money

Bucks: Keeping Affluent Kids From Turning Into Brats

May 14, 2011 by NewsMaker Leave a Comment

In this weekend’s Wealth Matters column, Paul Sullivan looks at the reasons wealthy families are not giving a lot of large gifts to children and grandchildren right now, even though they may miss out on the opportunity to take advantage of generous tax rules that will only last until the end of 2012.

Scratch below the surface, as he did, and you quickly find that people are worried sick about family members using the money to live out their days on a beach somewhere. So the people with the money are trying to construct trusts with various restrictions aimed at making sure that the relatives continue to be productive members of society.

So let’s say you were the trust-master. How would you restrict a trust to make sure your heirs continue to work (or do good works)? What incentives would you put in place?

Article source: http://feeds.nytimes.com/click.phdo?i=f1dc2c13e577066420c4c93c2476333c

Filed Under: Your Money Tagged With: brats, money, trusts

Bucks: Security Freezes: How They’ve Worked Out for You

May 7, 2011 by NewsMaker Leave a Comment

In this weekend’s “Your Money” column, I write about security freezes, also known as credit freezes, in the wake of the big customer data breach at Sony.

After such a breach, standard best practice now seems to be to offer affected customers credit monitoring or something similar. But no companies (or employers, who have experienced plenty of breaches, too) ever seem to offer security freezes, which allow the person who sets them up to keep anyone from accessing their credit reports. Without that access, companies generally won’t set up a new account, which keeps the bad guys from opening new accounts in your name.

Sony, too, isn’t offering its customers free credit freezes, alas. I’ve had my files frozen for years, and thawing them to refinance a mortgage or get a new credit card rarely requires little more than 10 or 15 minutes of effort, plus a bit of money to pay the fees.

Are your credit files frozen, and if so, how has it worked out for you? Anyone out there refused to freeze their files for whatever reason?

Article source: http://feeds.nytimes.com/click.phdo?i=1202980997bd4d86db8fa4aecf10dd82

Filed Under: Your Money Tagged With: money, mortgage, sony

You’re the Boss: Can You Make Money on Small Customers?

April 27, 2011 by NewsMaker Leave a Comment

We just published a case study that explores whether Big D Screen Printing can become profitable by taking small orders — even ones for a single T-shirt.

Darren Robbins and a partner started the company in 2007. Mr. Robbins said the two disagreed about the type of customer Big D should pursue. While not opposed to accepting large orders, Mr. Robbins was reluctant to decline any business, no matter how small. His partner saw no point in catering to customers who wanted one or two shirts. The two parted amicably after a year. Mr. Robbins then revamped his prices, effectively removing the penalty that his competitors charged for small orders. He also eliminated set-up charges, and posted his prices online, two moves he hoped would help differentiate Big D.

We asked other business owners what they thought of Big D’s decision to go small. You can read their thoughts and then share your own in the comments section below. Next week, in a followup blog post, we will tell you how things turned out at Big D and Mr. Robbins will respond to your comments.

Carol Adams, owner, TorlyKid, a children’s clothing store: “If a business focuses solely on fewer large accounts, and one of those disappears, the consequences can be devastating. We try to expose as many people as possible to our business, and that exposure can only come by nurturing the smaller clients as well as the large ones.”

Michael Araten, president, K’NEX Brands, a toymaker: “Like Mr. Robbins, Wal-Mart, Zappos, and Amazon.com focused on small customers and transparent pricing, while making it easy for them to get customized products. Small orders pay for the day-to-day. Large orders are incremental profit that leverage Mr. Robbins’ expertise. I’m certain he can have it all.”

John Olson, chief executive, Graystone Industries, a pond and fountain supply business: “The partners should have targeted midsize accounts, handling larger orders when they arose and smaller ones to fill gaps. Mr. Robbins limited himself to a niche within a niche with little upside potential. He can run profitably and perhaps make a nice living but the company won’t be efficient.”

