Monthly Archives: May 2014

2014
05/31

Category:
Revenue

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Facebook Gets Positive Review For Revenue Opportunity

Cantor Fitzgerald on Tuesday reiterated a buy rating on Facebook (NASDAQ:FB), a move led by a multitude of revenue drivers ranging from mobile growth to a potential multibillion-dollar opportunity from WhatsApp.

Cantor analyst Youssef Squali maintained a price target of 80. Facebook stock was down a fraction, near 59, in midday trading in the stock market today.

Currently, the greatest lever for revenue growth is the increased monetization of mobile and premium video ads, Squali said. In the first quarter, Facebook said mobile revenue of $1.34 billion accounted for 59% of total ad revenue, driven by the advent of news-feed ads and growth in volume and pricing.

2014
05/31

Category:
Finance

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Combining finance boards not recommended

NEW MILFORD — It seems like a bad idea.

This is what financial people in the know are saying about the notion of New Milford combining the town and Board of Education finance departments.

The Town Council on Monday approved forming a committee to consider combining the departments in order to save money. The committee will consist of Town Council and Board of Education members, possibly with a consultant hired to guide the discussions.

They might decide `No, it wont work, said Mayor Pat Murphy. But the question has been raised so often, I wanted to put it up for consideration.

For Ray Jankowski, New Milfords finance director, the problem is timing. New financial software is still being installed and the planned July 1 launch date seems unlikely to be reached, he said Tuesday.

Even if the July 1 date were reached, human resources and payroll arent targeted to change over to the new system until Jan. 1, 2015.

We didnt realize how much up-front work would be needed to get MUNIS up and running, Jankowski said of the system. This is rebuilding a system from scratch. Now is not the time to form a committee to determine what might be able to happen in the future. Its not a good time for either finance department to take on anything else.

Added to MUNIS implementation, a new business manager is coming on staff for the Board of Education in June, replacing the long-time business manager.

Richard Carmelich, president of the Connecticut Association of School Business Officials and director of finance and operations for Region 7, said at best only minimal cost savings could be seen from such a merger.

The Board of Education is beholden to a number of state mandates, Carmelich said. But the state wouldnt necessarily object to consolidating departments. However, many towns and school districts that have merged departments in the past have not saved money.

Carmelich added that while some employees might be cross-trained, people in most government positions are already stretched thin, working in bare-bone departments.

A reduction in staff wouldnt be possible, Carmelich said. There are so many reporting requirements for the state on board policies, regarding purchasing, and so many negotiating units, different individuals are need to handle each of those filings.

He cited Plainville and Clinton as having both combined departments and found only minimal cost savings were made. Plainville separated its departments, and Clinton is now doing that, he said.

Other towns have done this in the past, Jankowski agreed. Brookfield and New Fairfield both did it. Both towns had departments fight and severed the connection. In New Fairfield, they got together again. It only works if both sides wants it to.

stuz@newstimes.com; 860-355-7322

2014
05/30

Category:
Credit Cards

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Travel notes / Reward credit cards help airlines waive bag fees

Dont feel sorry for airlines yet.

Airlines made 4 percent less on baggage fees in 2013 than the previous year, according to federal statistics released last week.

That sounds like great news for consumers, but its only part of the story. Airlines have been waiving bag fees as an incentive to get travelers to sign up for fee-generating airline loyalty reward credit cards.

Over the past few years, United, American, Delta, US Airways, Virgin America and Hawaiian Airlines have all promoted airline loyalty reward cards that let fliers check one bag for free.

For example, American Airlines in 2012 introduced a Citi Platinum Select card that waived bag fees.

Bag revenue collected by American Airlines dropped 9 percent from $557 million in 2012 to $506 million in 2013, according to the US Bureau of Transportation Statistics. Airlines are not required to disclose revenue from loyalty reward programs, and American declined to say to what extent credit card fees made up the difference.

Another cause for the drop could be that travelers are packing fewer bags to avoid the fees, but some industry experts say the push for credit cards with bag-fee waivers is playing a big role in the decline.

Carriers are most likely collecting enough revenue from their credit cards to make up for the loss of the waived bag fees, these experts say.

They are earning revenue in many ways, said Brian Karimzad, director of the reward card comparison website MileCards. They get a cut of the annual fees and a cut of what you spend on those cards.

Jay Sorensen, president of IdeaWorks, a Wisconsin consulting company for the airline industry, agrees that airlines are probably not losing money over the credit card fee-waiving tactic.

Airlines dont do anything unless they come out ahead, he said. The airlines are generating equal, if not more, revenue from banks.

Learn to love Spirit

Spirit Airlines, the carrier with the nations highest passenger complaint rate, believes its just misunderstood.

Maybe passengers will learn to love Spirit if they understand that the Florida airline charges fees for carry-on bags, food, drinks and about 70 other extras simply to keep base fares low.

