DailyFinance.comhttp://www.dailyfinance.comDailyFinance.com%http://www.blogsmithmedia.com/BlogURL%/media/feedlogo.gifDailyFinance.comhttp://www.dailyfinance.comen-usCopyright 2012 Weblogs, Inc. The contents of this feed are available for non-commercial use only.Blogsmith http://www.blogsmith.com/The Best (and Worst) Graduation Advice You Never Heardhttp://www.dailyfinance.com/2012/05/25/the-best-and-worst-graduation-advice-you-never-heard/http://www.dailyfinance.com/2012/05/25/the-best-and-worst-graduation-advice-you-never-heard/http://www.dailyfinance.com/2012/05/25/the-best-and-worst-graduation-advice-you-never-heard/#commentsFiled under: , ,

Travis Stork"Benjamin...I want to say one word to you. Just one word...Are you listening?"
"Yes, I am."
"Plastics."
"Exactly how do you mean?"

Along with the ties and fountain pens, recent graduates get a lot of advice. And, while most of it is better than the earnestly delivered career suggestion in The Graduate, it can often be contradictory, confusing, and even downright disastrous. With that in mind, we asked some leaders in business, entertainment, and publishing to share the best and worst advice that they ever received. And, while we were at it, we also asked them for the most useful suggestions that they could give the next generation.

What they said was surprising -- and, in many cases, gave us a good idea of how they got to where they are.

Gallery: The Best Graduation Advice You Never Heard

Robert Johnson, founder of BETTim Zagat, co-founder of Zagat restaurant guidesW. Bruce Cameron, authorMike Rowe, host of Dr. Travis Stork, host of


Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.

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]]>8 Simple RulesA Dogs PurposeADogsPurposeadvice for graduatesAdviceForGraduatesBlack Entertainment Televisioncommencement speechCommencementSpeechDirty JobsDr. Travis L. StorkDr.TravisL.StorkEight Simple Rules for Dating My DaughterEightSimpleRulesForDatingMyDaughterMike Rowetim zagatTimZagatW. Bruce CameronZagat GuidesZagatGuidesBruce WatsonFri, 25 May 2012 05:30:00 ESTWhat Mark Zuckerberg Can Learn From Ben and Jerryhttp://www.dailyfinance.com/2012/05/24/facebook-mark-zuckerberg-ben-and-jerry-lesson/http://www.dailyfinance.com/2012/05/24/facebook-mark-zuckerberg-ben-and-jerry-lesson/http://www.dailyfinance.com/2012/05/24/facebook-mark-zuckerberg-ben-and-jerry-lesson/#commentsFiled under: , , ,

Mark ZuckerbergDespite some ups and downs Wednesday, Facebook's stock closed at $32, a dollar up from where it ended the day Tuesday. But, while the stock seems to be reaching an equilibrium, its rocky IPO has revealed some basic problems that Facebook (FB) -- and, more precisely, Mark Zuckerberg -- will face as they navigate the rocky shoals and treacherous waters of public ownership.

In the frenzied weeks before its IPO, Facebook released a 30-minute "roadshow video," in which Zuckerberg and company discussed their vision of a warm and fuzzy world where sharing is instantaneous and universal. About halfway through, the filmmakers called in Jostein Solheim, the CEO of Ben & Jerry's ice cream, to explain how his company uses the social network to connect with customers: "We really want to have a holistic relationship with our community, with our consumers about values, about great ice cream. So having a platform where we can actually engage in a large-scale conversation, get feedback ... That's what's so powerful about Facebook."

Cuddly relationships with consumers are notoriously hard to quantify, at least in terms of dollars and cents, so Ben & Jerry's global digital marketing manager Katie O'Brien was on hand to explain the company's Facebook's involvement in terms of the bottom line: "For every $1 we spend on Facebook, it returns $3 in incremental sales."

Notably missing from the Ben & Jerry's video segment were Ben Cohen and Jerry Greenfield, the self-described "Vermont hippies" who founded the brand in 1978, and whose faces still appear in much of the company's packaging. The pair was shunted aside in 2000, when their little ice cream company was swallowed by Unilever (UL), a British-Dutch owned multinational.

A Cautionary Tale

Zuckerberg might not have noticed the kerfuffle when Cohen and Greenfield were let out to pasture -- he was only 16, after all -- but he would be wise to read up on the story now. The tale of Ben and Jerry bears a bracing similarity to his own: Like him, the pair was desperate to maintain control of their company against the efforts of stockholders who were only concerned with the short term bottom line.

As with so much of Ben & Jerry's branding, Cohen and Greenfield's first stock offering relied heavily on a sense of community. In 1984, they literally went door-to-door in their home state of Vermont, selling shares in the company for $126 apiece. Ultimately, they sold shares to 1% of all Vermont households, and raised $750,000, which they used to build a new factory. A year later, they offered $5.8 million in shares on Nasdaq, and used the money to expand their distribution and promotions.

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The IPO was a mixed blessing. On one hand, the money it generated enabled Ben & Jerry's to become a national brand. Unfortunately, it also laid the groundwork for the company's ultimate sale.

In 2008, Greenfield looked back on the takeover, telling a reporter for The Guardian that "We didn't want to get bought ... But we were a public company, and the board of directors' primary responsibility is the interest of the shareholders. It was extremely difficult, heart-wrenching. It was a horrible experience for me and I can probably say it was horrible for Ben too."

And the pain didn't end in 2000: In the years since the sale, many of Cohen and Greenfield's ideals have been pushed to the side in favor of more profitable practices. By the terms of the sale, the ice cream company is still legally obligated to donate 7.5% of its profits to charities, but when it comes to what goes inside the Ben & Jerry's cartons, the all-natural, artisanal ice cream that the founders created has been vastly changed. Today, many of the company's flavors contain artificial ingredients, a fact that forced Unilever, in 2010, to remove the "all natural" claim from many of its flavors.

Dark Clouds Ahead?

Admittedly, Zuckerberg is a lot more sophisticated than Cohen and Greenfield were. Because of careful structuring, the young CEO owns 18% of Facebook's stock, but controls 57% of the voting power. In other words, barring extreme circumstances, the reins of the company will be in his hands for as long as he wants to hold them.

But Zuckerberg also has a lot in common with the two ice cream innovators. Like them, he developed and rapidly built up a visionary company that attempted to be a cultural game-changer. And, like them, the creation of a community -- or, rather, communities -- is central to his business plan. However, while Cohen and Greenfield set out to keep their company in the hands of the little guy, Facebook's pitch was tailored to large institutional investors.

This isn't to say that the Facebook IPO hasn't created a community. For better or worse, the stock offering seems to have created drawn together a disparate, outspoken group of people: namely, shareholders who are ready to pillory Zuckerberg and company for the disappointing performance of its stock. In the few short days since the stock offering, two separate groups have come forward to sue the company for allegedly making "misleading," "untrue" and "materially false" statements in its prospectus.

Gallery: Facebook - A Timeline


To add to the fun, there are also claims that main underwriter Morgan Stanley may have insufficiently communicated its estimates about Facebook's earnings potential and that Nasdaq badly mishandled the IPO, costing early investors millions of dollars.

None of these tempests have a direct impact on Zuckerberg's share of the stock or his potential stewardship of Facebook. Still, as recent lawsuits involving Groupon and JP Morgan demonstrate, stockholder lawsuits have become an increasingly popular tool for grabbing power. If recent developments are any indicator, Zuckerberg can look forward to regular struggles with institutional investors whenever Facebook's stock price dips. In other words, while he can hold onto Facebook indefinitely, enough exhausting shareholder attacks might mean that he won't want to.



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]]>ben jerrysben and jerrysBen CohenBenAndJerrysBenJerryscherry garciaCherryGarciaFacebook IPOFacebookIpoFinanceGrouponice creamIceCreamJerry GreenfieldMark Zuckerbergmergers and acquisitionsMergersAndAcquisitionsMorgan StanleyUnilever PLCvoting sharesVotingSharesBruce WatsonThu, 24 May 2012 05:00:00 ESTAmerica's Uneven Economic Recovery: The 10 Best and 10 Worst Citieshttp://www.dailyfinance.com/2012/05/23/americas-uneven-economic-recovery-the-10-best-and-10-worst-cit/http://www.dailyfinance.com/2012/05/23/americas-uneven-economic-recovery-the-10-best-and-10-worst-cit/http://www.dailyfinance.com/2012/05/23/americas-uneven-economic-recovery-the-10-best-and-10-worst-cit/#commentsFiled under: ,

Washington DCFor the past few months, reports have repeatedly affirmed that the economy is slowly improving. However, as one recent study highlights, some areas are recovering much faster than others. In fact, depending on where you live, the future may be bright ... or bleak.

Last week, CredAbility, a nonprofit credit counseling service, released the Consumer Distress Index, which cataloged the rates of economic recovery across America. Based on 65 surveys conducted by the federal government, private credit companies, and other groups, CredAbility's index analyzes employment, housing, credit, household budget and net worth statistics to determine which areas of the country are surging ahead and which are lagging behind.

Mark Cole, executive vice president and chief operations officer for CredAbility, notes that, while the country is recovering, "people at different levels are experiencing the recovery at very different speeds." This has been especially hard on the middle class: "The average family is still lagging behind," Cole says. "For them, it's been a slow, grinding recovery."

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When it comes to individual states, CredAbility's survey paints an optimistic picture. In comparison to the last quarter of 2011, situations have improved across the country, and no states are classed as being in the lowest "Emergency Crisis" level. On the other hand, none garner the top rating of "Excellent, Secure," and only two achieve the B-level "Good, Stable" rating.

On the citywide level, the economic situation varies widely. Currently, CredAbility ranks the distress levels of America's 25 largest cities, and the company plans to extend its survey to the top 75 later this year. While their list has a few limitations -- for example, some states, like Nevada, don't have any cities in the top 25, while others have several -- it gives a glimpse of the best and worst metropolitan areas to live right now. For a look at the winners and losers, click on the gallery below.

