The Right Way to Manage Your Mom or Dad’s Money

Daughter helping senior father with computer
Shortly after Terrie Hull’s mother got in a car accident in 2011 that caused brain damage, her mother married a man Hull didn’t trust. Soon, Hull learned her instincts had been right: Her mom, under her new husband’s guidance, accused Hull of stealing money from her. Hull and her husband Jon, who live in Portland, Oregon, had to go to court to defend themselves and make sure her mother’s money would last as long as she lived.

It was — and continues to be, since she no longer speaks to her mother — a nightmare that the Hulls want to prevent from happening to other people. They wrote their new book, “A Legacy Undone,” as part of that goal. “We want people to know that no matter how close a family is, something this tragic can happen when there’s a new influence involved,” she says.

One of the most powerful steps that families can take to protect the finances of aging family members is to have a written plan in place that specifies how their money should be managed as they get older, the Hulls say. “Families are just not talking about it soon enough. We need to discuss this while we’re all lucid, before age 50,” Jon Hull says. Families who have been talking openly about money all along have a big advantage, he says, because if children and parents have never previously discussed estate planning, then it can feel uncomfortable and even greedy when kids bring up the subject.

“We’re trying to help the well-intentioned but clueless people.” – Naomi Karp

“We know there are many millions of Americans who cannot manage their own money due to cognitive impairments and other disabilities,” says Naomi Karp, senior policy analyst at the Consumer Financial Protection Bureau’s Office for Older Americans. Karp says 5.3 million Americans have Alzheimer’s disease, and that’s just one type of dementia. Some 22 percent of Americans over age 70 have mild cognitive impairment, she adds, which can make it difficult for them to manage their day-to-day finances. People with mental illness or disabilities also have others manage their money for them; she says that there are at least 25 million people in the U.S. with the legal authority to manage someone else’s money.

That’s why the bureau published a series of guides in 2013, “Managing Someone Else’s Money,” which can be downloaded for free on the agency’s website. Since most people managing money for friends and family members are not financial professionals, they often don’t understand their legal and ethical obligations, Karp says. Even caregivers who mean well make common mistakes, such as adding their own name to a joint bank account or borrowing money with the intent to pay it back later. “We’re trying to help the well-intentioned but clueless people. Some mistakes people make are pretty bad,” Karp says. To avoid falling into that category, consider these tips:

Develop, Write Down Plans When Everyone Is Healthy

The Hulls suggest “putting one’s affairs in order,” including writing a will and creating power of attorney documents (as well as a health care proxy), well before you think you’ll need one. “If a person becomes incapacitated, even for the short-term, you want to make sure your wishes are known,” Jon Hull says. The couple also suggests specifying your wishes for any digital assets, such as the rights to domain names and social media accounts, as well as writing out an overview of all assets, accounts, insurance policies, storage units and other information. “These conversations are only difficult if you wait too long to have them,” Jon Hull says.

Ease Your Parents’ Fear of Losing Control

“When someone is older, they are losing control over all different aspects of their lives. Their health care situation becomes precarious at times, you’re losing so many things, so an older person will grab ahold of everything they can control. When a family member or friends tries to help them, they sometimes shut down,” says Kathleen Hastings, a portfolio manager at FBB Capital Partners in Bethesda, Maryland, who has expertise on financial issues facing seniors.

To help ease those fears, Hastings suggests explaining your offer to help them in a way that makes it clear you are not trying to take over their finances, but merely serving as support for them. When Hastings noticed her mother struggling with some financial tasks, she said to her, “Would you like me to be your administrative assistant? I’ll be your helper.” Parents, Hastings adds, still need to feel they have control over their lives.

Involve Other Family Members

When one sibling starts managing parents’ money it can create tension among other siblings or family members. Hastings suggests holding a family meeting to designate the point person who will make health care and financial decisions, then making sure everyone is in agreement. To help protect yourself from being accused of mismanagement, Hastings suggests inviting a witness whenever you visit a safety deposit box or handle money. People with dementia can become fearful that others are stealing from them and can even falsely accuse their children of such actions.

“Make sure you have copies of everything to protect yourself from being accused,” Hastings says. In other words, keep a paper trail of all financial activity. “People act differently when it comes to money, and all sorts of issues can raise their ugly heads,” she adds.

Don’t Add Your Name to a Parent’s Bank Account

It might seem like the simplest way to manage an account, but putting your name on an account to give you joint ownership can create a range of problems: It could trigger the gift tax or mean that all the money goes to you if your parent dies, when in fact the parent did not intend for that to be the case. It also makes you vulnerable to any creditors or debts carried by your parent and vice versa. “It’s better to have a single account owner with an authorized signer or a power of attorney on the account,” Hastings explains.

