Survey: 8 In 10 Americans Experienced A Financial Shock Last Year

Americans have little financial security, and aspirations to upward mobility have eroded, according to a new report by the Pew Charitable Trusts, “Americans’ Financial Security: Perception and Reality.”

“Our findings show that despite a steady economic recovery, many Americans continue to feel vulnerable,” said Erin Currier, director of Pew’s financial security and mobility project. 

In the last year, 82% of Americans experienced an economic shock such as a drop in income, a hospital visit, the loss of a spouse or partner and a major car or house repair.

Of that group, 55% reported that they found it hard to make ends meet. This is part of a much longer trend in the slowing growth of family earnings: From 1979 to 1999, the typical worker experienced a 22% growth in wages but from 1979, wages inched up just 2%.

As income increases have slowed, American workers also have changed their aspirations: When asked whether financial security or upward mobility were more important, a record number, 92%, chose financial security, a rise of seven percentage points.

“These statistics tell a powerful story of the economy tightrope Americans are facing,” said Currier.

How To Halt A 401(k) Rip-Off

It’s often difficult to spot a 401(k) rip-off. But it can be even more difficult to stop the pilfering.
Sometimes you have to go to court — for years.
Score one for workers in a recent settlement between Lockheed Martin Corp. and employees who sued the defense company over its 401(k) plan, the fifth largest in the U.S. covering some 100,000 workers and holding more than $26 billion.
Though it has denied wrongdoing, Lockheed agreed to pay its workers $62 million. It’s believed to be one of the largest 401(k) suit settlements to date.
What was Lockheed doing? There were some clear signs that things were amiss in the huge retirement plan.
In a lawsuit filed nearly nine years ago, workers alleged the following:
* The employer was overcharging on mutual fund fees, also known as “expense ratios.”
* An “unreasonably high level of assets” were kept parked in money-market funds, which were yielding close to nothing.
* Middlemen charged “excessive” bookkeeping fees.
* Matching contributions were paid in company stock.
“We are pleased to have achieved this historic settlement for the employees and retirees of Lockheed Martin,” said Jerry Schlichter, Managing Partner at Schlichter, Bogard & Denton, the firm that represented Lockheed employees.
“In addition to the financial terms, the employees and retirees will benefit significantly from the use of competitive bids for services to their plan, reporting to the Court, assuring compliance, a greater degree of transparency, and lower overall costs. This means the company’s employees and retirees can look forward to the opportunity to build very meaningful retirement savings.”
What You Can Do
The lodestone for why this suit was so important — something you can look for in your 401(k) plan — is what the company agreed to in settling the suit.
Is your company doing its job in vetting expenses, which are often too high?
In addition to finding funds or separately managed accounts with the lowest expenses, Lockheed is required to approach at least three bidders for administrative middlemen. That’s a best practice for any employer.
Lockheed was also mandated to keep an eye on how much money is kept in low-yielding income or “stable value” funds.
As I noted earlier, it’s not a simple matter to find out if you’re getting a fair deal in your 401(k).
But if you can do one thing, what would it be?
I would ask your employer to do an independent fiduciary audit of your plan and make the results available to an employee committee. Here’s what the audit should include:
1) Are fees charged in the plan — and to employees — low cost given the size of the plan?
2) Are there embedded conflicts of interest? Does the fund manager also handle administration? You want to avoid that.
3) What are some of the hidden expenses such as “soft dollars” or brokerage commissions or wrap fees? How can they be eliminated?
4) Are the funds within your plan being compared to the appropriate benchmarks? Are they consistently lagging the gauges?
5) Did your employer make every effort to give you a diversified, low-cost plan?
6) What could improve the net return of the plan? Do you have index funds covering every major asset class? Can you eliminate company stock?
What do you do with the report once you have it? Discuss it among your co-workers? Ask your employer to improve your plan and implement suggestions.
And if your bosses ignore you, what then?
Under federal law, you have a right to sue them under ERISA, a federal law that protects worker rights and pensions. Don’t be surprised if that’s what it takes to enact some changes.
Stay tuned, as the court battle over bad 401(k)s is far from over. The Supreme Court will decide a case later this year that involves another 401(k) suit.

44 Ways To Make More Money

Usually, people who want to bolster their finances trim their expenses.

But cutting costs only goes so far. Unless you already make a lot of money and spend like a bon vivant, most people can’t eke out that much more from their budget by decreasing expenses. Plus, the more you retrench, the more your quality of life suffers. (It’s all relative, though — certainly some overspenders could actually improve their lives by tempering their expenditures.)