What do you think?

Article source: http://feeds.nytimes.com/click.phdo?i=1800ca9fd21deb979443cead160dca95

Filed Under: Small Business Tagged With: big d, customized products, money

You’re the Boss: Why Is It So Hard to Raise Prices?

April 21, 2011 by NewsMaker Leave a Comment

Jeff Swensen for The New York Times Naomi Poe, founder of Better Batter Gluten Free Flour

As today’s small-business guide to pricing makes clear, a lot of small-business owners are reluctant to raise prices — sometimes even when they are losing money on every sale. Naomi Poe, who founded Better Batter Gluten Free Flour, initially priced her product to compete with nongluten-free competitors even though her costs were higher than theirs. Eventually, she decided to increase her prices and found her customers were encouraging.

Have you tried to raise prices? What has your experience been?

Article source: http://feeds.nytimes.com/click.phdo?i=725271f4500f26885c5fabaa91b66413

Filed Under: Small Business Tagged With: boss, free flour, money

Bucks: A Tax Refund in 28 Days, Not the Feared 145

April 9, 2011 by NewsMaker Leave a Comment

Tim Ryan says he’s not sure exactly how it happened, but he’s not complaining: When he checked his bank account on Friday, it indicated a deposit of $1,009 — from the Internal Revenue Service. His tax refund had arrived, much sooner than he had expected. “It must be an Easter miracle,” he said in an e-mail.

Mr. Ryan was the subject of an earlier post because the I.R.S. told him on March 11 that his refund might be delayed 145 days, or into the summer, in part because of computer glitches in processing certain returns. The problems centered on filers who had taken the 2008 home buyer credit and were now beginning to repay the credit (the 2008 credit was really a no-interest loan that had to be repaid over 15 years, starting with tax returns filed for the year 2010). Mr. Ryan further frazzled the agency’s systems by paying more toward the credit repayment than required.

But earlier this week, Mr. Ryan said, he checked on the I.R.S. Web site and was given an expected date of April 12 for receipt of his refund, and then, when he checked again, of April 8. The I.R.S. apparently did indeed work “promptly,” as it had pledged, to process the delayed refunds — although it still hasn’t said just how many filers were affected by the home buyer credit problem.

Mr. Ryan said he didn’t plan to spend his money right away — just in case the earlier than expected refund wasn’t permanent. “I think I’m going to hang onto it for a while.”

If you started repaying the 2008 home buyer credit this year, have you received your refund yet?

Article source: http://feeds.nytimes.com/click.phdo?i=b10cf3145d872285d5a609d849480138

Filed Under: Your Money Tagged With: buyer credit, filers, money

Is It Better to Buy or Rent?

April 3, 2011 by NewsMaker Leave a Comment

Buying

Purchase costs are the costs you incur when you go to the closing for the home you are purchasing. This includes the down payment and typical closing costs.

Yearly costs are recurring monthly or yearly expenses. These include mortgage payments, condo fees (or other community living fees), renovation costs, maintenance costs, property taxes and homeowner’s insurance. Property taxes, the interest part of the mortgage payment, and in some cases, a portion of the common charges, are tax deductible. The resulting tax savings is accounted for in each item’s totals. The mortgage payment amount increases each year for the term of the loan because the tax credit shrinks each year as the interest portion of the payments becomes smaller.

Lost opportunity costs are tracked for the initial purchase costs and for the yearly costs. The former will give you an idea of how much you could have made if you had invested the down payment instead of buying your home.

Selling costs are the costs you incur when you go to the closing for the home you are selling. This includes the broker’s commission and other fees, as well as the remaining principal balance that you pay to your mortgage bank. “Proceeds from home sale” is the money that you receive from the person who is buying your home. This amount is equal to the value of the home that year and is shown as a negative number since it is not something that you spend money on, but rather, it is money you receive.

If your cumulative buying total is negative, it actually means you have done very well: you made enough of a profit that it not only covered the cost of your home, but also all of your yearly operating expenses.