Protect Money Against Thieves

The “Managing Someone Else’s Money” guides contain information on avoiding financial scams, which are often targeted toward older Americans. Adding an alert for any account activity to a bank account or credit card, for example, can help notify you of potential problems.

Learn, Follow the Rules — Including State-Specific Ones

If your parent receives government benefits, such as a Veterans Affairs pension or Social Security payments, then that government agency will need to give you authority to oversee those benefit checks. But you would need a separate power of attorney document for the authority to handle the rest of your parent’s assets. “There’s a lot of confusion about that,” Karp says. To help sort it out, the CFPB will soon release state-specific guidelines on managing others’ money to augment its national guide.

In the Hulls’ case, a trust and will that had been put in place before Terrie’s father’s death enabled Terrie to go to court to protect her mother’s remaining money. “Having that legal right given by the parent is key,” Jon says. It’s a big responsibility: When you become the fiduciary for someone else’s money, you are responsible for acting in their best interest and managing their money responsibly, which includes keeping it separate from your own money.

Terrie and Jon Hull now travel around the country giving workshops on preventing the kind of family tragedy they encountered. Terrie says workshop participants often share their own tales of strangers and acquaintances preying on the money of their aging loved ones. “Everyone has a story,” she says.

Kimberly Palmer is a senior editor for U.S. News Money. She is the author of the new book, “The Economy of You.” You can follow her on Twitter@alphaconsumer, circle her on Google Plus or email her atkpalmer@usnews.com.

10 Ways Stay-at-Home Parents Can Make Extra Money

Mom and businesswoman working with laptop computer at home and playing with her baby girl.

Being a stay-at-home parent is a full-time job. Unfortunately, it doesn’t come with a full-time paycheck. As a result, it can be hard for some families relying on just one income to make ends meet or build savings.

However, there are ways for stay-at-home moms and dads to earn a bit of extra cash to supplement the family budget without leaving the house or sacrificing time with the kids. In fact, here are 10 money-making opportunities that can be pursued when your children are at school or asleep, or possibly even when they are awake and demanding your attention. The earnings potential is modest, and not every opportunity will be right for you, but over the course of a year you could pocket hundreds — and possibly even thousands — of dollars.

1. Get Paid for Your Opinions

Taking surveys online can be a relatively quick way to earn enough to afford a few extras. Harris Poll Online, for example, awards points for the completion of online surveys, which can take between five and 25 minutes to fill out. Survey takers accumulate points and can redeem them for gift cards from retailers such as Amazon and Starbucks. Harris Poll Online also runs sweepstakes for survey participants that pay out cash rewards to winners. The top prize is $10,000. Other online outfits that will pay you to take surveys include SurveyClub, Global Test Market and Swagbucks. There’s no cost to sign up.

2. Evaluate Websites

Another way to make extra cash in a short amount time — $10 for about 20 minutes of work — is to sign on with UserTesting and evaluate Web sites. You need a computer with a microphone and Internet connection, and you’ll have to fill out a one-page demographic profile. You’ll receive work if your profile matches that of the target audience of sites being tested. Then it’s just a matter of using UserTesting’s screen recorder, which you’ll need to download to your computer, to record your verbal comments and on-screen movements as you click through a site. Site owners typically are looking for feedback about whether the Web site is confusing to navigate.

3. Serve as an Online Juror

Some attorneys use large panels of online mock jurors to get feedback on their cases before they go to trial. However, the mock jurors must live in the county or federal district where the case will be tried. You can sign up at a couple of sites and receive e-mail notifications if a case is posted in your area. EJury.com pays $5 to $10 per case via the online payment system PayPal. You can’t be an attorney, paralegal or legal assistant — or even related to an attorney — to participate. EJury says you’re likely to have better luck getting picked if you live in a large metropolitan area, where more cases are tried, rather than a rural area. The average case takes about 35 minutes to review. At OnlineVerdict.com, where cases typically take between 20 minutes and one hour to review, fees range from $20 to $60. Payment is made by check.

4. Run Virtual Errands

If you have a computer with Internet connection and are good at searching the Web and communicating with others, you can become a virtual personal assistant with Fancy Hands. The service hires assistants, who set their own hours, to help its users tackle tasks such as making calls to service providers, scheduling appointments, and finding the best prices for services and products. You get paid per task, starting at between $2.50 and $7.