That is the thinking behind a campaign the airline launched this month. As part of the effort, Spirit secured a trademark for the term Bare Fare, as in a fare stripped of all extra costs.

Spirit has also produced two videos, one of a young man and the other of a young woman stripping down to their underwear to fill a carry-on with the clothes they need for a quick trip.

Although other airlines include the cost of snacks and reclining seats in base fares, Spirit says its focus is only on getting you from point A to point B with no extras.

We know that can be a surprise if you are used to other airlines that offer bundled fares, charging higher total prices including stuff you may not even use, said Ben Baldanza, chief executive of Spirit. We know some people say they hate Spirit. We are going to hug the haters.

Dress to impress

With the average salary of a US flight attendant about $37,000 a year, you wouldnt expect to see them wearing the kind of designer clothes worn by Hollywoods A-list celebrities.

Guess again. Last year, American Airlines introduced new crew uniforms created by a pair of designers who have dressed celebrities such as Beyonce, Taylor Swift, Halle Berry and Jennifer Aniston.

Now Tokyos All Nippon Airways is unveiling uniforms designed by New Yorks Prabal Gurung, whose clothing has been worn by Michelle Obama, Lady Gaga, Oprah Winfrey and Jennifer Lawrence.

The uniforms feature light gray jackets and charcoal pants and skirts.

2014
05/30

Category:
Credit Cards

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10 Credit Cards That Offer Huge Rewards Just For Signing Up

If you have excellent credit, the credit card companies really want your business. In order to compete with one another, some cards offer excellent welcome bonuses just to get people to sign up. If youre willing to do a little homework, the perks can really add up. Companies like American Express (NYSE: AXP) , Capital One (NYSE: COF) , and Barclays are offering some amazing sign-on bonuses, so why not take advantage?

Responsible spending is the key
But wont having too many open accounts hurt my credit score? Not necessarily. According to myfico.com, the average high achiever has a total of 4-5 open credit cards, but only uses about 7% of their credit limit. The number of cards you open has very little importance, as long as you dont carry too much of a balance.

Below are some of the best introductory deals you can take advantage of.

2014
05/30

Category:
Revenue

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2014
05/30

Category:
Wise Credit Decisions

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Examining the source of farm equity

I spent a short time working as a commercial lender in a small, rural bank. As a new lender, I was encouraged to grow my loan portfolio. With that goal in mind, I perhaps was a little too eager to approve any loan request that walked through my door. Fortunately for me, my boss was a seasoned lender and was able to guide me toward making wise credit decisions.

At one point, a farmer approached me about a loan request and brought in his financial statements for me to examine. I looked at them and was impressed with his net worth. He had experienced cash-flow issues during the past few years, but his net worth position helped overcome the cash-flow issues.

I put the loan package together and presented it to my boss, but she quickly noticed a problem. I was using market values to calculate net worth. The farmer had a tract of land that bordered prime recreational land. Based on the current economic conditions, the land was valued extremely high. Basing the value of the land on agricultural values vs. recreational values, the farmers strong net worth quickly disappeared. I realized then the importance of understanding sources of equity, or net worth.

The most basic accounting equation, which underpins the balance sheet, is assets minus liabilities equals net worth, or owners equity. Net worth is an indicator of wealth and financial position. However, net worth is complicated because of the problems caused by changes in asset values.

To understand this better, it is helpful to identify the composition of net worth. Net worth is composed of three pieces. The first piece is contributed capital. This can be thought of as the money invested in the business by the owner. The second piece is retained earnings. Retained earnings is defined as the accumulated net earnings of the business that have not been withdrawn or distributed. The final piece is valuation equity. Valuation equity is the change in asset values often defined by the difference between market and cost values.

This quick accounting 101 lesson was necessary to illustrate one of the threats facing farmers. Farmers have been able to strengthen their balance sheet, thanks to favorable prices and growing conditions combined with sharp increases in land values. Researchers at the Federal Reserve Bank of Kansas City have noted that the US farm balance sheet is the strongest it has been since the 1970s.

As we look at the current situation, land values have increased dramatically throughout the Midwest. Average land values in North Dakota went from $670 per acre in 2007 to $1,910 per acre in 2013. We also have seen farm assets go from an average of close to $1 million up to $1.9 million. At the same time, the average producers liabilities have stayed relatively constant.

During the past few years, farmers also have seen a dramatic change in net worth. The average net worth went from $600,000 in 2007 to just more than $1.3 million in 2012.

The question becomes: Is that change in net worth driven by changes in asset values or retained earnings? In 2007, the average net farm income was $192,200. In 2012, the average was $367,317. With this increase in farm income, have farmers been putting those earnings back in the farm or has the change in net worth been driven by appreciating farmland values?