Gallery: Economic Recovery : Successful Cities and Stumbling Cities

Top 10 Recovering Cities: 1. WashingtonTop 10 Recovering Cities: 2. BostonTop 10 Recovering Cities: 3. MinneapolisTop 10 Recovering Cities: 4. Honolulu:Top 10 Recovering Cities: 5. Dallas


Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.




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]]>Atlantabest cities for jobsBestCitiesForJobsBostonChicagoClevelandConsumer Distress IndexConsumerDistressIndexCredAbilityDallasDenverDetroitemploymentGreat Recessionhousehold net worthHouseholdNetWorthhousinghousing marketHousingMarketHoustonKansas City, MissouriLos AngelesMiamiMinneapolisNew York CityPhiladelphiaPittsburghSan DiegoSt. Louis, MissouriTampa, FloridaWashington, D.C.worst citiesworst cities for foreclosuresWorstCitiesWorstCitiesForForeclosuresBruce WatsonWed, 23 May 2012 10:05:00 ESTFacebook's IPO Debacle, Day 3: Un-Friended and Dis-Liked on Wall Streethttp://www.dailyfinance.com/2012/05/22/facebooks-ipo-debacle-day-3-un-friended-and-dis-liked-on-wall/http://www.dailyfinance.com/2012/05/22/facebooks-ipo-debacle-day-3-un-friended-and-dis-liked-on-wall/http://www.dailyfinance.com/2012/05/22/facebooks-ipo-debacle-day-3-un-friended-and-dis-liked-on-wall/#commentsFiled under: , , ,

Facebook stockIt's day three of the Facebook (FB) valuation debate and the world is, once again, falling apart.

As the stock's value continues to drop -- it closed Tuesday at $31, down 8.9% on the day, and down 19% from the IPO price of $38 -- lead underwriter Morgan Stanley (MS) is being attacked for its 11th-hour cut in estimates of Facebook's revenue forecasts. SEC Chairman Mary Schapiro, has claimed that "we need to look at" issues related to the IPO, and analysts are criticizing everyone from Nasdaq to Facebook itself, desperate to find someone to blame.

In a particularly poignant vignette, one outraged hedge fund manager, a self-described "blue collar Wall Street guy" is livid because his $100 million investment in the company has headed south.

The Problems of Valuation

While there's ample evidence to suggest that Morgan Stanley may have colored outside the lines, the bigger problem is that, as the market is trying to determine the actual value of Facebook, it's becoming increasingly clear that many of the traditional valuation rules don't apply. The company has minimal infrastructure, doesn't produce a tangible product, and is still groping its way toward a solid monetization strategy. When it comes to advertising, a standard valuation question for a media stock, Facebook is disappointing: As the economic bloviators have endlessly pointed out, the site's advertising revenues are unimpressive. And, to make things worse, there's Facebook's claim that the move to portable devices has made it even harder to create a stable revenue stream.

(Of course, it's almost impossible to find a website with a good advertising-based business model, but those kinds of big-picture, systemic flaws aren't really interesting to the jittery buy/sell crowd that is currently complaining about Facebook.)

When it comes to determining the actual worth of Facebook, value investors will have to focus their attention on two somewhat intangible factors: the website's CEO and its place in the social media market.

The Big Boss

Regarding the first, there are the image problems faced by Mark Zuckerberg himself, a somewhat self-conscious 28-year-old college dropout who has been far from impressive in his few public appearances. The Facebook valuation problems don't seem to have hit him too closely, although his worth -- on paper -- has dropped by $3 billion since Friday. In fact, some finance writers are trying to coin the word "Zucked" to describe a paper billionaire who loses a huge chunk of his supposed wealth. Personally, I prefer "Fulded"; then again, my long-term memory stretches all the way back to 2008.

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But, as any student of Zuckerberg's tenure can attest, the young man in question has a firm vision for the future of Facebook, coupled with a willingness to learn, a strong eye for talent and an iron grip on the wheel. In eight years, he has transformed a college project into a social network that connects more than one-seventh of the world's population. And, when it comes to Facebook's unimpressive revenues, it's worth remembering that "unimpressive" in this context means a mere $1 billion in profit last year.

Regarding the second factor, Facebook's place in the social media market, few analysts noted that, even as GM announced plans to stop paying the site for advertising, it was doubling down on its use of Facebook's fan pages. In fact, counting its distributors, dealers, factories, suppliers, and other associates, GM operates hundreds of fan pages, without paying Facebook a penny.

This factor suggests a clear revenue route to revenue for the site. Facebook currently has over 900 million users, and is on track to hit a billion later this year. Millions of companies, institutions, and artists use the site to create fan pages that they use to connect to customers. In fact, fan pages are on track to become a cottage industry of their own, with an ever-growing cadre of marketers offering to build pages, maintain pages, and advise customers on how to use pages. As yet, Facebook hasn't monetized this feature, but it isn't hard to imagine how they could.

How Much Is It Really Worth (Again)

So, to recap, Facebook's paper value dropped from $104 billion to $93 billion in three days.



This didn't happen because of any major moves on the part of the company and wasn't a response to any big market forces. The site's founder and CEO, the guy who built it and has a vision for its growth, is still in the driver's seat -- what's more, with 57% of the company's voting stock under his control, he isn't going anywhere.

Gallery: 5 Companies Getting Burned By Facebook
Facebook gallery


As for the future, Facebook still has big plans, and now has a very fat war chest that will make some of them possible. Admittedly, it has a somewhat questionable advertising-based revenue stream, but it is sitting on a potential gold mine. In other words, for the long-term investor, it looks like a great deal. The only question now is how much of a drop should we wait for before buying in?



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]]>advertising revenuesAdvertisingRevenuesFacebookFacebook IPOFacebook stock price fallingFacebookIpoFacebookStockPriceFallingFinanceMark ZuckerbergMary SchapiroMorgan Stanley investigationMorganStanleyInvestigationSEC investigationSecInvestigationunderwritersBruce WatsonTue, 22 May 2012 17:24:00 ESTWhy Facebook's Falling Share Price Really Doesn't Matterhttp://www.dailyfinance.com/2012/05/21/why-facebooks-falling-share-price-really-doesnt-matter/http://www.dailyfinance.com/2012/05/21/why-facebooks-falling-share-price-really-doesnt-matter/http://www.dailyfinance.com/2012/05/21/why-facebooks-falling-share-price-really-doesnt-matter/#commentsFiled under: ,

Facebook PriceOn Monday, Facebook's stock fell from its IPO price of $38 to a low of (as of this writing) $33.60.

So what?

As outlets from The Wall Street Journal to MSN breathlessly reported, Facebook's (FB) official value lost about $12 billion over the weekend, and CEO Mark Zuckerberg is now worth about $2 billion less than he was on Friday.

Again, so what?

With investors across the world screeching like drenched cats and headlines questioning whether or not the social network is already headed down the drain, some critics have assumed that Mark Zuckerberg and company are quaking in their boots. However, nobody who actually paid attention to Facebook's statements before the IPO should be surprised by this latest turn. Long-term investors should postpone the worrying until some actual news surfaces; in the meantime, Facebook will sweat off the short-term investors and settle in for the long haul.

As part of his company's IPO, Mark Zuckerberg wrote a letter to potential stockholders, laying out a vision that sounded less like a business proposal and more like a vision for remaking society. In it, he talked about opening up communication, taking big risks, being bold, and maximizing his company's impact. It was an interesting letter, full of exciting ideas, but for short-term investors hoping to make a quick buck, it was missing one key aspect: a promise of huge returns.

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Like most of Zuckerberg's moves, the letter was deliberate and thoughtful. He has made no secret of his lack of interest in selling stock in Facebook; in fact, were it not for SEC rules, chances are that Facebook would still be privately held. And, to be fair, it's easy see why anybody who is interested in the long-term health of a company would want to avoid putting it in stockholders' hands: If the past decade has taught one lesson, it's that the stock market operates on short-term gains and losses, not on far-reaching plans.

And Zuckerberg's plans are nothing if not far-reaching.

Gallery: Facebook - A Timeline

Ultimately, Wall Street's squeals about the price of Facebook stock are largely meaningless. Zuckerberg controls 57% of Facebook's voting power, which means that investors looking for a say in how the company is run might consider applying for a job there -- they're certainly not going to carry a lot of voice at shareholder meetings. But for those who are interested in holding onto the stock for a long time, there isn't any cause for worry: If Zuckerberg's tenure has shown anything, it's that he is a smart, dynamic leader who knows how to make his company grow.

Given its current path, Facebook is poised to remain at the forefront of social media for the foreseeable future. In other words, for those holding a few shares of the stock -- and, better yet, for those who will buy a few shares after the quick sale folk run for the hills -- Zuckerberg and company promise to be a good place to trust their money.

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.

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]]>Buy and HoldBuyAndHoldFacebookfacebook ipoFacebook stock price fallingFacebookIpoFacebookStockPriceFallingFinanceMark Zuckerbergsocial mediasocial networkingSocialMediaSocialNetworkingWall StreetBruce WatsonMon, 21 May 2012 12:49:00 ESTFacebook IPO Valuation Sets Record: Is It Really Worth $104 Billion?http://www.dailyfinance.com/2012/05/17/facebooks-ipo-valuation-sets-record-is-it-really-worth-104-bi/http://www.dailyfinance.com/2012/05/17/facebooks-ipo-valuation-sets-record-is-it-really-worth-104-bi/http://www.dailyfinance.com/2012/05/17/facebooks-ipo-valuation-sets-record-is-it-really-worth-104-bi/#commentsFiled under:

Facebook ipoAs Facebook thunders toward its IPO, the 33 banks tasked with underwriting the offering have been desperately trying to determine how much the social networking website is actually worth. While it is closing in on 900 million users, its rate of growth has slowed and its current advertising model seems to be hitting a snag. Ultimately, the question arises: is Facebook overpriced -- or is it undervalued?