5. Tutor Students

If you have an academic specialty and can squeeze in a couple of hours during the week while Junior is taking a nap or Janie is at gymnastics, share your knowledge with struggling students. Find students looking to improve their grades on your own through your kids’ schools — check a site such as Craigslist.org to gauge hourly rates in your area — or sign on with an online tutoring company, such as Tutor.com. You must be available to tutor at least five hours a week and have a college degree to tutor certain subjects for Tutor.com. Tutoring is done virtually from home via a computer, not in person. Tutor.com tutors are paid an hourly rate based on the subject.

6. Be a Mommy (or Daddy) Blogger

If you haven’t used your free time between changing diapers, washing clothes and shuttling kids around to hop on the blog bandwagon, it’s worth considering this potential source of income. And just because you’re a parent doesn’t mean you have to write about parenting issues. In fact, given that there already are so many blogs about life as a mom (or dad), consider writing about another topic about which you are passionate. The more original, entertaining and informative you are, the more likely you’ll gain followers — and you need an online following to make money.

You can create your blog using a free platform from WordPress.org, but you’ll need to pay a small amount – as little as $4 per month — to have your blog hosted. Try GoDaddy.com, which can provide a domain name for your site, email addresses, database storage and other Web hosting services. To make money, you can use the free Google AdSense service to display advertisements on your site. The amount you’re paid varies by ad and usually depends on how many people see it. There’s also what’s called affiliate marketing, in which you earn a commission (usually less than 10 percent) whenever someone clicks on an ad on your site and purchases a product. The Amazon Associates affiliate program allows you to advertise the retailer’s products on your site, or try affiliate networks such as CJ Affiliate or ShareASale that work with thousands of companies. Depending on how much time you put into your blog and how many people visit it, you could be making a few hundred dollars each month within a year.

7. Get Freelance Editorial Work

Maybe you don’t want the commitment of a blog but like to write or express your creativity. You’re in luck because plenty of media, corporate and nonprofit Web sites are looking for freelancers to write, edit or produce content. Some pay by word, some by the hour and some pay per project. For example, if you register for free with Textbroker.com and submit a writing sample, you’ll receive a rating based on your content quality. Then you can choose which projects you want based on your quality rating and earn 0.7 cent to 5 cents per word, or more.FreelanceWriting.com provides a long list of freelance writing opportunities culled from several top sites. Many of the recent listings offered hourly rates of $25 or more. For $21 a month, you can join Mediabistro’s freelance marketplaceto post your qualifications for review by media managers seeking writers.

8. Profit From Your Photos

If you’re skilled with a camera, you can turn your photos into cash by selling them to stock image sites, such as Shutterstock.com. If the photos you submit are accepted, they can be downloaded by Shutterstock’s subscribers and you can earn anywhere from 25 cents to $120 per image download. Other sites that accept photos from contributors include iStock, Dreamstime and Sqeeqee.

9. Sell Baked Goods

Working parents might not have the time to whip up a birthday cake or cupcakes for school parties. That’s where you come in if you can create tasty baked goods. A friend of mine who is a single mom started making cupcakes as a way to keep herself occupied while staying with her dad when he was undergoing chemotherapy. She posted a picture of her cupcakes on Facebook and instantly received several orders from friends. Now she makes about $200 a month making cupcakes for others who hear about her through word of mouth or see pictures of her cupcakes on her Facebook page.

10. Watch Other Kids Along With Your Own

There’s a good chance your friends who work outside of their homes would be thrilled to have an experienced parent watch their children while they are at the office. It can be manageable if your friend in need has only one or two kids. Plus, the new playmates will help keep your children occupied for a few hours. Pay varies widely based on where you live and the ages and number of kids you’ll be watching, but babysitters and nannies typically can make up to $10 an hour in small cities and much more — even double that hourly rate — in larger cities.

What You Need to Know About Statutes of Limitation for Debt

 

If you have old unpaid debts, it can be helpful to know the statute of limitation that applies to those debts. If the statute of limitation has expired, a debt is said to be “time-barred,” and a creditor or debt collector isn’t supposed to sue you to collect. Here are the seven most common questions we’ve received from readers about this topic.

1. How Long Is the Statute of Limitation for My Debt?

The time period typically either starts when you fall behind on a debt, or from the date of your last payment, and the length of time depends on state law for that type of debt. This chart is a guide to state statutes of limitation. Unfortunately, it is not always clear-cut. So it’s a good idea to check with your state attorney general’s office, a consumer law attorney or legal aid, especially if you are being threatened with legal action.

2. Does the Statute of Limitation Stop Debt Collectors?

In many cases, no. However if you tell the debt collector not to contact you again, they must stop. It’s a good idea to put your request in writing. Once they’ve received it, they can contact you only to confirm that they have received your request or to notify you of legal action they are taking to collect. In some states, however, trying to collect a time-barred debt is illegal and a creditor who attempts to do so is breaking the law.