My colleague Frayne Olson and I have analyzed data from 1998 through 2012 to help find the answers. We divided the data into two time periods: 1998 through 2006 and 2007 through 2012. The shift that occurred in agriculture in 2007 would provide a reference point.

Based on our results, farmers during the most recent time period (2007 through 2012) are relying more on retained earnings to build net worth than asset revaluation. In other words, most farmers have been using their earnings wisely.

Perhaps a partial explanation for this change could be lenders shifting focus to earnings-based decisions vs. asset-based decisions. The 1980s farm crisis illustrated the dangers of asset-based lending decisions. Although proper assets must be in place to justify a credit decision, lenders also are requiring sufficient earnings/cash flow to secure credit.

So what does this mean for the future? What happens if land prices fall? What happens if prices do not rebound? I wish I had a crystal ball and could forecast the future accurately. Although I am unable to forecast the future, I believe that we can agree that commodity and input prices will continue to be volatile, which highlights the need for sound financial management.

The hope is that farmers, lenders and researchers can use the lessons from the 1980s financial crisis and the recent agricultural boom to help avoid any future crises.

2014
05/29

Category:
Revenue

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Law firm revenue up slightly in Boston in Q1 2014, but less than national …

Law firm revenue for eight law firms in Boston was up slightly in the first quarter of 2014 compared to the same quarter last year, according to a quarterly report from Citi Private Bank’s law firm group.

The eight Boston-based law firms included in Citi Private Banks survey reported an average .4 percent revenue increase in the first three months of this year compared to the first three months of last year.

The revenue increase among the Boston firms was less than that of the 177 firms nationwide included in the survey, which are a combination of firms of different sizes and which have different global footprints.

Revenue for all 177 firms included in the Citi Private Bank survey increased 4.3 percent.

In its report, called Law Watch, Citi Private Bank explained the revenue increase as a function of the growth in legal services and increased billing rates for lawyers.

However, demand for legal services among the Boston firms decreased 1.6 percent in the first quarter of the year, while rates increased 4.6 percent, the data show.

The rate increase among the Boston law firms was higher than the average of all 177 firms, which saw rates increase 4.3 percent. Among the 177 law firms included in the survey, demand increased 1 percent in the first quarter, the Citi data show.

Numbers for Boston-based law firms were:

Revenue: 0.4%

Expenses: -1.1%

Demand: -1.6%

Total Lawyers: -5.8%

Equity Partners: -5.2%

Productivity: -0.7%

Rates: 4.6%

(Source: Citi Private Bank)

Non-Profits, Philanthropy, Higher Education

2014
05/29

Category:
Credit Cards

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5 credit card mistakes most people make

Most people are familiar with how credit cards work, but because myths and misinformation have made our knowledge of them a little muddy, there are several common mistakes most credit card holders dont even know they are making. Here are the top five:

Only paying the minimum payment
This seems like the easiest way to make a payment on a credit card, but there are some major drawbacks to only paying the minimum payment. The biggest drawback is that youre paying more money overtime in interest. Paying an additional $15 to $20 each month may not seem like itll make a huge difference, but that additional money begins to add up and soon you are paying hundreds of dollars in interest.

An additional drawback to only paying the minimum balance is that it may impact your creditworthiness. If you arent paying your balance off completely each month, lenders might think that youve taken on more debt than you can handle.

Closing old credit cards
Most think that once they pay off a credit card, its in their best interest to close the card so they dont have the temptation to build up a balance again. Even though it seems like a good idea to remove the temptation, closing the card can impact your credit utilization ratio, which can negatively impact your credit scores.

Maxing out credit cards
Even though there are circumstances when you may need to use most or all of your available credit, its best if you pay down the balance as quickly as you can. If you dont, it can have a negative impact on your credit scores. Similar to closing old credit cards, maxing out your credit cards or carrying a hefty balance raises your credit utilization ratio.

Applying for multiple credit cards at once
Opening new credit cards is one way to positively impact your credit scores because it adds to your total available credit, which lowers your credit utilization score. That being said, applying for multiple credit cards at once may have the reverse effect on your credit scores. Too many hard inquiries on your credit report can negatively impact your scores, which will make you seem desperate for more credit. Its best to apply to a credit card that you know youll get approved for.

Ignoring monthly credit card statements
Its essential that you open your statements and thoroughly look through them before you throw them out. Verify that you completed each of the transactions yourself and report any unknown transactions to your bank as possible fraud. This is an important habit to get used to, especially with all of the store data breaches that have occurred since the end of 2013, including the Target breach that exposed 110 million of its customers. By simply checking your statements each month, you can know if you fell victim to a possible security breach and even catch fraudulent transactions before its too late.

Julie Myhre is an editor at Next Advisor. A longer version of this article originally appeared on Next Advisor.

Metro does not endorse the opinions of this author.