At the IPO price of $38 that was announced Thursday evening, Facebook is priced at the top of the $34-$38 range announced at its filing. That pegs the company's total value at an opening-day record of $104 billion -- and it will have roughly $16 billion more in its coffers come Friday morning. Put another way, Facebook CEO Mark Zuckerberg now has enough cash on hand to buy 16 more Instagrams.

Facebook revenue

But How Much Is It Really Worth?

Even before the stock went on the market, most experts agreed that Facebook was overvalued: As ABC News recently reported, in a survey of 124 portfolio managers and analysts, only 8% said that the stock's value would increase over the next six months.

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At the heart of the stellar valuation lie questions about Facebook's actual ability to make money, an issue that was brought into sharp focus earlier this week when General Motors announced plans to withdraw its $10 million advertising buy from the site. While badly timed for the Facebook crew, this decision wasn't that surprising. As numerous experts -- including our own -- have noted, the click-through rate on Facebook ads averages a dismal 0.051%, or roughly one click per 2,000 viewers. In other words, as dozens of other websites have already discovered, customers respond poorly to online advertising, and prefer to shop via sites they find on their own.


What many observers seem to have missed, however, is that even as it was pulling its Facebook ads, GM was redoubling its use of Facebook itself. Between its various brands, factories, distributorships and dealerships, the company has hundreds, if not thousands, of Facebook fan pages. And, as the automaker announced on Wednesday, it has no intention of abandoning Facebook:

Just wanted to let our millions of Facebook fans know, we're still here, and we 'like' you back! We may not be advertising on Facebook at the moment but we'll still be talking with you all daily. If anything, we will be providing more content across our many GM Facebook pages - including Chevrolet, Buick, GMC and Cadillac - to keep the dialogue going.

For critics of Facebook's current ad strategy, it's worth noting -- as some analysts have argued -- that there is nothing keeping the company from charging corporations to establish pages on the site. At this point, a Facebook presence is a cornerstone of almost any social media strategy, and any company, local business, movie, or band that hopes to reach consumers is pretty much required to create a fan page.

Moving Beyond Ads to a Real Business Model

Charging for corporate pages, while unusual, wouldn't be unprecedented -- in many ways, the strategy would be an online equivalent of the model employed by the phone company. Just as the yellow pages are free to customers but subsidized by paid ads, Facebook would be free to individual users but subsidized by businesses. Indeed, as some Internet marketers have noted, creating engaging and eye-catching Facebook pages is already a lucrative business.


Gallery: 9 Scary Ways Criminals Use Facebook
Facebook


The phone company metaphor also fits in comfortably with Mark Zuckerberg's statements about Facebook. As the founder noted in his IPO prospectus letter, "Facebook was not originally created to be a company ... We don't build services to make money; we make money to build better services." Or, as NYU professor and Microsoft researcher Danah Boyd succinctly put it, "From day one, Mark Zuckerberg wanted Facebook to become a social utility. He succeeded. Facebook is now a utility for many." Perhaps the model for Facebook's valuation shouldn't be Yelp or Groupon, but rather AT&T or Con Edison.

Although Facebook hasn't announced any plans to charge for its fan pages, it is in a unique position to monetize social media. If -- when -- it chooses to charge for access to its hundreds of millions of users, questions about the site's financial position will be rendered completely moot.

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.


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]]>charging for fan pagesChargingForFanPagesFacebookfacebook adsFacebook fansFacebook IPO valuationFacebookAdsFacebookIpoValuationFinanceGrouponMark Zuckerbergrecord IPORecordIposocial mediasocial networkingSocialMediaSocialNetworkingBruce WatsonThu, 17 May 2012 17:00:00 ESTMoney Where Your Mouth Is: Economist Explains Why We Eat Like We Dohttp://www.dailyfinance.com/2012/05/17/food-money-tyler-cowan-economist-book-lunch/http://www.dailyfinance.com/2012/05/17/food-money-tyler-cowan-economist-book-lunch/http://www.dailyfinance.com/2012/05/17/food-money-tyler-cowan-economist-book-lunch/#commentsFiled under: , ,

Empty plate of foodWith obesity and diabetes at epidemic levels, the experts agree that America's diet is in serious need of reform. Even so, there are times when food criticism seems to wander away from the realm of reasoned analysis in the direction of religion. With reformers such as Morgan Spurlock and Michael Pollan preaching about the morality of high fructose corn syrup and organic produce, it can sometimes seem like American cuisine is caught in a battle between good and evil -- and your plate is the OK Corral.

Economist Tyler Cowan sees it differently.

In An Economist Gets Lunch, his analysis of food, farms, and restaurants, he argues that the real story of American cuisine bears little resemblance to the tales told by Spurlock, Pollan and their fellow travelers. From Cowan's perspective, America's culinary problems date back much further, and the solutions may be as near as your local Chinese restaurant.

And the Real Villain Is ...

Most experts blame factory farming and mass production for the downfall of American cuisine, arguing that the availability of cheap, plentiful ingredients translated into blandness. No surprise, the contrarian Cowan offers up a few alternate food villains. He starts by blaming Prohibition.

As he points out, in the 1920s, the country's finest restaurants used alcohol sales to subsidize the prices of their food, and their French-trained chefs often cooked with wine. When America banned alcohol, it effectively destroyed their business model and robbed them of one of their primary ingredients. And while 1933s repeal got the liquor flowing again, it didn't heal the economic damage: It took about 40 years for U.S. alcohol consumption to return to its pre-Prohibition levels.

Cowan also places blame on another unusual set of suspects: our children. His findings suggest that a rising desire to produce convenient food for the entire family meant that parents and restaurants had to adapt by finding ways to tantalize kids' bland, sugar-centric tastes. Add these two factors together with a post-World War II food-packaging push, and you get McDonald's burgers and Stouffer's mac and cheese -- foods that please the kiddies, but not a sophisticated palate.

Using Economics to Pick a Restaurant

So economics changed the American diet back then. But how is it continuing to affect what arrives on today's tables? To explore this question, Cowan begins by showing how even the simple act of picking a restaurant can involve one in a rich web of economic practices.

In his view, the first step toward finding a good restaurant lies in finding good guides -- a group of people who know the area, eat out regularly, and are also "prosperous or middle class but not necessarily rich." His top choices include taxi drivers, firemen, textbook salespeople, and -- generally -- people aged 35 to 55. They have a fair bit of experience, aren't too set in their ways, can afford to eat out regularly, and are interested in getting the most for their money.



But picking a local expert isn't the only route to finding a great restaurant. Even in the absence of friendly taxi drivers and firemen, Cowan says, there are a few hints that one can follow. Not surprisingly, many of these are tied to sound economic practices.

To begin with, he notes, price is often tied to location, a point that he illustrates by pointing that all four of New York's top restaurants are located "in a thin strip of midtown Manhattan." Avoid those high-rent neighborhoods, he suggests: The best deals are found in "low-rent areas near higher-rent customers." Restaurants that take advantage of less expensive spaces -- back streets, suburban strip malls and even food trucks -- can transfer the savings onto their prices and still spend more on better ingredients, which translates into better food at lower cost.

Looking for Family-Run Restaurants With Grim Patrons

Beyond rent, Cowan says, labor is one of the most important factors in food cost, and that's reduced in family-owned restaurants, where family members may work in the kitchen or wait tables for free or at below-market rates. With a lower tab for wages, restaurants can afford to drop prices, which -- he claims -- is why "family-owned, family-run Asian restaurants ... tend to offer good food buys."

Another consideration is competition, which, Cowan argues, helps keep prices down and quality up. As he puts it, "A town that has only a single Indian restaurant probably does not have a very good Indian restaurant."

Gallery: 5 Foodie Sites That Can Find You Fine Meals for Less
gallery

Perhaps his most important observation, however, is that many restaurants aren't primarily in the food business. Just as in those long-ago pre-Prohibition days, many eateries today derive the majority of their income from alcohol sales. Recognizing the power of this sort of cross-subsidy, Cowan notes, can help you pick the best places to eat.

Another tip: "When I'm out looking for food, one of my fears is to come across a restaurant where the people are laughing and smiling and appearing very sociable," he says. "I also start to worry if the women in a restaurant seem to be beautiful in the trendy 'eye candy' sense."

The reason, he explains, is that restaurants that attract a hip, singles crowd tend to be focus on ambiance, style and selling drinks, rather than putting good, economical food on the table. In fact, he suggests, "It is often best when the people in a restaurant look a little serious or even downright grim."

Economics is often referred to as "the dismal science," a depressing mode of analysis that uses dull equations and fusty formulas to suck all the joy and life out of the world that it purports to explain. And, to be fair, much of Cowan's book is taken up with long, dull diversions into his barbecue-eating experience and the layout of his local Chinese market. Yet for anyone in search of an interesting take on the intersection of the national economy and the average person's wallet, Tyler Cowan -- and his analysis of food -- are a good place to start.

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.

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]]>An Economist Gets LunchAnEconomistGetsLunchbook reviewBookReviewBruce Watsonfood and drinkFoodAndDrinkfoodieshealthy good foodHealthyGoodFoodhow to find a good restaurantHowToFindAGoodRestaurantIndian cuisineMichael PollanMorgan Spurlockobesity in AmericaObesityInAmericaorganic foodsOrganicFoodsProhibitionStouffer'sTwitterTyler CowenBruce WatsonThu, 17 May 2012 15:20:00 ESTFor Mother's Day, Protect the Family Jewelshttp://www.dailyfinance.com/2012/05/10/mothers-day-protect-the-family-jewels/http://www.dailyfinance.com/2012/05/10/mothers-day-protect-the-family-jewels/http://www.dailyfinance.com/2012/05/10/mothers-day-protect-the-family-jewels/#commentsFiled under:

Mother's dayMother's Day is nearly here, bringing with it piles of flowers, an avalanche of candy, and a big boost for the nation's brunch industry. But, while the classic Mother's Day gifts are great, Sunday might also be a good day to think about taking better care of the presents that mom has already received.