If you’re looking to increase your revenue streams, take heart: Opportunities to earn extra money abound for people at all levels of experience. While the gigs requiring more experience will pay more money, for those starting out, even the earnings of lower-paying jobs will add up over time.

That extra money can be put toward helping you pay down debt, boost your net worth or save for big goals, such as making the leap to freelance.

These ways of making extra money cover a wide range in terms of compensation and prestige. Check out the options to see what could work for you, keeping tabs on a projected per-hour rate so you can see what would be worth your time. The list is loosely arranged by 1. jobs requiring more skill or expertise, 2. gigs needing less and 3. things you can sell. And if you think of any good options I missed, please let me know in the comments.

1. Change jobs.
This is the best way to boost your earnings, as you have the most leverage at the moment that a company wants you but isn’t sure whether it can get you. Use that to your advantage in negotiations. Another benefit of getting a bump up when you switch jobs is that the percentage boost will be baked into all your future raises, elevating your lifetime earnings. Here’s how to negotiate your salary.
2. Request a raise.
Getting a raise is an excellent move because it doesn’t require you to trade more time for more money. You are putting in the same amount of time, but pulling a bigger paycheck. But, it’s always a bit tricky to ask for a raise when your company already has you at your current salary. You’ve got to make a strong argument you deserve the increase. Here are the top 10 mistakes to avoid when asking for a raise.
3. Freelance.
Freelancing is the next best thing to being paid more for your full-time work, because professional work always pays more than unskilled. To find opportunities, let former colleagues or other personal connections that you’re available for freelance gigs. (Here are some ideas on how LinkedIn could be useful for that.) Or, post on marketplaces particular to your field. For instance, Mediabistro, a journalism site, allows freelancers to post profiles of their experience and services. Though these are more up to chance, designers can bid on jobs at 99Designs.com or submit a design at Threadless, to see if it will be crowdfunded. Elance-Odesk also lists many freelance opportunities, and you can also post your own services on Fiverr, although some freelancers say these services create a race to the bottom on fees and so are not very lucrative. If you’re new to freelancing, here’s how to set your rates, and here’s how to negotiate raises with clients.
4. Blog.
If you have an area of expertise, you can create a website with ads and affiliate links, like blogger J. Money did (boosting his net worth $400,000 in 7 years) in and as Smart Passive Income guru Pat Flynn, who has so far earned $3 million blogging, does. Get Flynn’s tips on how to create value for your audience.
5. Coach.
If you have enough experience in your field to coach others with their careers, then create a website — or, if you have one, add a section describing what you’d offer as a coach. Advertise your services in industry forums and give new clients a discount or other incentives to refer you.
6. Tutor.
Whether for high school students or adults, you can monetize your expertise by teaching people with less experience or knowledge than you in that subject area. You can work with an established group like Kaplan for, say, SAT tutoring, or you could try hanging out your own shingle and making your services known either to students, parents and schools in your community. If you are targeting adults, you can create your own website or list your services with adult tutoring companies.
7. Teach an online course.
If you have an area of expertise, instruct a course through a site like Udemy or Skillshare.
8. Temp.
Many offices need temporary workers, so old-school companies like Kelly Services do still exist and list such opportunities. Indeed.com aggregates listings by location. Do an Internet search to find local listings.
9. Cash in on your craftsy side.
Do you knit or make jewelry or create letterpress items? Sell your wares on Etsy, Cargoh, Craft Foxes and other such sites.
10. Give tours of your city.
Vayable allows you to guide tours centered around a particular cultural experience. Some members’ offerings include a Paris photography tour and a Queens tastes of the world tour.
11. Capitalize on your inner chef.
If your cooking skills regularly impress family and friends, get paid to create memorable meals for clients with KitchenSurfing.
12. Get paid to run errands. 
If you’re handy and generally available to run errands, sign up with TaskRabbit or Zaarly, or just put a notice up on Craigslist to get groceries for time-crunched people or do general handy person tasks for the useless-with-a-hammer set.
13. Become a driver.
If you’ve got wheels, you can earn extra money shuttling around those without through Uber and Lyft.
14. Wash cars.
Even if you don’t have wheels yourself, you can spiff up those of your family, friends and neighbors.
15. Walk dogs.
If you have a flexible schedule and a passion for pets, ask friends, family or neighbors if they might need a dog walker. You can also post your services on dog walking sites.
16. Wait tables or bartend.
Almost anyone can wait tables, and if you know how to mix drinks, bartending can be a quick way to make extra cash. Both can be lucrative in tips. Read here to find out how to earn more in tips.
17. Cater waiter.
Try Waiters to Cater or find a local company offering cater waiters, and sign up for opportunities.
18. Clean homes. 
Use a service like HomeJoy to find housecleaning opportunities.
19. Mow lawns, rake leaves or shovel snow.
Again, ask friends, family and neighbors if they’d like to hire you for these services.

