home would only put $150 more in his pocket, but it would take a lot of extra work to get that $10, 000 for you. Which do you think he’ll push for: a quick sale so he can move on to the next $6, 000, or the heavy pursuit of another $10, 000 for you… for $150?

You may do better if you:

  • Stick to your guns on your price, especially in the seller’s market we seem to have nowadays.
  • Pick an agent who’s a one-person show and, therefore, gets to make $300 extra for that extra $10, 000.

The bottom line is if you totally abdicate, it most likely will cost you tens of thousands of dollars. They may make it sound like they know everything and you know nothing; but if you get involved, you might learn enough to make sure they don’t trample all over your best interests.

Another example comes from the world of financial planners. Nothing against them as individuals or as a group, but their best interests are not always directly aligned with yours. It is tempting to hand your money to someone else and expect them to get the greatest possible return for you, or at least more than you could earn yourself. You have to know that, although they may indeed pursue good returns for you, their first priority will be their own well-being… not yours.

Abdicating responsibility for your money can be very expensive, without your even realizing it.

As stated in the opening, we live in a society where we parcel out almost everything we do, from mowing the lawn to selling our home. In ivory-tower terms, we utilize agency theory every day.

If you understand agency theory, you may be surprised at how many ways you can make or save money. (Oh, and by the way, it is always better to invest than to complain. After the passing of the ACA, I shifted some of my investments into health care stocks. They’ve outperformed everything else in my portfolio.)

You have the option of involving yourself to a greater or lesser degree in all areas affecting your wealth. The point of this post is understanding that your cost for subbing out a service may be more than the cash you pay for the service.

In general, the more you involve yourself in anything, the bigger the payoff. That time and effort can put cash in your pocket.

Lack of sleep costing you a fortune?

• Family & Life•Productivity•Working
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A sleep-deprived, bleary-eyed look is practically a rite of passage for most new parents. I knew I wouldn’t get much sleep for the first few months, so I planned for it. I finished all my assignments ahead of schedule, and arranged for help with household chores. I was prepared for my sleepless nights — at least I thought I was. One thing I forgot to consider was how much it would affect my finances. Now that my baby is three months old, I am getting much more sleep. I was doing our usual year-end review when I saw in numbers how much our sleep deprivation has cost us and how much of a positive influence a good night’s sleep can have on finances.

How can sleep affect your personal finances?

Pay for convenience: Poor sleep makes our bodies weak and tired. Who wants to cook and clean when they are very tired? Not me. We had a lot of help with cooking from family; but the days we didn’t have help, we ate out. If I wasn’t worried about our health, I would have ordered pizza every day.

Too many late fees: I missed two credit card bills. Adding the late fees and the interest, it would have cost us a pretty penny. As I am usually very diligent in paying my bills, the credit card companies removed all the charges and didn’t report me to the credit bureau.

Shopping hastily: I love to shop. I don’t usually shop in a hurry. I make a list, look for the best deal and won’t buy anything without letting it stew on my list for at least a few weeks. But when I reflect on my shopping habits these past three months, I see how much I have wasted. I felt there was very little time for any research, so I bought the first thing I saw. I knew I didn’t have much time outside the home, so I bought stuff without taking the time to evaluate. I used shopping as my stress reliever as evidenced by my credit card bills.

Making bad decisions: We make thousands of decisions every day, including plenty of important financial decisions. I usually buy and sell a few stocks at the end of the year. This year, I didn’t. If I had, I am pretty sure I would have made bad decisions. Sleeplessness causes stress. Researchers have found that stress can make people, who are usually responsible with their money, to choose riskier and not well-thought-out options.

Poor judgment: There is a reason why one should not drive or operate machinery while intoxicated. Alcohol impairs judgment. Studies have shown that sleep deprivation is as bad as alcohol. If you get only five hours of sleep a night for one week, the impairment level is equivalent to a blood alcohol level of 0.1 percent, which is legally drunk in all states. It is irresponsible to drive in a sleep-deprived state; it not only endangers the person driving but puts others in danger as well. Even if you hit a tree, imagine all that you have to go through dealing with insurance, not including the increased insurance rates for several years to come.