Motherhood and jewelry do tend to go together: For many moms, engagement rings and push gifts are among the most valuable jewelry they own. But while these baubles are wonderful remembrances of some of life's most meaningful moments, they can also be worrisome possessions -- small and extremely valuable, they often fall down drains, get left behind, or are snatched by thieves.

What Insurance Covers -- and What It Doesn't

Most homeowners insurance policies offer limited coverage for jewelry. But, according to Richard Standring, regional manager for Fireman's Fund insurance company, "scheduling" a piece of jewelry -- specifically listing it on an insurance policy -- can provide extra protection. "You have to pay an additional premium," he notes, "but there is no deductible, and the coverage is more extensive than that of a normal home insurance policy."

In addition to helping when jewelry is stolen, scheduling also makes things easier when jewelry is lost. "Many insurance claims come under the heading of 'mysterious disappearance,' which aren't covered under standard homeowner policies," Standring explains. "The back falls off an earring, the clasp breaks on a necklace, or a ring is left behind in bathroom. Sometimes, the setting of a diamond ring fails, and the diamond falls off -- taking with it most of the value of the ring." Under these circumstances, scheduled jewelry would be replaced, while unscheduled jewelry would be a total loss.

Don't Know What You Got 'Till It's Gone

Even if Mom isn't interested in scheduling her jewelry, it's still a good idea to get it appraised and inspected. Standring suggests getting jewelry evaluated by a qualified appraiser every 3 to 5 years: "Precious metals, especially gold, are very volatile, and their prices change constantly." For example, a one-ounce gold chain would have cost just under $700 in 2007, but would go for over $1,500 -- more than double -- today.

For vintage jewelry, Standring points out, volatility is an even bigger issue. "Pieces often qualify as fine art, which means that the price may change even more quickly."

It's also a good idea to regularly inspect jewelry. Checking backings and settings can help ensure that necklaces won't fall off or jewels won't fall out. Many jewelers will perform cleanings, inspections, and basic repairs for only a small fee.


Keeping Safe

Another danger of jewelry is that it tends to be remarkably easy for thieves to find. Most baubles end up in jewelry boxes, dresser drawers or closets. Even a basic safe can provide a much higher level of security and, Standring notes, cut the price of your insurance premiums. "Depending on the size of your jewelry collection, it can pay for itself in as little as five years."

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Most safes are installed in bedroom closets. Picking a less obvious place -- like the furnace room, the mechanical room, the attic or the kitchen -- can give an added level of security, as thieves are less likely to search for jewelry outside of the bedroom.

If mom isn't interested in getting a safe, it's still possible to increase the security of her jewelry without spending a fortune. Standring notes that, while they won't qualify for a discount on insurance, old-fashioned hiding places like hollow books or false cans of soup can provide a level of protection from thieves. Best of all, many of these options cost less than $20. In other words, for less than the price of brunch, you might be able to buy your mom peace of mind -- and a Mother's Day gift that she can use all year.

Gallery: The Most Useful Things the World Does With Gold
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Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.

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]]>Bruce WatsonFireman's Fund Insurance Companyhome safehomeowners insuranceHomeownersInsuranceHomeSafeinsurance ridersInsuranceRidersinsuring jewerlyInsuringJewerlyjewelry appraisalJewelryAppraisalTwitterunusual mothers day giftsUnusualMothersDayGiftswhat does homeowners insurance coverWhatDoesHomeownersInsuranceCoverBruce WatsonThu, 10 May 2012 12:55:00 ESTForget Fountain Pens: 5 Gifts New College Grads Can Really Usehttp://www.dailyfinance.com/2012/05/10/college-graduation-gifts-grads-can-really-use/http://www.dailyfinance.com/2012/05/10/college-graduation-gifts-grads-can-really-use/http://www.dailyfinance.com/2012/05/10/college-graduation-gifts-grads-can-really-use/#commentsFiled under: ,

Graduation giftsThe classic graduation gifts -- fountain pens, desk sets and copies of Oh, The Places You'll Go! -- are perfect if your favorite grad is headed for an artist's colony or off on a vacation. For that matter, the designer tool kits and retro luggage that were enthusiastically embraced by the readers of HuffPo College are great, but won't ease the path from the dorm room to the board room.

For most grads, though, life after college isn't going to provide lots of leisure for contemplation or cruises. With half of recent graduates out of work and student debt shooting through the roof, our young friends will need to hit the ground running, so the best gifts are ones that will help put them on the fast track to a job.

With that in mind, here are five of our favorite presents for the young grad on the go. And, hey, if the recipient gets hired, you can still buy them retro luggage for their first vacation!

Gallery: The World Beyond Fountain Pens: Grad Gifts

An Interview Suit:A Great Résumé:A Magazine or Newspaper Subscription:Classes:A Grown-Up Backpack:



Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.

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]]>briefcaseBruce Watsoncollege graduation giftsCollegeGraduationGiftscontinuing educationContinuingEducationEntertainmentfind a jobFindAJobgifts for gradsGiftsForGradsinterview suitInterviewSuitJanSportJC Penney Co Incjob huntingJobHuntingJoS. A. Bank Clothiersmagazinesmessenger bagMessengerBagnewspaperprofessional classesProfessionalClassesresume servicesresume tipsResumeServicesResumeTipsTwitterBruce WatsonThu, 10 May 2012 05:30:00 ESTThe 5 Best Bourbon Buys for Kentucky Derby Dayhttp://www.dailyfinance.com/2012/05/04/best-bourbon-buys-kentucky-derby-day-mint-julep/http://www.dailyfinance.com/2012/05/04/best-bourbon-buys-kentucky-derby-day-mint-julep/http://www.dailyfinance.com/2012/05/04/best-bourbon-buys-kentucky-derby-day-mint-julep/#commentsFiled under: ,

mint julepKentucky Derby weekend is coming, bringing bourbon-fueled parties and a renewed interest in one of America's most famous cocktails, the mint julep.

While many julep lovers will be diving for their high-priced "small batch," "single barrel" and "heritage" bourbons, the truth is that this is one drink where expensive bourbon definitely takes a back seat to lower-shelf brands. After all, the South's favorite cocktail carries a hefty dose of mint and sugar, and is cooled with a lot of ice, a recipe guaranteed to leave even the most rugged bourbon struggling to keep its identity. As for all those delicate hints of "raisins" and "creme brulee" that higher-priced bourbons allegedly carry -- well, they tend to disappear when mixed with anything stronger than water.

And there's an added plus to trolling the bottom shelf for your Kentucky Derby whiskey: Less expensive bourbons tend to carry a wealth of tradition. In fact, the five spirits that we've profiled below -- all of which cost less than $20 a bottle -- are rich with legend, and loaded with wonderful tales that you can relate while sipping your cool cocktail and watching the ponies!

Gallery: Five Spirits Best for Mint Juleps

The Crowd Favorite: Evan WilliamsIn Good Company: Old Grand-DadBourbon for Outlaws: Rebel YellPretender to the Throne: Early TimesSouthern Partnership: Virginia Gentleman


Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.

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]]>bourbonBruce Watsonearly timesEarlyTimesevan williamsEvanWilliamsKentucky Derbylow pricesLowPricesmint julepmint julep recipesMintJulepMintJulepRecipesOld Grand-dadOldGrand-dadrebel yellRebelYellsaving moneySavingMoneyTwittervirginia gentlemanVirginiaGentlemanBruce WatsonFri, 04 May 2012 16:05:00 ESTBaby Boomers' Money Troubles: They're Worse Than We Thoughthttp://www.dailyfinance.com/2012/05/02/baby-boomers-money-troubles-theyre-worse-than-we-thought/http://www.dailyfinance.com/2012/05/02/baby-boomers-money-troubles-theyre-worse-than-we-thought/http://www.dailyfinance.com/2012/05/02/baby-boomers-money-troubles-theyre-worse-than-we-thought/#commentsFiled under:

Baby BoomersOver the past few years, high unemployment, the housing market implosion and falling wages have driven many American families closer together -- both financially and literally. Parents are supporting their adult children, children are supporting parents, and generations are helping each other to weather the economic storms.

In some ways, that's heartwarming, but according to a recent study, the rising trend of inter-generational support has hit baby boomers particularly hard. They're caught between financially-strapped elderly parents who can no longer work, and adult children who can't find work.

In 2007, Ameriprise, a leading financial services company, conducted a cross-generational survey of economic perceptions: Money Across Generations. Late last year, it followed up with Money Across Generations II. Taken together, the two surveys reveal a great deal about how perceptions of wealth have changed in the four years since the Great Recession reshaped America's economic landscape.

According to Ameriprise, five years ago, 44% of baby boomers claimed that they were "trying to grow their savings." Today, that number has almost been cut in half: Only 24% of boomers are putting money aside for their old age. The same percentage are "simply trying to maintain what they have."

Even that modest goal has become rather difficult. On paper, boomers should occupy a sweet spot in America's economic structure. Well-established in their professions, they should be protected from low-level layoffs, yet should be young enough not to be suffering from heavy health care expenses.



The reality is much more complex. Many boomers lost their jobs in the massive layoffs of 2008 and 2009, and even those who didn't have been impacted by family members' financial woes. On one end of the spectrum, most boomers have stepped in to help their parents deal with money issues, often linked to health care costs. According to Money Across Generations II, 58% of boomers claim to have financially assisted their elderly parents: 22% reported that they've helped their parents purchase groceries, 15% have helped pay for medical bills, and 14% have helped out with utility bills.

On the other side, the majority of boomers have also been providing a financial lifeline for their offspring. More than half of boomer survey respondents have let their kids move back home and live rent free, and 93% have given their children some form of financial support.