Article source: http://feeds.nytimes.com/click.phdo?i=8d6bda5f6014671a3bd7a4ed55e279d7

Filed Under: Your Money Tagged With: insurance, money, operating expenses

Your Money: Adding It Up: Amazon Ship vs. Costco Shop

April 2, 2011 by NewsMaker Leave a Comment

Amex has a couple of different Costco-branded credit cards. The ones currently available to new customers earn 2 percent back on all travel purchases, 3 percent on all restaurant charges and at least 3 percent on gasoline (at any station, not just Costco ones) up to certain annual spending limits. Plus, you get 1 percent cash back for spending everywhere else.

The check arrives attached to the bill for February, but it comes with a catch: You have to go to Costco to redeem it. You can just collect cash, turn around and walk out. But Costco is clearly hoping that most people will see the check as a good excuse to go shopping right then and there. And that’s what most people seem to do.

I have this card and love it. But I’ve also begun to question the value of the time it takes for an expedition to one of these stores. And if you shop at Sam’s Club or BJ’s, Costco’s competitors, you may be wondering, too.

After all, the older you get, the more valuable your time seems. And going to Costco, even though it’s just a couple of miles from my home, is generally a two-hour round trip by the time the driving, the shopping, the waiting in line, the loading of the car and the unloading back home are done.

In 2007, meanwhile, Amazon.com introduced a service called Subscribe Save. The premise is simple: If you agree to get a recurring shipment of an item, Amazon will cut 15 percent off its normal price and send it to you every one, two, three or six months without charging the standard shipping rate. So I subscribed to toilet paper, which makes for a great story and good fun for children when three months’ worth arrives and become a temporary tower or a fort on the living room floor.

Ever since the toilet paper subscription (and later, the paper towel one) started coming, I’ve wondered what it would be like to subscribe via Amazon to everything I get at Costco and never set foot in the place again, except to cash my check each year.

So this year, $304.50 refund check in hand, I went to Costco with a list of items that most households need to replenish every so often. I recorded the prices. Then, I compared them with identical items at Amazon, looking in particular for the ones among the 40,000 or so that are now available for subscription.

My guess is that many Costco customers would find that any savings they gain by shopping there is eliminated and then some when they consider the value of the time spent going to and fro many times a year. That’s time they would win back if they subscribed to those same items at Amazon and then never had to think again about running out of them.

My Costco list included the following: Huggies diapers, Tide powder, Bounty paper towels, Swiffer refills, Clorox wipes, Ziploc sandwich bags and enough Duracell batteries to power multiple electronic devices for many months.

There was also Dove soap, Lubriderm lotion, Tampax, Mach 3 Turbo razor blades and enough house brand ibuprofen to kill off hundreds of headaches, among other things.

Then, I spent some time on Amazon’s site and recorded the per unit price for each of these items. Almost all were available at the discounted subscription price, which manufacturers help Amazon pay for (so excited are they by the idea of a recurring pipeline into people’s homes and wallets).

Setting up Amazon subscriptions for the first time probably takes about as much time as a round trip to Costco. But, according to Doug Herrington, vice president of consumables for Amazon, many people start with just a few items. “They add over time,” he said. “They start with one big schlep factor, like toilet paper or diapers.”

Over time, you may need to adjust your delivery dates So what does that 15 percent discount get you? My sample basket of goods, enough for a three-month supply for a family of four, cost $251 at Amazon. At Costco, it was $208, representing a 17 percent savings.

Costco was tied or cheaper on every item, occasionally by a lot. Amazon, for instance, isn’t competitive on large containers of cleaning liquids of various sorts, since it’s just too expensive to ship those sorts of things.

Article source: http://feeds.nytimes.com/click.phdo?i=0a79f26d7a5255a28ba1dff2d00b8d96

Filed Under: Your Money Tagged With: money, toilet paper, travel purchases