Decreased productivity and poor work performance: Knowing my due date ahead of time, I finished all my freelancing tasks and kept my schedule open for three months. If I had not done that, I can easily see my productivity level touching zero. Anyone working a regular full-time job would not have been able to pre-plan so much. By not sleeping and being very tired, they would definitely not have put their best foot forward at work. They take longer to solve a problem and may not be good communicators with their co-workers. Unfortunately, many people think they can get ahead by working longer hours and giving up their sleep. That is not true. Even one night’s sleep loss impairs innovative thinking and flexible decision-making. This could definitely affect their bonus or salary increases and could have lingering negative effects on their career development.

These doesn’t even touch upon the long-term effect sleep deprivation could have on one’s health — more medical bills due to lack of exercise, obesity and stress.

The solution to this is pretty simple — get a good night’s sleep. We are always running. Life has become too busy; but for the sake of our health and finances, we have to make a sincere effort. For new parents, sleep deprivation is unavoidable. For others, we can try to improve our sleeping habits for the sake of our financial future.

  1. Relax before you go to bed so you fall asleep sooner. Avoid late night TV. Instead, opt for a relaxing bath or read a book.
  2. Exercise. My husband attributes his great sleep habits to his exercise regime. He says his sleep suffers if he doesn’t exercise for a few days. Exercise reduces stress and helps us relax.
  3. Slow down and take a breather.

Don’t take your sleep for granted! The National Sleep Foundation recommends at least seven to nine hours of sleep. How much sleep do you need to function at your optimal level? Have you felt the effect of sleep on your finances?

Longevity logic and retirement rationales

• Retirement•Saving & Investing
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The professional association to which I belong meets the second Tuesday of the month. Afterward, many of the members in attendance hit a nearby Italian bistro for a buy-your-own dinner.

Last week, I exited for home alongside another long-time association member, George, who had a train to catch. I asked if he’d commuted downtown just for the meeting, and he said he hadn’t. “I had a meeting with a company down here earlier, and it looks like I’m picking up a new client, ” he crowed.

Though hale and hearty, George is the very picture of a guy bearing down on that traditional retirement age of 65. I told him I admired him for being on the new business trail. And if you don’t mind my asking, I added, “How old are you?”

“I’m 76, ” he responded.

Whoa! Now I was really impressed. I remarked that when I’m a bit more than three years away from octogenarian status, I want to be as vigorous as he.

“I don’t have much choice, ” he said. “I’m from a line of long-lived folks.”

“Ah, people who lived into their 80s, ” I guessed out loud.

“No, people who lived into their 90s, ” he corrected. “So I have years to go, and besides, I don’t have a ton of savings. If that’s where you’re at, you work.”

We hear about older folks dallying in the employment pool much longer than they used to. But when you begin to encounter lots of these graying workforce members in the flesh and blood, you begin to grasp the magnitude of the paradigm shift.

Among a few earlier generations I could cite, folks past the three-quarters of a century milepost weren’t often seen looking for new business. They were seen looking for new shuffleboard partners. They weren’t seeking the right fit for their client mix. They were seeking the right fit in a new set of dentures. They weren’t pounding the pavement. They were pounding Geritol.

Anchored expectations

Those thoughts were still resonating when I got wind of a new study into attitudes about saving and retirement. Academic research has long shown a link between how long people expect to live and the age at which they hang ’em up. The new study takes this recognition a step further, examining how folks arrive at their estimates of their own life expectancy. These estimates, it turns out, have a number of significant implications for the quality of their retirement finances.

Like George, it appears, most people anchor their retirement expectations to the longevity of their forebears. They base the expectation of how long they will walk this mortal coil on how long their parents postponed the inevitable.

This has an impact on both retirement planning and retirement behaviors. It also suggests that efforts targeted at increasing knowledge about longer life expectancies may also increase the percentage of folks who plan on working longer.

Using data on people ranging in age from 50 to 61, a team made up of two researchers at the Center for Retirement Research and a Boston College doctoral student confirmed individuals base at least some of their expectation of how long they will live on the length of their parents’ lives. On average, men tend to think they have a seven-in-ten chance of living to 75, based on their parents’ lives. That guides their plans to retire at an average age of 64. Those who think they have half those odds plan to retire about four months earlier, on average. This “subjective life expectancy” also influences women’s retirement plans.