20. Babysit.
Use SitterCity, and ask family, friends and neighbors if they could use a sitter or know of other families looking for one.
21. Photograph or play music at weddings.
If you’re a musician or photographer, advertise your skills for weddings or other commercial events on your own portfolio site or with a service like Thumbtack, Gigmasters, Gigsalad, WeddingWire, and Snapknot.
22. Busk. 
If you play an instrument and/or sing, take your music to the public squares or popular transit stops, keeping mind of local laws. Hey — even world-famous violinist Joshua Bell does it.
23. Be a delivery person.
You can apply at local restaurants, or try a service like Postmates.
24. Be a mystery shopper.
Get hired to shop and then report back on your experience. Find out how it works and then, to avoid mystery shopping scams, find legitimate opportunities at the Mystery Shopping Providers Association.
25. Promote products and events on the street.
Try Street Team Promotion for opportunities.
26. Rent your car out. 
Try GetAround and RelayRides.
27. Host guests or rent out your place.
If you either have an extra room or can crash elsewhere to rent out your whole place, you can also make extra money by renting out your home to visitors to your city with Airbnb or VRBO.
28. Participate in focus groups.
Give your opinions on products and more. Try companies like Focus Pointe Global, Inspired Opinions, Harris Poll Online, Toluna, SwagBucks, MySurvey.com, Opinion Outpost, iPoll and Hiving.
29. Be a test subject.
When researchers run clinical trials, they need healthy subjects to use as a control group against the patients with illnesses. Find out more details from the National Institutes of Health, and search for clinical studies at ClinicalTrials.gov. For psychology experiments, contact your local university.
30. Participate in an online jury.
Help attorneys determine case value or public attitudes at eJury.
31. Write software reviews.
SoftwareJudge.com pays anywhere from $1 to $50 for original reviews.
32. Sell your castoffs on eBay.
Make sure it’s a valuable item and not just your old junk. Take good photos, write a compelling description and price accordingly. For more tips, find out how to declutter and profit from it.
33. Sell on consignment.
For items that you feel are better tried on or viewed in person, whether it’s clothing, shoes or vintage furniture, try a local consignment shop. You can also send items to ThredUp or The RealReal.
34. Sell old electronics.
Instead of recycling these items, see if they can fetch a price. Try stores like Gazelle, Next Worth and USell.
35. Have a yard sale.
For items that won’t sell on eBay, or aren’t worth the hassle of posting, host a yard, garage or stoop sale. Price items low. Think $10 or lower for clothing (except coats can go as high as $15). Antiques and furniture can go as high as $75. Books should be $1, other entertainment items $3-$5.
36. Sell your hair.
Find out what requirements your tresses need to meet before they’re worth money at HairSellon.
37. Sell your photos online.
If you’ve got some eye-catching snaps, post them on Shutterstock, Photoshelter, Fotolia, DreamsTime and/or iStock.
38. If you’re planning to shop, earn cash back.
Ebates offers cash back if you begin your online shopping there. But remember that if you spend a lot of money to get the cash back, you’re defeating your ultimate purpose to earn more. So only use this when you were intending to shop anyway.
39. Sell your gold and silver.
Find out the weight of any gold or silver jewelry you’d like to sell with a kitchen scale or at a jeweler’s. Find out the purity, i.e. 12K, and use Dendritics.com to calculate the potential value. Search for a reputable vendor at Jewelers Vigilance Committee, and also consult the Better Business Bureau. Then shop around for the best offer.
40. Sell bottled water at events.
Buy bottled water in bulk and sell it at festivals or other large events for $1 per bottle.
41. Collect bottles and cans for deposit. 
If you live in one of the ten U.S. states that offer a deposit for cans and bottles, you can collect them and obtain cash.
42. Put ads on your car.
Check out AutoWrapped and FreeCarMedia.
43. Get paid for online searches.
Add Qmee to your browser, and if you click on a search result it offers, you’ll earn some change.
44. Look for unclaimed money.
Yes, sometimes you can have money that you don’t know about. Check in occasionally to see if you are owed any.