Gallery: The Big Retirement Myth: You'll Spend Less
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All of this cross-generational support has come with a significant economic and emotional cost. One in 10 boomers surveyed claimed that helping their parents has "slowed down" their retirement savings; when it comes to their adult children, 34% say the same. And, as boomers have increasingly helped their families through the economic downturn, their perceptions of their own economic viability have slipped. In 2007, 51% of boomers reported being "very confident" of their ability to assure a "financially secure life" for themselves and their children. By 2011, that number had fallen to 33%. When it comes to their ability to care for their parents, boomer perceptions have had a similar downturn: In 2007, 33% were very confident of their ability to secure a financially secure life for their parents. Four years later, that number had dwindled to 19%.

For boomers, the recession could have devastating long-term effects. As the economy picks up, younger workers will likely find work, and many will be able to get their savings and retirement plans back on track. Their boomer parents, though, many of whom are on the final approach to retirement, may find that supporting parents and children has halted their retirement planning, depleted their savings accounts, or both. Cash-strapped thanks to their generosity, they may find themselves delaying retirement, and when they do stop working, their golden years may be a bit more tarnished.

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.

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]]>adult children moving inAdultChildrenMovingInAmeripriseAmeriprise Financialbaby boomersBabyBoomersBruce Watsondelaying retirementDelayingRetirementFinanceGreat RecessionHealthMoney Across Generations IIMoneyAcrossGenerationsIiretirement planningRetirementPlanningsandwich generationSandwichGenerationsupporting parentsSupportingParentsTwitterBruce WatsonWed, 02 May 2012 10:50:00 ESTStudent Loan, Meet Social Security: Seniors Still Stuck with School Debthttp://www.dailyfinance.com/2012/05/01/student-loans-meet-social-security-seniors-stuck-school-debt/http://www.dailyfinance.com/2012/05/01/student-loans-meet-social-security-seniors-stuck-school-debt/http://www.dailyfinance.com/2012/05/01/student-loans-meet-social-security-seniors-stuck-school-debt/#commentsFiled under:

Student DebtThe rising student debt crisis is hardly news: With hiring slow and tuitions high, the financial outlook has been bleak for many young college grads for quite a while. But according to some analysts, the college loan crisis has moved well beyond fresh-faced Gen Y'ers. Now, an older cadre is finding itself buried under the weight of unserviceable loans.

And, unlike college grads in their twenties, these older borrowers don't have a lifetime to pay off their debt; in fact, as recent stories have shown, a growing number of borrowers are facing garnishment of their Social Security checks to pay tuition debts that are decades old.

The idea that Social Security benefits could be seized to pay for student loan debt seems laughable, but the Debt Collection Improvement Act of 1996 made it possible. Social Security beneficiaries receive a $750 cushion, but up to 15% of funds above that line can be seized to pay down debts, including student loans. What's more, student loan debt has no expiration date and can't be discharged in bankruptcy, which means that graduates could, conceivably, have their retirement funds raided decades after they left school.

Of course, most student loans are paid off long before the recipient reaches old age. However, a recent report by the Federal Reserve Bank of New York stated that almost a third of student loan debt is held by people aged 40 and over, and 4.2% -- roughly $42 billion -- is held by people over the age of 60. Some of this loan debt is the result of cosigning -- grandparents or other elder relatives helping family members borrow for college. But many loans were taken directly by this older students, a result of our nation's long-term employment problems. Thanks to the downturn, large numbers of older students have returned to school in search of degrees and certifications to help them escape the bleaker corners of today's job market.

Gallery: Private Colleges With the Lowest Student Graduating Debt
Lowest debt colleges GALLERY


In the wake of the Great Recession, the problem has grown. As Reuters' Mitch Lipka recently reported, student loan debt among students aged 35 to 49 increased by 47% over the last three years, making them the fastest-growing group of borrowers. And with the average loan burden increasing from $9,000 to $12,000, this group is, effectively, playing a high-stakes game of roulette, betting that their wages will grow significantly before they hit retirement.

One thing that could help keep student loan debt somewhat more manageable is the extension on the 3.4% Stafford loan rate, a proposal supported by both President Obama and his Republican challenger Mitt Romney. However, opponents -- including Senate Republican leader Mitch McConnell -- have questioned how the proposed low rate would be funded. McConnell, in fact, argued that any extension of the low Stafford rate would be funded "by raiding Social Security and Medicare," a charge that would apparently leave elderly borrowers between a rock and a hard place. Most legislators, however, agree that McConnell's claim is false.

There are several proposals afoot to get student loan debt under control, but in the current political climate, it appears that there's no solution in sight. Meanwhile, student borrowers, both young and old, continue putting their money on the education roulette wheel, hoping that their winning number will come up.



Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.

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]]>Barack Obamacollege loansCollegeLoanscontinuing educationContinuingEducationelderlyFinanceGreat Recessionlilfelong learningLilfelongLearningMitch McConnellMitt Romneynontraditional studentsNontraditionalStudentsolder studentsOlderStudentsSenior CitizensSeniorCitizensSocial Securitysocial security garnishedSocialSecurityGarnishedStafford Loanstudent debt crisisStudent LoansStudentDebtCrisisStudentLoansBruce WatsonTue, 01 May 2012 14:27:00 ESTMy Doomed Romance with T-Mobilehttp://www.dailyfinance.com/2012/04/27/my-doomed-romance-with-t-mobile/http://www.dailyfinance.com/2012/04/27/my-doomed-romance-with-t-mobile/http://www.dailyfinance.com/2012/04/27/my-doomed-romance-with-t-mobile/#commentsFiled under: , , ,

T-MobileAs the old song says, breaking up is hard to do. I thought that I was long past the time when breakups were a concern, but -- as I learned recently -- you're never too old to have your heart torn to pieces. Last month, I ended one of my longest relationships when I broke up with T-Mobile.

We've been together for a while, T-Mobile and I. We started dating back in the early 2000s: I was coming off an bad relationship with Sprint (S), which was doing me wrong with the raising prices/lowering quality two-step, and T-Mobile was on the market, aggressively trolling for new customers. When Sprint refused to replace a malfunctioning phone despite the expensive insurance policy that they had convinced me to purchase, I decided that our relationship had passed from neglectful to actively abusive. It was time to pull the plug.

I Just Called to Say I Love You

I had been eyeing T-Mobile for a while. Long before we began our courtship, I asked around and found that, despite a few rough edges, the company had a reputation for treating its customers well. Even better, its "Five Faves" promotion, which promised me unlimited free phone calls to my five favorite people, seemed too good to pass up. With Sprint passing into the rear-view, my decision was easy, and I joined up with T-Mobile.

Things weren't always smooth. Unlike some of the brighter, flashier companies, T-Mobile had limited coverage, and I soon learned that there were places in town where phone calls were impossible. Even so, I loved my new cell provider, warts and all. I got used to the occasional dropped call and rejoiced whenever the company managed to fill in yet another spot in its coverage.

As time went on, things just kept getting better; by the mid-2000s, T-Mobile and I were almost inseparable. When my girlfriend moved in, she joined my account; later, when my sister got tired of her abusive provider, we added her to the plan. She, like my now-wife and me, became a staunch T-Mobile fan.

Stand By Your Cell Provider

And T-Mobile stuck with us through thick and thin. When my sister was hospitalized with a life-threatening illness, we suddenly found ourselves constantly on the phone with friends, relatives and doctors. Facing a shocking $400 monthly bill, we called T-Mobile, which agreed to retroactively change our plan so that we weren't hit with tons of charges that we couldn't afford. Over the following months, as my sister moved in and out of the hospital, T-Mobile kept pace with our needs, shifting our plans and letting us add and remove our "faves" in order to keep our bills under control. Even in the toughest times, we knew that we could rely on them.

t-mobile

By now, my wife, my sister and I were all living in New York. T-Mobile still had its rough spots: Even in the city, there were places where our phones cut out, and we had to deal with the occasional dropped call. But with great customer service and reasonable prices, T-Mobile kept our relationship strong, and we were quick to tell our friends about how much we loved the cell company.

T-Mobile's Cheatin' Heart

But there were dark clouds on the horizon. In late March 2011, AT&T (T) announced plans to buy T-Mobile for $39 billion, a plan that would have made AT&T the biggest telecom provider in the United States. For us, this seemed like a mixed blessing: on the bright side, my wife had been eying iPhones for a while, but the fact that we weren't with AT&T had made using the sweet little gadgets an impossibility. Then again, we were pretty happy with our Android phones, and trading in T-Mobile's low prices and great customer service for one of Steve Jobs' slick beauties didn't seem like a great deal. When AT&T abandoned the plan in December 2011, we breathed a sigh of relief.

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While the merger didn't go through, T-Mobile was still headed south. We had always prized their great customer service, particularly the ability to quickly get hold of a human being. But last fall, my wife called the company to ask about some plan changes, only to get dumped into an automated-calling maze that left her on the phone for an eternity before she gave up. Later, I discovered that T-Mobile had sharply cut staffing at many of its call centers and, in July 2011, closed off the option that made it possible for customers to directly contact an actual person.

Before this move, T-Mobile had the top-rated customer service in the business, but by summer 2011, it had dropped behind Verizon (VZ). And while the service went down, the prices crept up, as T-Mobile began charging more for our data plan. Needless to say, any attempts to discuss this with a human resulted in long waits and disappointment. This March, the company doubled down on its high price/low service plan with a decision to layoff 1,900 customer service employees while further raising prices for data. After a long, tough talk, my wife and I decided that the time had come to say goodbye to T-Mobile.

Here's a Quarter, Call Someone Who Cares

Since the breakup, we've moved on to Verizon. While my wife and I don't feel the same passion for our new cell provider, we've been pleased with Verizon's faster data downloads and slightly cheaper prices. The customer service is a lot better, and we also have a lot fewer dropped calls. My sister and her husband have also made the jump, and are also happy with their new provider.