3. If the Statute of Limitation Has Expired, Can I Still Be Sued?

It isn’t uncommon at all for consumers to be sued for time-barred debts. If you are sued for an old debt and the statute of limitation has expired, you can raise the expired statute of limitation as a defense against the lawsuit (here are some other debt collection defenses you can use, too). However, many consumers do not appear in court and therefore the creditor or collector gets a judgment against them. That is why you should not ignore a legal notice about a debt, even if you think the debt is too old. A consumer law attorney or bankruptcy attorney can help you figure out how to respond.

4. Should I Pay an Old Debt?

That’s something only you can decide. However, keep in mind that if you pay anything — even a small amount — on an old debt, you may restart the statute of limitation. That’s why it can be risky to pay an old debt if you can’t afford to pay it in full. You could open yourself up to collection efforts, or even a lawsuit, for the entire amount the collector says you owe.

5. Will That Old Debt Still Appear on My Credit Reports?

In many cases, the answer is yes. The length of time that negative information may be reported is governed by the federal Fair Credit Reporting Act. Most negative information can be reported for seven years. The statutes of limitation for most consumer debts, on the other hand, is four to six years. So you could have a situation, for example, where the statute of limitation expired on a debt in four years but the related collection account still appears on your credit reports for another three years after that. Collection accounts can do serious damage to your credit scores. You can get a free credit report summary on Credit.com to see if an old debt is affecting you.

6. I Took Out a Debt and Then Moved. Which State’s Rule Applies?

That can be difficult to answer. Consumers can generally be sued in the state where they took out the loan or the state where they currently live. Sometimes the statute of limitation will be based on the laws of the state described in the contract (in the case of credit cards, that will be spelled out in the credit card agreement).

When it’s not clear which state’s statute of limitation applies, it is often up to the court to decide. In a number of court cases, the statute of limitation that was shortest was applied. But that’s not true in all cases. That’s why it is helpful, if you are being sued for a debt, to consult with a consumer law attorney who can help you understand whether the statute of limitation has likely expired.

7. What Is the Statute of Limitation​ for Court Judgments?

If a creditor or collector has obtained a court judgment there is often a separate statute of limitation that applies to judgments. If you have unresolved debts, be sure to at least get your free annual credit reports to see if any judgments are listed. In many states, that time period is 10 years or longer, and judgments may be renewed. Learn more about how about judgments work here.

For Long-Term Auto Loans, How Long Is Too Long?

 

man taking car key

Here’s a disturbing question — which lasts longer: the typical U.S. marriage or the average American car loan? According to The Economist, the average U.S. marriage lasts eight years. While six-year car loans are typical, eight year — and even longer — loans are growing in popularity. Experian says one-quarter ofvehicle loan terms fell between 73 and 84 months last year, compared to just 11 percent of loans in 2008. So yes, car loans are beginning to give marriage a run for its money in the longevity department.

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The most common term on new or used vehicles is the 72-month loan, comprising about 40 percent of the credit market. That’s a substantial shelf life longer than the 36-month loan that launched the automotive finance industry. But Melinda Zabritski, senior director of automotive credit at Experian Automotive, says extended-term loans are not necessarily a bad thing. “Consumers tend to be monthly payment buyers,” she said. “To keep that payment low, … spread that payment out over a longer period.”

Zabritski admits that you will pay more interest over the life of the loan, but she says consider the difference between the average rates on a typical loan amount at a 60-month term versus a 72-month loan: “You might only pay $500 or $600 more over the entire life of that loan but you’ll save $50 or $75 a month. So the breakeven point comes pretty darn quick.”

But average car loans are up nearly $1,000 from one year ago, to $28,381 — the highest on record, according to Experian. The typical interest rate on a new vehicle loan was 4.5 percent, as of the fourth quarter of 2014. Put those factors together and the average monthly payment for a new vehicle hit $482, another record high.

Not only are vehicles more expensive, but consumer buying patterns have shifted, too. Entry-level crossover utility vehicles became the most-registered vehicle last year, followed by full-size pickup trucks, the usual top dog. During the recession, small economy cars were most sought-after by consumers though now, with the economy rebounding, Americans are upsizing again.

What About That Loan?

Zabritski says the most important factor to consider is: How long do you really plan to keep that car? Experian says the average length of initial ownership is 93 months — almost eight years. Apparently we keep our cars about as long as our spouses. But when consumers put little or no money down and then keep a vehicle for just three years, it’s easy to owe way more than the vehicle is worth when looking to trade.