Not so fast

The study notes, however, it might be foolhardy to base subjective life expectancies on the age at which our parents passed away. “Life expectancy has risen rapidly in recent decades, so people are living longer, ” the authors noted. For instance, a 65-year-old man today can expect to live to age 84, or about four years longer than men of that age in their fathers’ generation lived.

If you’re among those who expect, based on family history, to live well into your 80s, 90s or beyond, personal finance actions and behaviors that all people are encouraged to embrace should be observed even more religiously by you. These actions go well beyond simply seeking the most optimal high-yield savings accounts or the best credit cards.

Here are just a few:

  • Start saving earlier. Given the power of compounding, getting started on a saving regimen earlier rather than later can make a huge difference in the bucks you’ll carry into retirement. It can be hundreds of thousands — or more.
  • Be careful about fees. Loads, commissions, fees and other expenses can seriously pare your stash of savings over time. If you’re expecting to live a long time, be particularly suspect of any charges that will erode your nest egg.
  • Delay taking Social Security. Lots of people jump at the chance to claim their Social Security checks at age 62. That’s far from the best course of action, say retirement planning experts.

If you have sufficient savings to allow yourself to delay beginning the stream of checks until close to age 70, you’ll add almost 80 percent to the amount you receive each month vis-à-vis what you would have earned if Social Security was taken at the earliest possible age. And you’ll lock that sum in for the rest of your life.

Remember the old line that went, “If I knew I would live this long, I’d have taken better care of myself”? It seems that might apply to financial health as well as physical health. In other words, you might be best advised to save as if your life will be long, even if you think it may be comparatively short.

That’s the long and short of it!

How to complain effectively and get results

• Consumer
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As soon as we signed the contract to buy our first home, I started dreaming about furnishing it. After years of drooling over pretty furniture catalogs, I finally had a place to decorate. I have also been saving money specifically to furnish our house and, as a part of that fund, I have been collecting furniture store gift cards.

The minute our closing date was finalized, we ordered a couch for our living room from a famous furniture store. I started obsessing over the throw pillows, décor items and other accessories to complete the living room. I ordered the couch online and didn’t actually see the couch color in person. So all I needed was the couch to be delivered to make sure everything would go well together. I even invited people over to our house a week after the scheduled delivery date for a house-warming party.

Well, it didn’t really pan out as I had imagined. Long story short, it took over three months for the couch to be delivered. After numerous phone calls to customer service representatives and, later, their supervisors, after the broken promises and hours of our time, we finally got the couch we wanted and a $150 gift card for our trouble.

How is one supposed to handle a situation like this? How can we make sure we are not getting ripped off? After dealing with too many not-so-great-customer-service incidents, I compiled a list of steps that could help prevent situations that give rise to customer complaints and what to do if a complaint is still unavoidable.

Before leaving the store

Make sure the receipt includes the following:

  1. The exact model you are ordering. (It is a good idea to check the model number online to see if it matches what you ordered.)
  2. Expected delivery date.
  3. Price paid/payment arrangements. If you are signing up for a zero-percent offer, make sure it spells out all the terms.
  4. If you agreed to anything verbally, write it down and get someone from the store to sign on it.