U.S. banks pass Fed capital test, trading books hurt

By Douwe Miedema and David Henry

Related Stories

1. Banks brace for U.S. Fed capital buffers inspection Reuters
2. Major banks in US all pass first phase of stress tests AFP
3. [$$] Fed Stress Tests Find Banks Adequately Capitalized The Wall Street Journal
4. All 31 banks had enough capital after Fed's stress test MarketWatch
5. Stress Tests: Foreign Banks Pass First Round, But Face Bigger Test Next Week The Wall Street Journal

WASHINGTON/NEW YORK (Reuters) - All 31 U.S. banks passed a test of how they would do in a next economic crisis, the Federal Reserve said on Thursday, but those with large trading books came out weak because of new elements in the check-up.

The Fed had assumed a surge in corporate defaults in the toughest hypothetical scenario to test banks' resilience, which it said hit banks with large capital market activities.

All 31 banks tested stayed above the 5 percent minimum for top-tier capital. But Wall Street banks such as Goldman Sachs (GS.N), Morgan Stanley (MS.N) and JP Morgan Chase & Co (JPM.N) were among the five banks with the lowest readings.

The results come ahead of the publication of the second stage of the so-called stress tests next week, in which the Fed says whether banks can go ahead with planned increases in shareholder pay-outs such as dividends.(For a graphic, see http://tinyurl.com/m7pv9wo)

In that second stage of the exercise, the Fed uses qualitative criteria to assess how well banks manage their risk. The U.S. units of Deutsche Bank (DBKGn.DE) and Santander (SAN.MC) are expected to fail at that stage.

Zions Bancorp (ZION.O) had the lowest reading, coming in at 5.1 percent in the simulation, which included a 25 percent drop in home prices and a stock market drop of nearly 60 percent. Last year, the bank fell just short of the 5 percent mark.

Next week's review takes a look under the hood of the banks, which Wall Street critics say are "too large to manage", by scrutinizing whether managers are in truly in control of their firms. And the test is becoming tougher each year.

Global regulators have forced banks to borrow less to fund their business after the crisis, and the stress tests are increasingly becoming an important instrument for the Fed to test the industry's resilience.

Soft U.S. data hints at near-term hiccup in economic growth

WASHINGTON (Reuters) - The number of Americans filing new claims for unemployment aid last week rose to its highest level since May, but economists dismissed the increase as weather-related and said the jobs market remained solid.

They were also little perturbed by other data on Thursday that showed factory orders fell in January for a sixth straight month and fourth-quarter productivity declined by more than initially thought.

The reports, however, suggested some near-term weakness in economic growth.

"The underlying fundamentals of the economy remain solid and there is no reason we won't continue to see the type of economic growth and job growth that we saw in 2014 continuing this year," said Gus Faucher, senior economist at PNC Financial Services Group in Pittsburgh.

Initial claims for state unemployment benefits rose by 7,000 to a seasonally adjusted 320,000 for the week ended Feb. 28, the Labor Department said. It was the second consecutive week of increases.

While the Labor Department cited no special factors influencing the data, economists said cold and snowy weather in February and a strike by petroleum refinery workers were likely to blame.

Data for the week ended Feb. 21 showed a large number of layoffs in Kentucky because of bad weather.

"We suspect the pattern reflects the weather rather than fundamental deterioration. That said, we will, of course, be on watch for the possibility that the rise in the last two weeks marks a change in the trend," said Jim O'Sullivan, chief U.S. economist at High Frequency Economics in Valhalla, New York.

The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose 10,250 to 304,750 last week.
The claims data has no bearing on Friday's employment report for February as it falls outside the survey period.

Nonfarm payrolls are expected to have increased 240,000 last month after rising by 257,000 in January, according to a Reuters survey of economists. The unemployment rate is forecast falling one-tenth of a percentage point to 5.6 percent.

The economy added more than a million jobs between November and January, a feat last seen in 1997.

U.S. stocks were trading higher on Thursday after the European Central Bank said it would start its new government bond-buying program of 60 billion euros a month on March 9 and raised its economic growth forecast for 2015.

Prices for U.S. Treasury debt were little changed, while the dollar rose to an 11-1/2-year high against the euro.

SOFT MANUFACTURING

In a separate report, the Commerce Department said new orders for manufactured goods slipped 0.2 percent in January after dropping 3.5 percent in December.

The department also said orders for non-defense capital goods excluding aircraft - seen as a measure of business confidence and spending plans – rose 0.5 percent instead of the 0.6 percent advance reported last month.

Manufacturing has been hurt by softening demand in Europe and Asia as well as a strong dollar and lower crude oil prices, which have caused some energy companies to either delay or cut back on capital expenditure projects.

A labor dispute at U.S. West Coast ports, which has since been resolved, also has weighed on factory activity through disruptions to the supply chain.