Meanwhile, T-Mobile seems to be sticking with its decision to raise prices and decrease its workforce. They hit us with one last bill, a whopper that included all sorts of little fees and fines, some of which seemed questionable. When we got it, my wife and I talked for a couple of minutes about calling the company, arguing about the charges, and trying to get the price knocked down. Then we thought about spending an hour on the line, trying to get through to a human.

We decided to write the check and move on.

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.


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]]>AndroidATTbest cell phonesBestCellPhonesBruce WatsonCell phone providersCellPhoneProvidersSci/TechSteve JobsT-MobileTwitterVerizonVerizon Communications IncBruce WatsonFri, 27 Apr 2012 17:00:00 ESTHow Cuts to State Taxes Could Hit Voters in the Wallethttp://www.dailyfinance.com/2012/04/27/how-cuts-to-state-taxes-could-hit-voters-in-the-wallet/http://www.dailyfinance.com/2012/04/27/how-cuts-to-state-taxes-could-hit-voters-in-the-wallet/http://www.dailyfinance.com/2012/04/27/how-cuts-to-state-taxes-could-hit-voters-in-the-wallet/#commentsFiled under:

Wallet poorNobody likes to give money to the government, and with bank accounts across the country still smarting from tax season, it seems like a great time to take aim at the tax structure. At least, that appears to be the case in several states that are currently weighing plans to phase out state income tax.

Proponents claim that these proposals will help ease the tax burden on working families but won't translate into significant cuts in services. However, the aftermath of similar policies in other states suggests that the current push to slash taxes may carry a very high price for some of the country's poorest citizens.


Cutting One Revenue Stream ... And Opening Another

In Oklahoma, one state that is currently considering ways to cut its tax burden, the legislature has already passed four separate proposals that call for a total phaseout of the state income tax system. But while the state's politicians agree that taxes need to be abolished, they've had a much harder time deciding on ways to replace the revenue stream. The most popular route is cutting out loopholes in the state tax code, but heavy lobbying from special-interest groups -- particularly senior citizens, retirees and veterans -- have made it clear that closing many of the biggest tax breaks is a non-starter. Not surprisingly, these three groups are also among the strongest voting blocs.

Oklahoma's legislators are gambling that cuts in the state income tax will lead to massive increases in economic growth, as companies would presumably choose to relocate to the state in order to take advantage of tax breaks. With that in mind, a few of the proposals outline plans to phase-in tax cuts slowly, contingent on their success in building up business. For example, House Bill 1571 calls for a 0.25% drop in the tax rate for every 5% of growth in state revenue.

Cutting Taxes ... But Not Services

Tax-slashing proponents have justified their plans with a populist appeal: Most claim that the state's "core services" won't be cut, and that the proposals will give extra money to working families. But even some advocates admit that the tax plans will come with a cost. Sen. Clark Jolley, the author of one plan, notes that his bill is not "revenue neutral": "Let's be very clear. Oklahoma will have less money to operate if this goes into effect." The Republican lawmaker's opponents, in turn, have argued that the lowered revenue stream will translate into cuts in health, education and transportation spending -- programs that directly benefit many of the state's poorer citizens.

But even if services aren't cut, there's a good chance that slashing the state income tax will push a larger share of Oklahoma's revenue burden onto the backs of its poorest workers. In a recent study, the Corporation for Enterprise Development compared the percentage of income that the poorest 20% and richest 1% pay in state income taxes. The nine states that don't impose income taxes -- Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming -- topped the list when it came to soaking the poor.

Gallery: Widespread Debt: This Is Only The Beginning.
Widespread debt

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The reason for this is pretty simple: When states cut income tax, they generally make up the difference with hikes in their property and sales taxes. As poorer families tend to spend a larger percentage of their income on necessities, increased sales taxes effectively translate into a straight tax increase for them. By comparison, richer families that are able to save part of their monthly income get a break.

With national Republicans blazing a trail for cutting social services and raising taxes on the poor, it's hardly surprising that many state politicians are following the same playbook. However, as unemployment remains high and average wages stay low, it's increasingly clear that these budget cuts may come with a dangerous price tag.

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.

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]]>government servicesGovernmentServicesincome taxIncomeTaxsales taxSalesTaxstate income taxesstate sales taxstate taxesStateIncomeTaxesStateSalesTaxStateTaxestaxesBruce WatsonFri, 27 Apr 2012 14:15:00 ESTChoosing a College: Which Schools Offer the Best ROI?http://www.dailyfinance.com/2012/04/26/choosing-a-college-which-schools-offer-the-best-return-on-inves/http://www.dailyfinance.com/2012/04/26/choosing-a-college-which-schools-offer-the-best-return-on-inves/http://www.dailyfinance.com/2012/04/26/choosing-a-college-which-schools-offer-the-best-return-on-inves/#commentsFiled under:

Paying for CollegeEarlier this week, President Obama weighed in on college loan debt, telling students at the University of North Carolina, Chapel Hill that he and his wife had only finished paying off their loans "eight years ago." Put another way, the Obamas -- a pair of highly-educated lawyers with high-profile, high-paying jobs -- were still working on their student loan debt when he was 43 years old and his wife was 40.

As the president's experience demonstrates, the classic perception of a college degree as a solid investment that will quickly pay for itself is starting to come under fire. Rather than offering a ticket to a stable, high-paying job in return for a few thousand dollars worth of loans, today's educational model is, all too often, offering students little more than a ticket to underpaying jobs, coupled with a near-insurmountable debt load that, for many, will take a lifetime to pay off. As the President has noted, the anticipated rise in Stafford student loan interest rates -- they're slated to increase to 6.8% this year -- will only make things harder on students.

Weighing Options

Not surprisingly, collegians are having to become more thoughtful, careful consumers. As we've noted in the past, there are several ways to improve the return on a college education -- between taking community college courses, comparing the financial viability of various majors, carefully weighing graduate school choices, and exploring creative scholarship options, it's possible to keep tuition costs down while maximizing a post-college paycheck. But for many students, there is still one major question to consider: How much does college choice translate into earnings potential? Or, to put it another way, can post-graduation earnings justify the $40,000 yearly cost of a Harvard education?

PayScale, an online salary, benefits and compensation information company, may have found an answer. The site just released its 2012 ROI Rankings, a comparison of the average return on investment for over 1,200 American colleges and universities. Pairing tuition and student aid information from colleges and universities with self-reported data from graduates, the site compares the likely cost of an education with the likely return.

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Some of PayScale's findings are surprising. For example, it shows that Ivy League schools, which are generally regarded as the gold standard of college investments, don't top the list of best deals. In fact, the top four schools are Harvey Mudd, Caltech, MIT, and Stanford, all of which have an average 30-year net income of $1.1 million or more. Looking solely at net return on investment -- basically, the amount of money that a graduate will earn over 30 years -- PayScale's analysis suggests that private schools are by far the best choice. In fact, taken from this perspective, only three public schools crack the top 20.

Best Return on Investment

But net return on investment might not be the best measure of a college's profitability. After all, while Cornell, an Ivy League school, has an average ROI of $857,500 in salary over 30 years, its steep $209,600 price tag means that its actual profitability is fairly low. In fact, if one compares tuition cost to salary return, public schools quickly soar to the top of the list: the Georgia Institute of Technology, the Colorado School of Mines, the State University of New York's Maritime College and the University of Virginia take top honors with a yearly return on investment of 11.4% or more. Meanwhile, Princeton, the highest-ranked Ivy League, tumbles to number 17 on the list with a yearly ROI of only 10.6%.

Granted, college choice is only one of many factors that determine how profitable a degree will be. But for parents and students who are trying to decide whether to take out tens of thousands of dollars in loans to pay for a Harvard degree, the fact that the school's average yearly return on investment barely tops 10% may make the decision a lot easier -- especially if they're looking at making 20 years of loan payments at interest rates of close to 7%.

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.

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]]>best collegesBestCollegeschoosing a collegeChoosingACollegecollegecollege loancollege loansCollegeLoanCollegeLoansPaying for collegePayingForCollegereturn on investmentReturnOnInvestmentstudent loanStudent LoansStudentLoanStudentLoansBruce WatsonThu, 26 Apr 2012 16:15:00 ESTRussian Billionaires vs. American Billionaires: Who's Best at Excess?http://www.dailyfinance.com/2012/04/26/russian-billionaires-vs-american-billionaires-whos-best-at-ex/http://www.dailyfinance.com/2012/04/26/russian-billionaires-vs-american-billionaires-whos-best-at-ex/http://www.dailyfinance.com/2012/04/26/russian-billionaires-vs-american-billionaires-whos-best-at-ex/#commentsFiled under: ,

BillionairesIn the late 1980's, the Great Recession was far in the future, Gordon Gekko was in theaters, and Wall Street's movers and shakers were some of America's greatest heroes. Meanwhile, on the other side of the world, the Soviet Union was a grim, cold wasteland filled with long lines and cabbage-based cuisine. Everybody wanted to be in finance and nobody wanted to be in Moscow.

What a difference a few decades make.

Today, things seem to be flipping. Spearheaded by John Thain, Dick Fuld and Angelo Mozilo, Wall Street's money men have become America's go-to villains, while Russia's crop of ambitious young billionaires have captured the public's imagination -- and some of the world's most coveted trophies.

But how do Russia's billionaires stack up against America's home grown oligarchs? To find out, we took a peek at some of the richest men in the world -- on both sides of the Arctic Ocean.

Gallery: Russian Billionaires Versus American Billionaires: The Showdown!

Apartments...Apartments...And Houses...And Houses...Yachts...


Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.