“The days of buying a new car every three to five years are gone,” Mark Seng of IHS Automotive told CNBC in a recent interview. “With vehicles lasting longer and having more technology, buyers are clearly willing to own their cars six or seven years, often longer. The one risk for buyers taking out seven-year auto loans is the chance they’ll be upside down and owe more than their vehicle is worth if they try to sell it before the loan is paid off.”

Edmunds, the automotive research firm, notes that the average trade-in age for a car in 2014 was six years. “It’s not what you’d call an enduring relationship,” Ronald Montoya, Edmunds consumer advice editor, wrote in a blog post. “If you have a 72-month loan and get the itch to buy a new car around the average six-year mark, you wouldn’t have enjoyed any time without payments, which diminishes the point of car buying in the first place. At that point, you’re better off leasing the car.” And leasing is gaining popularity, accounting for nearly 30 percent of all new vehicles financed, according to Experian.

Resale Value an Issue

But Edmunds senior consumer advice editor Philip Reed notes another drawback to extended-term loans: resale or trade-in value.

“As a car depreciates, there are times when it depreciates steeply and other times when it’s fairly flat,” he said. “And you would like to trade it in at the end of a flat period rather than in the middle of a steep decline.” He admits that every car is different in the manner in which it retains its value, but there are certain benchmarks to be aware of. “I would say that once you get past the five-year mark, not only is it depreciating quickly but you are also probably exceeding 100,000 miles.” While that may not trigger a great deal of additional depreciation, he says it is “certainly a psychological barrier for many car shoppers.”

If you’re committed to long-term ownership and think an extended-term loan will work for you, Zabritski says it’s important to shop rates and lenders before making a purchase. And remember, interest rates typically increase along with a loan term.

“We always recommend for folks to go ahead and look at getting prequalified with their own banking institution — credit union, bank or whatever — so that when they go to the dealership they are armed with that information to know what’s a good deal when it comes to obtaining a loan,” she says

Before You Jump Into Real Estate, Know the Risks

 

Hispanic couple outside home with sold sign

Should I invest in real estate? With property values rising once again in many parts of the country, that’s a question many investors might be asking.

The short answer is that real estate can play an important role in an investment portfolio. As an asset class, it typically does not move in the same direction and at the same time as stocks and bonds, so it can provide valuable diversification.

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However, it’s important to understand its risks. Purchasing an investment property is a cash-intensive and time-consuming commitment, while investing in real estate equities puts you at the mercy of outside forces, like rising interest rates.

For most investors, putting between 5 and 6 percent of their portfolio in real estate assets, such as REITs, might be the most practical way to gain exposure to and diversification from real estate as an asset class.

If we’ve learned anything from the last real estate boom-and-bust cycle, however, as the real estate market heats up, offers to invest in property in one form or another become more frequent. Tempting as it may be to redirect a part of your nest egg to a “big opportunity,” investors should refrain from doing so without knowing all the risks and costs involved.

Direct Real Estate Ownership

One of the allures of real estate is that it’s tangible, unlike stocks and bonds. For investors who like the idea of being able to see their investment and those who prefer to be hands-on, direct real estate ownership might be an option to consider.

Direct real estate ownership comes in many flavors, from buying a rental property to purchasing a residential home with the goal of fixing and selling for a higher price. Both scenarios require substantial holdings costs.

Risks: This type of investment typically requires cash flow, and the returns do not happen overnight. The mortgage and taxes on a house do not disappear if you fail to rent it out for a period of time, or if it languishes on the market. “Most people think real estate goes up in value and you get rich,” says Leonard Baron, who has been involved in the real estate business as a landlord, property manager and investor, for more than two decades. “The reality is, many people subsidize real estate for years and years.”

Private Real Estate Deals

A private real estate deal entails investing in someone else’s property, whether it’s an undeveloped piece of land, a rental property, or financing a fix-and-flip operation. This might be appealing to those who like the tangible nature of real estate, but would prefer not to carry all the risk of sole ownership.

With this type of investment, the investor shares in the profit; if they are acting as a lender, they receive an interest payment for a set period of time and a balloon payment when the investment term ends. Such investment deals are typically more readily available to people who work in the real estate business, or simply run in those circles. The risks, however, can be substantial.

Risks: You are at the mercy of the savviness of the property developer or owner, Baron says. Before jumping in, make sure you know the person and his or her investment history well, as well as all the details of the deal. Do a deep dive on the developer or landowner’s track record, finances, and credit before investing, and consider using the services of a real estate attorney to draw up contracts and any other necessary paperwork.