There is optimism the sector will regain momentum in the second quarter as some of these factors fade.
"There are some signs that the core capital goods data might be starting to turn the corner after a weak end to 2014," said Daniel Silver, an economist at JPMorgan in New York.

A second report from the Labor Department showed productivity, which measures hourly output per worker, fell at a 2.2 percent annual rate in the fourth quarter as the number of hours worked outpaced output. It was previously reported to have declined at a 1.8 percent pace.

Productivity has been weak for much of the recovery from the 2007-09 recession, helping to boost hiring.
"Of late, job growth has been extraordinary, but it now behooves employers to quickly utilize these new hires as effectively as those already on the job," said Doug Handler, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts.

In the fourth quarter, hours worked increased at a revised 4.9 percent rate instead of the previously reported 5.1 percent pace. Compensation per hour rose at a 1.9 percent rate, rather than the 0.9 percent pace reported last month.

That left unit labor costs, a key gauge of inflation and profit pressures that measures the price of labor for any given unit of output, increasing at a 4.1 percent rate in the fourth quarter - up from the 2.7 percent rate reported last month.

Apple lets companies fine-tune apps before watch debut: Bloomberg

(Reuters) - Apple Inc (AAPL.O) has allowed some companies to test their apps on its yet-to-be-launched Apple Watch and adjust the tools to the watch's design, Bloomberg reported.

Facebook Inc (FB.O), United Continental Holdings Inc (UAL.N), BMW AG (BMWG.DE) and others have spent weeks at Apple's headquarters, working with the smartwatch to test and fine-tune apps that will debut alongside the device, Bloomberg reported, citing people familiar with the process.

The watch, which will let consumers check their email, pay for goods at retail stores and monitor personal health information, will be Apple's first major product launch since the iPad in 2010.

The company has scheduled a special event in San Fransisco on March 9 where it is expected to showcase Apple Watch, which will be launched in April.

Apple uses extreme measures to keep its work secret - Internet access is blocked inside the rooms and no outside materials can be brought in, Bloomberg reported, citing a person who attended the tests.

Apple spokeswoman Trudy Muller declined to comment. Reuters could not immediately reach Facebook, United Continental and BMW for comment outside regular business hours.

German carmaker BMW said on Thursday its talks with Apple did not involve developing or building a car, denying a German magazine report.

Fed should not be too patient on rate hikes, Williams says

HONOLULU (Reuters) - Federal Reserve policymakers should not wait too long to raise interest rates, a top U.S. central banker said on Thursday, because doing so could mean "drastically" overshooting on inflation and forcing the Fed to hike rates dramatically.

Related Stories

1. Fed's Evans, citing low inflation, wants no rate hikes until 2016 Reuters
2. Fed's Yellen flags rate hikes on 'meeting-by-meeting' basis Reuters
3. Fed policymakers weighed risks of interest rate hike, minutes show Los Angeles Times
4. Fed's Williams sees first rate rise in summer or fall 2015 -Fox Reuters
5. Fed's Williams says wouldn't rule out June rate hike -- Nikkei Reuters

"I think that by mid-year it will be the time to have a serious discussion about starting to raise rates," San Francisco Fed chief John Williams said.

With the U.S. economy likely to reach full employment by year's end or even sooner, and inflation looking likely to return to 2 percent within the next two years, waiting on raising rates is riskier than going ahead and starting, he said.

"Overshooting our target would force us into a much more dramatic rate hike to reverse course, which could have a destabilizing effect on the markets and possibly damage the economic recovery," Williams said in remarks prepared for delivery to the CFA Society of Hawaii.

"I see a safer course in a gradual increase, and that calls for starting a bit earlier."

The hawkish remarks from the normally centrist Williams do much to suggest the era of rock bottom interest rates is nearing an end.

At a meeting in less than two weeks, Fed policymakers are set to debate whether to open a door to the possibility of a June rate hike by removing a vow to be "patient" in raising rates.

Williams' concern over waiting too long marks a stark contrast with the dovish worries of another policymaker, Chicago Fed chief Charles Evans, who earlier this week called for delaying rate hikes until 2016, citing the dangers of premature rate increases.

Williams wrote his speech before Evans gave his, yet his pointed comments suggest the depths of disagreement over the course of policy at the U.S. central bank.

"The case for extensive patience certainly has valid points, and esteemed supporters, so let me explain my position," Williams said as he launched into a defense of early rate hikes, including a look back at 1965, when similarly low inflation during a time of similar economic growth gave way in short order to an economy "on a tear."