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]]>american billionairesAmericanBillionairesbillionairesDavid GeffenDavidGeffenDick FuldDickFuldDmitry RybolovlevDmitryRybolovlevDonald TrumpDonaldTrumpEkaterina RybolovlevaEkaterinaRybolovlevaIra RennertIraRennertKock BrothersKockBrothersLarry EllisonLarryEllisonMikhail ProkharovMikhailProkharovPaul AllenPaulAllenRinat AkhmetovRinatAkhmetovRoman AbramovichRomanAbramovichRussian oligarchRussianOligarchVladimir PutinVladimirPutinVladislav DoroninVladislavDoroninYuri MilnerYuriMilnerBruce WatsonThu, 26 Apr 2012 01:00:00 ESTBank Accounts Hacked: Is Your Money in Danger at Chase?http://www.dailyfinance.com/2012/04/23/bank-accounts-hacked-chase-global-payments/http://www.dailyfinance.com/2012/04/23/bank-accounts-hacked-chase-global-payments/http://www.dailyfinance.com/2012/04/23/bank-accounts-hacked-chase-global-payments/#commentsFiled under: , , ,

Chase BankStanding next to the ATM on Tuesday, I stared at the receipt in my hand and tried to make the numbers add up. My wife and I had both been paid only a few days before, but our bank account now had less than $200 in it. Since we share our expenses, we each sometimes discover little surprises when she pays for a car repair or I cover a veterinary bill, but this was a big surprise -- and not a pleasant one.

When I got to the office, I looked up my account and quickly discovered the culprit: three charges totaling more than $1,800. I called my wife to make sure that she hadn't recently decided to buy a new Bose stereo system or made several hundred dollars in pharmacy purchases. A few minutes later, she was walking into the office of our local Chase Bank (JPM) to talk to a human being about our almost-empty account. She had barely explained our situation before he burst out "Wow, I've had, like six people in this morning with the same problem!"

An Office Full of Victims

Six people in a single morning seemed a bit high for one teller, but when I started talking to my coworkers, I discovered that I wasn't even the only one in my office who had recently had his account hacked. My coworkers Ken and Ryan had both recently found a bunch of confusing charges on their Chase accounts, and 10 other office mates whom I didn't know had had their accounts breached within the last few months. As I widened my search, I found dozens of people who'd recently had their information compromised. An alarming number were Chase customers.

Was this a crime wave? The Chase representative I talked to refused to comment on whether or not the company was experiencing an uptick in breaches, but John Zurawski, a vice president at an online security firm Authentify, was able to give me a clearer picture. This isn't an especially active time for hackers, he said. "The attacks on online financial accounts are continuous," Zurawski explained. "The level of activity is routinely high because the likelihood of being caught is extremely low."

I was already feeling a bit edgy, but Zurawski quickly amped up my paranoia by pointing out the number of ways that my account might have been breached. According to him, my information could have been "skimmed" at an ATM, collected at a parking garage, swiped by a disgruntled employee, or compromised in dozens of other, diabolically creative ways.

My Favorite Company That I Don't Even Know

In all likelihood, though, my information was breached because of a company I had never heard of, much less willingly used. Zurawski reminded me of the Global Payments breach, a news story that broke in early April, after the electronic transaction processing company discovered its system had been hacked earlier in the year, compromising up to 1.5 million bank accounts.

Although I had never directly dealt with Global Payments (GPN), Zurawski said that I've probably used its services dozens of times. One of the largest online payment processors, the company handles online transactions for thousands of merchants around the globe. When you pay for something on the Internet, your bank probably doesn't deal directly with the company that you're buying from. Rather, your information gets passed on to Global, which passes it on to a bank, which completes the transaction.

In other words, a company I've never heard of, have never directly dealt with, and know nothing about may hold the keys to my bank account -- and, in this case, may have misplaced them.

This was disturbing, but it still didn't explain how the Global breach, which was discovered almost a month ago, could be responsible for last week's charges on my account. Zurawski pointed out, however, that this recent rash of bank hackings might fit a trend.

"Usually, when an account is hacked, the mischief makers like to hold off on using the information, in order to cover their tracks," he noted. "But when a breach is discovered, they may feel compelled to use the information sooner, rather than later." So my account -- as well as Ken's, Ryan's, and those of several other coworkers -- may all have been breached by the same criminal organization, which spaced out its use of the information.

Joining the Hacked Club

I was surprised to discover how many of my friends and coworkers had had their accounts compromised, but I soon realized that we were only the tip of the iceberg. According to the Privacy Rights Clearinghouse, a nonprofit consumer advocacy organization, 3,044 data breaches have been made public since 2005, affecting 546,357,063 compromised records -- more than one for every person in the country. Most of these aren't bank accounts, but it seems likely that records involving almost every aspect of our lives have been breached at some point.

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Paul Stephens, director of policy and advocacy at PRC, agreed that my account might have been compromised in the Global Payments breach. According to him, it "heavily impacted people in the New York City area." But I will probably never find out for sure: Global Payments has not released any information about which accounts were affected or which companies were involved. "It's the typical stonewalling that we get when these types of breaches occur," Stephens explained.

My wife and I are fairly careful about our bank security: We regularly check our account for unexplained charges, shred our mail, and are careful about which ATMs we use. However, Stevens pointed out a major chink in our armor: A few years ago, we started making most purchases with our debit cards.

"You shouldn't use your debit card to buy things," he told me. "They don't have the same legal protections as credit cards." Under the law, he noted, banks have 45 days to investigate compromised accounts. If they have not concluded their investigation within two weeks, they must reimburse the customer, but are legally able to take the money back if they later find that they have been cheated. "If you're using a debit card, you could end up in a situation without funds," he warned.

On the bright side, Chase seems to handle these problems quickly. Every person we talked to commented on their fast, efficient service, noting how quickly their funds were restored. In our case, the money was back in our account within a day.

Still, Stephens has a point. Within a day, yet another mystery charge was on our account, this one from a company based in Great Britain. Here we go again ...

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.



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]]>Authentifybank account hackedBankAccountHackedBruce Watsonchase bankChaseBankdata breachdata theftDataBreachDataTheftGlobal Paymentsglobal payments breachGlobalPaymentsBreachidentity theftIdentityTheftinternet fraudInternetFraudJohn ZurawskiPaul StephensPrivacy Rights ClearinghouseskimmingBruce WatsonMon, 23 Apr 2012 01:00:00 ESTAs Seen on TV: The Shed Pal Is More of a Frenemy of Pet Hairhttp://www.dailyfinance.com/2012/04/20/as-seen-on-tv-the-shed-pal-is-more-of-a-frenemy-of-pet-hair/http://www.dailyfinance.com/2012/04/20/as-seen-on-tv-the-shed-pal-is-more-of-a-frenemy-of-pet-hair/http://www.dailyfinance.com/2012/04/20/as-seen-on-tv-the-shed-pal-is-more-of-a-frenemy-of-pet-hair/#commentsFiled under: , ,




Spring is here, bringing fresh flowers and sunny skies, warm days and sweet breezes. But if you're a pet owner, the warm weather also brings some less attractive arrivals -- namely, drifts of hair as your beloved animal sheds his or her winter coat. Traditionally, there have been just two solutions to the problem: You could either brush your pets regularly or you could invest heavily in scotch tape and lint brushes.

Recently, the As Seen on TV folks rode to the rescue with the Shed Pal, a handy-dandy gadget that -- they claim -- sucks up the excess hair while giving your pet a nice little massage. We decided to give the Shed Pal a shot; unfortunately, neither I nor any of my friends owns a dog.

The Shed PalLuckily, the Shed Pal commercial claims that it can also be used with cats, so I decided to give it a try with one of mine. In the instructions, it suggests getting your pet used to the machine slowly. The first step is to "Introduce with Shed Pal off. Use praise!" In my case, I plied my cat, Beezer, with treats and plenty of petting, while slowly combing him with the machine. He put up with the treatment -- largely, I assume, because of the steady stream of Whisker Lickin's that I was feeding him.

The next step is to "Acclimate with Shed Pal on. Use treats!" Although I'd already tried the treat trick, I figured that bribery was my best route, so I gave Beezer a few snacks, then switched on the machine. Beezer, his mouth full of cat munchies, gave the machine one frenzied glance before jumping up and running out of the room.

A few more treats and a bit of catnip later, Beezer and I gave it another shot. I managed to get a couple of passes in with the Shed Pal before he jumped out of my lap and again scurried off. Repeated attempts got us to the point where he would put up with the machine for about thirty seconds before the fight-or-flight instinct kicked in. Ultimately, I had to acknowledge that the Shed Pal was a pretty solid failure, at least as far as Beezer was concerned.

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Not that it mattered all that much, as the Shed Pal's performance was not quite as good as advertised. On TV, it seems to suck up excess pet hair like a Dyson vacuum, but in reality, it picked up very little, either from my cat or from my upholstery. To make matters worse, even the small amount of hair that it managed to grab quickly shot back out through the holes that liberally perforated the Shed Pal's containment vessel. Reading through more of the instructions, I soon understood why: While its $16 price tag seems like a reasonably good deal, the Shed Pal pretty much comes half-assembled. If you don't want hair flying all over your home, you need to install a Shed Pal filter. The company charges $9.99 for five of them.

By comparison, a good pet comb costs under $10 and a pet hair lint roller runs just over $2. Together, they cost a lot less than the Shed Pal, and will do a much better job of getting hair off your pets and keeping it off your furniture. To sweeten the deal, they're also a lot less likely to lead to cat scratches and freaked-out dogs. In other words, when it comes to taking care of your pet hair problems, the classic methods still work best.

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.