If you feel you have been wronged

  1. Keep calm. Customer service representatives get a lot of heat from dissatisfied consumers; treating them kindly will help you get a better response from them.
  2. Ask to speak to a manager or supervisor. If you aren’t getting anywhere by talking with the representative, ask for a supervisor instead.
  3. If it is a local store, you may want to contact your local news channel or newspaper.
  4. File a report with the Better Business Bureau.
  5. Use your credit card company. (I bought my couch with gift cards, so this option wasn’t available to me. If I had used my credit card, and if the company refused to refund me the rightful amount, I would have definitely asked for my credit card company’s help.)
  6. Take the discussion online. If you are not satisfied, let it be known. Write reviews — ripoffreport, company Facebook page, and any other review sites. Do not be afraid to tell the truth, but keep a professional tone. It will come up when people search before buying. You might save someone from going through the same ordeal as you have. If you are savvy with social media, get a conversation going on Twitter.
  7. Contact your local chamber of commerce or consumer advocacy agency.
  8. I have never tried this personally, but I have heard emailing the CEO/COO of the company often results in quick resolution. If you are doing this, make it short, be as specific as possible, give a clear timeline of events and state your expectation.
  9. Keep the paperwork. One company charged me interest well before the zero-percent financing ran out. I had to fax them the original paperwork showing the financing terms. It is always good to keep all the paperwork until you pay it off.
  10. Every time you call, have a record of the conversation. Create a history of your conversations with the following information:
    • Date and time of your conversation
    • Number called
    • Wait time
    • The customer service representative’s name and employee number
    • What did you agree on?
    • A follow-up date, chosen by them, by which a full resolution is expected

We vote with our dollars. As for me, I will never buy anything from this particular store again, and I have told a few of my friends and family about my experience as well. I find that knowing what I want as the resolution, along with any additional compensation for my dissatisfaction, before starting to complain and approaching the whole situation as a negotiation yields the best results.

Have you ever had a bad experience with any stores? How did you resolve your conflict?


How to get the best deal on a midwinter vacation

• Travel
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This post comes from Halina Matt at our partner site Zing.

It’s pretty much universally understood that the first thing on everyone’s mind midwinter is vacation. Whether it’s due to cold-weather blues or holiday hangover, packing up your bags and getting far, far away for a little while can be very tempting during the frigid months. If this sounds familiar, you’re in luck. Booking travel between mid-January and mid-February can often mean big savings.

According to USA Today, February can be one of the best months to vacation on a budget. The reason is fairly simple: People seeking to escape poor weather conditions, combined with lower demand due to school and work schedules, make the perfect recipe for cheaper travel deals.

Here are some things to consider if you’re in the market for a midwinter getaway.

Head to the Beach

Looking for a warm-weather pick-me-up? A sandy, blue-sky beach destination may be just what you need. The good news is that there are many beaches around the world that can provide the perfect background to your February vacation, and according to USNews.com, you’ll likely enjoy temperatures in the 80s should you head out to the Caribbean islands. Worried about getting caught in bad weather? Don’t worry, hurricane season lasts from June 1 to November 30, and weather alerts should give you plenty of time to prepare in advance.

Remember, though, if you decide to head out of the country for your vacation, you’ll need to have your passport in hand, which can typically take 4­–6 weeks to process. Other options not requiring a passport for entry include Puerto Rico and the U.S. Virgin Islands.

Hit the Slopes

Are you more of a snow bunny than a beach bum? Then grab your skis and hit that powder! Ski trips don’t have to break the bank. There are plenty of budget-friendly options out there if you look around. One easy way to save big is to look beyond the more expensive, well-known locations, according to US News, such as Reno, Nev., Vancouver, British Columbia, and Ogden, Utah, just to name a few.

BudgetTravel.com recommends searching for ski packages and discount lift tickets in advance, as a little research on the front end can save you big time in the long run.

Travel Abroad

If you’re interested in traveling across the pond to Europe, but you’re working from a tight budget, winter may be your best chance to make it work. Not only is it less expensive, but also your destination will likely be less crowded than in the summer months.

Take a Cruise

If hitting the high seas floats your boat (see what I did there), a cruise may be just the vacation you need. A quick Internet search revealed tons of great cruise deals out there right now on sites like Expedia,  Kayak,  Orbitz,  Travelocity,  Priceline and Hotwire (just to name a few). These sites also offer package deals on flights, hotels and cars, so it’s a good idea to explore your options and get the best bang for your buck.

Also, keep in mind that no matter where you’re going, it never hurts to look over online coupon sites like Groupon.com and LivingSocial.com for a large variety of discounted vacation deals all over the world.

Do you have any tips on how to save big on a midwinter vacation? Share with all of us in the comments below!

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Online sales tax: What’s the deal?

Buying and Selling Homes in 2014: A More Balanced Market

Decorating Your Home: A Guide for Music Lovers