REITs

For investors who don’t want the headaches and risks that come with owning investment properties, real estate investment trusts, or REITs, offer a hands-off approach.

A REIT is a publicly traded company that invests in real estate either through purchasing properties, or by buying pools of residential or commercial mortgages. Unlike most publicly traded companies, REITs are required to distribute 90 percent of their earnings to their shareholders, making them highly attractive to income-seeking investors. In a recent analysis of more than 350,000 investor portfolios, San Francisco investment firm SigFig found that investors over the age of 55 are nearly three times more likely to own REITs than investors age 35 or younger.

Risks: In a rising interest rate environment, the net asset value of a REIT could decline as its costs of borrowing rise, says Kathy Kristof, author of Investing 101. Investors should also be aware of the costs and tax implications typically associated with REITs.

Lumber Liquidators CEO Quits, Catching Company Off Guard

Justice Dep't To File Criminal Charges Against Lumber Liquidators
NEW YORK — Lumber Liquidators CEO Robert Lynch has abruptly quit the company that is embroiled in an investigation over products imported from China.

Shares tumbled 15 percent in morning trading Thursday.

The company said Lynch resigned “unexpectedly” and declined to provide more details on the resignation when asked by The Associated Press.

The company earlier this month said that it had suspended the sale of all laminate flooring made in China after disclosing that the Justice Department is seeking criminal charges against it. At the time Lumber Liquidators said that it decided to suspend the sales while a board committee completes a review of its sourcing compliance program.

Week’s Winners and Losers: Hot IPO, Hard Times for Hardwood

A Lumber Liquidators Holdings Inc. Store Ahead Of Earnings Figures 551744945

There were plenty of winners and losers this week, with a new e-commerce company soaring by better than 50 percent on its first day of trading and one of this year’s biggest losers getting slammed again after the abrupt resignation of its CEO.

Take-Two Interactive (TTWO) — Winner

We’ve seen some video game companies and most mobile gaming specialists falter lately, but Take-Two Interactive was playing to win with its latest quarterly report. The company behind “Grand Theft Auto” and “Bioshock” had a blowout quarter where adjusted revenue soared 83 percent since the prior year’s period. A new game and the success of “Grand Theft Auto V” on PC helped fuel the surge in revenue.

Take-Two’s bigger surprise came on the bottom line. It came through with an adjusted profit of 49 cents a share. Analysts were settling for just 27 cents a share in earnings.

Lumber Liquidators (LL) — Loser

Things just keep getting worse for the hardwood flooring retailer. Shares of Lumber Liquidators hit a new 52-week low after its CEO stepped down. It seemed as if the chain was starting to get back on its feet after announcing that it would no longer sell China-sourced laminates earlier this month.

Lumber Liquidators has been reeling since a “60 Minutes” report in March claimed that some of the retailer’s laminates from China contained harmful levels of formaldehyde. It’s not the first time that Lumber Liquidators has drawn attention for the wrong reasons, but having its CEO unexpectedly step down now is not going to inspire the confidence of investors.

Salesforce.com (CRM) — Winner

Salesforce.com was the subject of buyout chatter earlier in the month, and if someone still wants to snap up the fast-growing provider of cloud-based enterprise software solutions, it’s going to have to pay up.

Salesforce.com posted better-than-expected quarterly results Wednesday, boosting its guidance along the way. At least seven different analysts boosted their price targets on the stock following the report. Salesforce.com is feeling pretty confident, even bragging about some of the customers it’s been winning over from rival platforms during Wednesday night’s earnings call.

Carl Icahn — Loser

It’s hard to call Icahn a “loser” without realizing that he is a winner in life. The activist trader is a billionaire, largely on savvy trades and activist positions that he has taken over his nearly eight decades of life.

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However, Icahn did get caught in a rare stumble this week. He kicked off the week by publishing an open letter to Apple (AAPL) CEO Tim Cook on why the stock will hit $240. It’s an ambitious target for the world’s most valuable consumer tech company, assuming that it will nearly double in value. He’s entitled to his opinion, and he’s already made a huge paper profit on the investment. However, part of his valuation argument is that Apple will be rolling out full-blown high-def televisions next year. The open letter was released just as a Wall Street Journal story was pointing out that Apple had quietly abandoned plans to enter the HDTV market.

Shopify (SHOP) — Winner

The IPO pipeline is still gushing. Shopify went public Thursday. The e-commerce provider priced its offering at $17, and it wasn’t enough. The stock closed 51 percent higher on its first day of trading.