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]]>As Seen on TVas seen on TV reviewAsSeenOnTvAsSeenOnTvReviewcat hairCatHairdog hairDogHairfeatured videoFeaturedVideois it worth itIsItWorthItlint brushLintBrushpet hair removalPetHairRemovalshed palsheddingShedPalBruce WatsonFri, 20 Apr 2012 11:45:00 ESTPaying for College: Two Websites Offer Outside-of-the-Box Ideashttp://www.dailyfinance.com/2012/04/19/paying-for-college-two-websites-offer-outside-of-the-box-ideas/http://www.dailyfinance.com/2012/04/19/paying-for-college-two-websites-offer-outside-of-the-box-ideas/http://www.dailyfinance.com/2012/04/19/paying-for-college-two-websites-offer-outside-of-the-box-ideas/#commentsFiled under:

Buy My FaceWith student loan debt at a trillion dollars and rising, it's hardly surprising that more and more students are searching for creative ways to finance their college educations. But while extreme measures, like renting out one's face for advertising or majoring in petroleum engineering have their merits, they aren't quite the broad-based solutions that millions of students and recent graduates need.

Most tuition proposals, like President Obama's college incentive plan and FixUC's innovative post-graduate tuition payment proposal, are aimed at the next generation of students; they do little for current undergrads, much less the millions of alumni desperately trying to pay down their student loans.

Today's average student borrower takes out $25,250 in loans, an all-time high. Thankfully, a number of companies are stepping forward with innovative tools to help students fill the funding gap.

Navigating Financial Aid

One of the first problems with paying for college lies in finding out exactly how much it will cost. Between the confusing morass of financial aid offerings and the dozens of extra fees that most schools pile on top of the base tuition, prospective students often have only a vague idea of the financial burden they're taking on -- or of the options that are open to them. "Many people don't apply for financial aid because they don't think that they'll qualify," claims Sue Khim, founder and CEO of Alltuition.com. "Last year, at least 1.7 million people who would have qualified didn't apply."

Alltuition helps prospective students get an idea of exactly how much they'll pay to attend a particular university. To do this, it adds together tuition, likely book costs and living expenses, then estimates how much of the total would be covered by grants, scholarships and loans. Khim notes that most of the site's information is available through reports compiled by the federal government, but that it's out there piecemeal: "We merge the data and randomly sample schools to make sure that it is accurate."


When it comes to determining how much financial aid a student is eligible for, universities consider a variety of factors, but AllTuition bases its estimates solely on family income. As Khim explains, "We've found that family income is one of the largest determinants of the level of financial aid that a family qualifies for." By focusing on this single factor, the site can simplify the process and offer a reasonable -- albeit far from definitive -- estimate that families can work with. Universities, on the other hand, "tend to be much more cautious about their estimates," Khim says, though many universities have found Alltuition useful, and link to it from their own websites.

The site's financial estimation tools are free; it only charges for its one-on-one services, in which staffers aid families trying to figure out their financial aid options.

Khim and her partners developed AllTuition because of their own painful experiences with college financing. "I did this process for myself in college," she recalls. "I thought that I was savvy, but, looking back, I realize that it was overwhelming. ... I realized that, by making the financial aid process easier, I could also make [college] accessible to a larger group of people."

The Weekly Scholarship

But figuring out the real cost of college is only half the problem; the other half is finding ways to pay for it. Jim Wolfston, CEO of CollegeNET, thinks his company may offer a small piece of the solution. The firm, which develops and operates web technology for colleges across the country, gives away a weekly scholarships totaling between $3,000 and $10,000.

In some ways, CollegeNET uses a fairly traditional scholarship model -- the student who writes the best response to a question posed on the site ends up with the money. But the selection process has an interesting twist: The winning entry isn't determined by an anonymous panel of educators, but by the site's college-aged users.

"We decided to give the power to students," Wolfston says. "We opened up the essay options to them, so they could see what others write, learn from their work, and figure out how their ideas fit into the topic mix on the site." In the process of pursuing its grants, the company hopes, students will learn valuable lessons about the best way to present their ideas.

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CollegeNET's model wasn't always quite so innovative: When it started offering scholarships fifteen years ago, it used a fairly traditional structure. "Our method was pretty much the same-old, same-old," Wolfston admits. "We had a panel of adults who decided the winner. It was a lot of work." Ultimately, the company decided that the best way to streamline its scholarship process was to cede control to its student users. "Now students come up with topics that they think will be interesting to their peers, and decide which essays are best written," Wolfston explains. "We've given students the power to control the scholarship process, as well as the opportunity to develop journalistic awareness and skill."

To encourage participation, the site also gives scholarship money to students who contribute questions and vote on the essays.

CollegeNET's awards are funded out of the site's advertising revenues, which means that, in addition to deciding who gets the money, its student users also indirectly control the size of the awards. "As the site gets more user activity, it adds more money to the scholarship fund," Wolfston explains. "As our exposure increases, it increases the money that's available." Right now, he estimates, the site gets 30,000 to 40,000 users per month, many of whom are referrals from student aid offices is high schools and universities.

As more students discover CollegeNET, the size of its scholarships will increase. "We hope to give away a lot of money," Wolfston notes. "Our site could be very helpful in this environment."

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.

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]]>Alltuitioncollege scholarshipscollege tuitionCollegeNETCollegeScholarshipsCollegeTuitioncost of collegeCostOfCollegefafsafinancial aidFinancialAidpaying+for+collegepaying+for+tuitionpaying+student+loanspayingforcollegepayingfortuitionpayingstudentloanspersonal financePersonalFinancestudent loan debtStudentLoanDebtstudents+paying+for+own+collegestudentspayingforowncollegeSue KhimSueKhimBruce WatsonThu, 19 Apr 2012 11:00:00 ESTCould the Next Big Investment Craze Be Hedging Marriages?http://www.dailyfinance.com/2012/04/17/betting-against-marriage-wedding-present-hedge-divorce/http://www.dailyfinance.com/2012/04/17/betting-against-marriage-wedding-present-hedge-divorce/http://www.dailyfinance.com/2012/04/17/betting-against-marriage-wedding-present-hedge-divorce/#commentsFiled under: ,

Wedding Bet HedgingIt's a tough time to be an investor -- the stock market is moving in fits and starts, gold is sliding back down from its once-dizzying heights, and ridiculously low federal lending rates mean that banks aren't really all that interested in borrowing your money. But if you're looking for a promising gamble that could pay off big, there's a new investment opportunity on the horizon: hedging marriages.

Betting on marriages may now be possible, thanks to Wedding Gift Refund, a new service for wedding guests. Recognizing that many couples move quickly from the the altar to the divorce court, the company gives guests a chance to ensure that the money spent on today's gift won't transfer into disappointment after tomorrow's divorce. After buying a gift, guests simply register on the company's website, pay 8% of the gift's purchase price, and upload a copy of the receipt. If the marriage dissolves within three years, Wedding Gift Refund will reimburse the full price of the present.

On the surface, this doesn't seem like a great investment opportunity: After all, even if a couple gets divorced, the 8% cost of a gift insurance policy means that -- at best -- you would only receive 92% of your initial investment. But what if you could insure presents that you didn't buy?

This idea isn't as farfetched as it sounds -- in fact, it has a firm backing in recent history. Credit default swaps, the financial instruments that threatened to destroy the global economy a few years ago, were little more than insurance policies taken out on risky loans. Originally, these were designed to ensure that lenders would not lose their money when loans failed, but several investors, including Jeff Greene and Michael Burry, discovered that it was possible to take out insurance policies on loans that they didn't actually hold. Thus, when the loans failed, they didn't lose any money on the actual loan, but profited mightily from the insurance policies.

The trick, then, lies in taking out insurance policies on gifts that one doesn't actually buy. On the Wedding Gift Refund site, this wouldn't be too hard: The website allows customers to insure multiple gifts, as long as they can produce receipts. In fact, their only restriction seems to be that presents have to cost between $50 and $500.

Getting other wedding guests to surrender their receipts could be a bit more difficult, but it seems likely that many would be willing to sell their receipts for a small sum -- say $10. In other words, for an insurance policy on a $100 gift, one would have to invest about $18. Alternately, if you're a member of the wedding party, you could collect receipts under the pretense that you're gathering them for the bride and groom (although, admittedly, this might count as insider trading).


The next step would be finding the right marriage to invest in. Luckily, there is no dearth of divorce statistics, and a dedicated analyst could pretty easily handicap the marriage market. For example, according to numbers compiled by The Wall Street Journal, Massachusetts has 1.8 divorces per thousand marriages, the lowest rate in the country, while Nevada has a staggering 6.6 divorces per thousand marriages. In other words, a Vegas marriage is nearly four times as likely to fail as a Boston one.

There are dozens of other factors. For example, statistics show that couples that get married before 18 are more than twice as likely to get divorced than those who get married after 24. And factors like prior failed marriages, number of children, profession, and whether or not a partner smokes can all have an impact on the longevity of a marriage.

On the other hand, if you want to avoid all the calculations, the Divorce360.com marriage calculator is a nice tool for quickly determining the wisdom of an investment:





Admittedly, some of the most potentially lucrative marriages don't require all that much research. For example, if one had chosen to invest in the recent Kim Kardashian/Kris Humphries union, the profits would have been staggering. All told, the couple brought in an estimated $100,000 in wedding gifts. Given the 500-person guest list, this would have worked out to about $200 per gift, or $16 per Wedding Gift Refund insurance plan. Adding in an expected charge of $10 per receipt, the total cost to hedge the entire Kardashian/Humphries nuptials would have come to about $13,000.

That's a fairly stiff price, unless one considers that Kim and Kris' marriage dissolved after only 72 days. For someone who bet against them, this would have yielded a profit of $87,000, or a more than six-fold return on the original investment. So betting against Kardashian could have left a savvy investor with a very happy ending!

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.

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]]>Bruce Watsoncredit default swapsCreditDefaultSwapsdivorce insurancedivorce statisticsdivorce360DivorceInsuranceDivorceStatisticsFinanceHigh Yield InvestingHighYieldInvestingJeff GreeneMassachusettsMichael Burrythe+next+big+invesmentthenextbiginvesmentTwitterWedding Gift Refundwedding insurancewedding presentWeddingGiftRefundWeddingInsuranceWeddingPresentBruce WatsonTue, 17 Apr 2012 05:20:00 EST