2014
05/28

Category:
Credit Cards

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Texas man busted with fake credit cards may be linked to massive Target data …

A scammer busted using fake credit cards at Texas Target stores last December may be linked to the massive security breach at the retail giant which exposed the data of more than 70 million customers, court documents show.

Guo Xing Chen, 40, is behind bars after employees at a Georgetown Target busted the man using a fake credit card Dec. 12 and called police, WOAI-TV reported.

The buy attempt came one day after Chen used a fake card at a Target in Temple, some 40 miles north, to buy thousands of dollars in giftcards and Apple iPads. The scam prompted a Central Texas-wide Target lookout alert for Chen.

Chen had also scammed thousands from a Round Rock Target, court documents show, and an employee there also alerted cops to the scheme.

2014
05/28

Category:
Credit Cards

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8 Credit Cards Mistakes Everyone Makes

With billions of credit cards being used every day, its no surprise that there are a lot of misconceptions and misunderstandings when it comes to credit. Below are the eight most common credit card mistakes that you should avoid.

1. Maxing out credit cards: Although there are circumstances when you may need to put a hefty amount on your credit card, its ideal to never max out your credit cards. On top of possibly going over the credit limit with interest or accidental charges, maxed out credit cards can also have a negative impact on your credit utilization ratio, a percentage used by lenders to determine how risky it is to loan you money. Its calculated by dividing your total used credit by your total available credit to determine a percentage. Its better to have a lower percentage — between 10 and 30 percent — because it shows you have more available credit and less money owed.

2. Only paying the minimum payment: This may seem like the easiest way to pay down a balance, however only paying the minimum payment isnt the most beneficial way to pay. Along with hurting your credit utilization ratio by carrying more debt, youll end up paying more money in interest in the long run. Even just paying an additional $20 each month will help you pay down the balance quicker and save you money overtime.

3. Closing old credit cards: A lot of times consumers get overwhelmed with the number of credit cards they acquire, so theyll cancel any old cards they have. Even though this sounds like the best plan to manage your cards, closing old credit cards can actually hurt you by lowering your credit score. Fifteen percent of your FICO credit score is based on your credit history, according to FICO, so by canceling any credit cards that were opened 5, 10 or 15 years ago, youre potentially deleting that history from your reports and potentially impacting your credit scores. It also lowers your overall credit limit, which can increase your credit utilization ratio. Instead of closing the cards, you should store them in secure place, such as a personal safe, and only use them when you need to.

4. Applying for multiple credit cards: Opening new lines of credit is one of the many ways to boost your credit scores, mostly because it lowers your credit utilization ratio. Even so, applying for multiple credit cards at once may have the opposite effect on your credit scores by making you seem desperate for credit. Every time you apply for a new line of credit, such as a credit card or loan, the lender pulls a copy of your credit reports and scores, which is called a hard inquiry. These inquiries appear on your credit reports and can even lower your credit scores if you have too many of them at one time. So if youre planning on applying for any type of credit card, its essential that you only apply to one card at a time and choose a card that youre almost certain that youll get approved for.

5. Not knowing when the introductory period ends: Credit cards with introductory periods, such as a 0 percent APR offer, are great options to help you maintain any previous balances, through a balance transfer, and can even help out if you need some financial assistance with a large purchase in the near future. That being said, its essential that you know and keep track of when the cards introductory period ends, or you may be paying more in interest or fees that you werent anticipating.

6. Taking cash advances: There are instances when you may be in need of some cold, hard cash, and taking a cash advance from your credit card may seem like the best option. Its not. Cash advances charge additional fees including a transaction fee that youre charged every time you get a cash advance. You are also charged a higher APR than on other purchases. Cash advances also dont have a grace period for interest such as traditional purchases do, so you begin to get charged interest the day that you withdraw the money. Its best if you find another solution to get the cash, pay with credit if you can or make sure you pay off the cash advance as soon as possible so you dont have to pay a lot of money in additional fees and interest.

7. Not reading the fine print: Every credit card has some sort of fine print to explain the logistics of the card. Often times this fine print is overlooked by the card holder, which isnt the best idea because that fine print explains all of the details for a card, including what your APR is, what fees come with certain transactions and any rules that dictate how the credit lender can change the terms of your agreement. The fine print is considered the legal agreement between the cardholder and lender, and reading it thoroughly can help the cardholder understand every aspect of their card so there are no surprises down the road.

8. Ignoring monthly credit card statements: This is a habit that a lot of card holders have gotten used to. They receive the statement and just throw it out instead of reading it. Its essential for you to comb through your monthly statement to verify that there are no possible fraudulent charges on the account. If you notice any unfamiliar charges, you should contact your bank immediately and report it as fraud. By simply looking through your statement each month youre being proactive about protecting yourself from identity theft, and more likely to catch potential fraud before it gets out of hand.