A whopping 165,000 small and medium-size businesses rely on Shopify’s cloud-based platform to help them design, set up, and manage their stores across multiple sales channels. Shopify isn’t profitable, but revenue more than doubled last year. Investors will forgive red ink if it’s being sacrificed for the sake of strong growth.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Apple, Lumber Liquidators, Salesforce.com and Take-Two Interactive. The Motley Fool owns shares of Apple and Lumber Liquidators. Try any of our Foolish newsletter services free for 30 days. Looking for a winner for your portfolio? Check out The Motley Fool’s one great stock to buy for 2015 and beyond.

Market Wrap: Stocks End Lower on Fed Rate Hike Forecast

Financial Markets Wall Street

NEW YORK — U.S. stocks ended weaker Friday after Federal Reserve Chair Janet Yellen indicated that the central bank was poised to raise interest rates this year, in line with Wall Street’s expectations.

Lackadaisical trading volume during the session ended a week of slow activity that has left many investors unconvinced that recent record-high levels are likely to last.

In a speech, Yellen said a rate hike would be warranted this year if the economy keeps improving as expected. She also said it would take several years to return to normal interest rates.

Investors have enjoyed an extended period of low volatility and steady gains, but with the Fed on track to raise rates this year and major indexes near records, the market could get a bit choppier in coming weeks.

I think this is probably the most telegraphed Fed liftoff in some time.

“I think what Janet Yellen and all of the Fed officials have been doing is very carefully choreographing their move. I think this is probably the most telegraphed Fed liftoff in some time,” said Bruce Zaro, chief technical strategist at Bolton Global Asset Management.

“They’re concerned about the markets’ reaction.”

The Dow Jones industrial average (^DJI) fell 53.72 points, or 0.3 percent, to end at 18,232.02 points.

After trading near flat for most of Friday, the Standard & Poor’s 500 index (^GSPC) lost 4.76 points, or 0.2 percent, to close the week at 2,126.06. The Nasdaq composite (^IXIC) dropped 1.43 points, or less than 0.1 percent, to 5,089.36.

Both the Dow and the S&P hit new records this week but Friday’s drop left the Dow in the red. For the week, the Dow ended 0.2 percent lower and the S&P rose 0.2 percent.

The Nasdaq added 0.8 percent for the week.

Volume on U.S. stock markets has been below the month-to-date average for several sessions. Ahead of the Memorial Day long weekend, about 4.9 billion shares changed hands on U.S. exchanges Friday, below the 6.2 billion average this month, according to BATS Global Markets.

All of the 10 major S&P 500 sectors ended lower, led by a 0.8 percent drop in thetelecommunication services index.

Stocks In the News

Shares of Microsoft (MSFT) lost 1.1 percent after CNBC reported the company held significant talks to buy cloud software heavyweight Salesforce.com (CRM) but failed to agree on price. Salesforce rose 2.88 percent.

Boeing (BA) shares fell 1.72 percent to $144.81 after The Wall Street Journal reported that Bombardier was considering a third model of its CSeries jetliner.

Consumer prices moderated last month, data showed, but the so-called core consumer price index, which strips out food and energy costs, posted its largest gain since January 2013.

The dollar rose to a 3½-week high against the euro and U.S. bond yields rose after the stronger-than-expected rise in core consumer prices.

NYSE declining issues outnumbered advancing ones 1,922 to 1,085, for a 1.77-to-1 ratio; on the Nasdaq, 1,566 issues fell and 1,177 advanced, for a 1.33-to-1 ratio favoring decliners.

The S&P 500 posted 27 new 52-week highs and 3 new lows; the Nasdaq composite recorded 71 new highs and 36 new lows.

With additional reporting by Lucia Mutikani, Tanya Agrawal and Ryan Vlastelica.

Anybody Want a Free iPhone 6? (Hint: There’s a Catch)

Citi Still Stressed

 

Has Citi (C) got a deal for you!

No, seriously. Has Citi got a deal for you? Because they certainly think they do, and it comes in the form of a pitch that’s certain to grab eyeballs — and maybe more than a few new credit card customers.

As described in the company’s recent press release, co-authored by partner AT&T (T), if applicants for Citi’s new AT&T Access More credit card purchase a new iPhone 6 (or other smartphone) by putting it on their card, after using the card for a few months they’ll get a credit from Citi for the cost of the iPhone 6.

Abracadabra — a free iPhone 6!

Terms and Conditions May Apply
But mind the fine print. As described on its website, Citi’s “new phone offer” works like this:

  • Step 1: Apply for and receive an AT&T Access More Card issued by Citi.
  • Step 2: Buy a new smartphone from AT&T’s website via a provided link, “at full price and with no annual contract.” You can put your new phone on your card as your very first purchase, or you can wait to buy it later.
  • Step 2.1: Activate your new phone through AT&T and keep your account active for at least 15 days. (You’ll have to pay all the usual service fees and taxes for phone service.)
  • Step 3: Use your new card to keep shopping until you’ve racked up $2,000 in purchases. Make sure to hit this limit within three months of opening your account.
  • Step 4: Once you’ve hit that $2,000 limit, you’re golden. Citi will credit your card account for the cost of the phone — up to $650.

“Um … I’m Not Reading ‘iPhone 6’ Here Anywhere …”

Don’t worry about that. On AT&T’s ordinary webpage for buying no-contract smartphones, there’s no iPhone 6 listed (they top out at iPhone 5s, plus some nice Samsungs), but I’ve confirmed with AT&T by email that, yes indeed, Virginia, you can use the Access More card offer to get a new iPhone 6 as well. And according to Apple’s (AAPL) website, the no-contract retail price of an iPhone 6 is $649, giving you one whole dollar of breathing room between the price AT&T will charge and the $650 that Citi will reimburse you through this offer.

Sounds Like a Good Deal. Is It?

If you’re in the market for a new phone, and don’t want the hassle of a contract, it is. Compare Citi’s new phone offer to, for example, the most recent “bonus points” offer that’s showing up on Slickdeals.net as of this writing. This is for the Chase Ink Cash Card from JPMorgan Chase (JPM).

Like the Access More deal, Chase requires you to spend a certain amount of money within a certain amount of time in order to earn a bonus. Unlike Citi’s offer, however, Chase is requiring you to charge $3,000 within three months in order to earn a $300 cashback bonus. Put another way, Chase requires that you spend 50 percent more to get less than half the reward Citi offers.

True, not all card issuers are as stingy with bonuses as Chase is with this offer. (Not even Chase. They routinely post offers worth as much as $500 cash back, for example, on various cards.) But $650 in value for $2,000 in purchases? That’s a 32.5 percent profit in just three months or less — a very nice return on your investment. (Certainly more than you could earn by putting $2,000 in a Citi or Chase bank account.)

Mind the fine print

To make the most of Citi’s offer, however, it’s important to keep track of the details. For example: Don’t get greedy. Citi says you can’t apply for the $650 phone credit if you’ve opened or closed an Access More account in the past 18 months. Read between the lines, and this means you can use this offer to pick up a free iPhone 6 every 18 months. (Albeit, in 18 months, we may be up to an iPhone 8 — and this offer might have expired.) Do make sure you wait the entire 18 months, though. Else you could find yourself stuck with an extra card you don’t need — but no extra phone to go with it.

Note, too, that the Access More card charges a $95 annual fee (with which come benefits such as three “ThankYou Points” earned for every $1 you spend on certain purchases). Arguably, this reduces the value of the “free” phone offer to $555 from $650.

This is in contrast to a similar Citi card, dubbed simply “Access,” which charges no fee, and credits you at most two points for every $1 you put on the card. Importantly, though, the fee-less “Access” card isn’t part of the free phone offer. To get the free phone, you need to sign up for the marquee product.

Or put another way, if you want a “free” phone, you’ll need to both “Access More” — and pay a bit more as well.

Motley Fool contributor Rich Smith has never owned an iPhone — but now he’s tempted to. He has no position in any stocks mentioned, but The Motley Fool recommends Apple, and owns shares of Apple, Citigroup, and JPMorgan Chase. Click here to check out our free report for one great stock to buy for 2015 and beyond.

Wall Street This Week: Surface Surfaces, Take-Two Takes Four

Germany's CeBit Tech Show

From a new high-end Windows tablet hoping to gain some traction with a new release and a new accessory to a publisher of edgy video games likely posting strong year-over-year growth, here are some of the things that will help shape the week that lies ahead on Wall Street.

Monday — Game On

The new trading week kicks off with Take-Two Interactive (TTWO) posting quarterly results. This is the video game publisher behind the “Grand Theft Auto” and “BioShock” franchises. Its performance tends to slip between “Grand Theft Auto” releases, but analysts see a strong report this time around.

Take-Two’s releases during the quarter — its fiscal fourth quarter that ended in March — included “Evolve” and “Grande Theft Auto V” for the PC. Take-Two’s computer-based games may not be as popular as its console-based releases, but it should still be a big quarter of growth compared to the prior year’s more ho-hum release slate.

Tuesday — The Etsy Bitsy Spider

Etsy (ETSY) was one of last month’s hottest IPOs. The online marketplace for arts and crafts priced its offering at $16, and it nearly doubled on its first day of trading. Things have cooled off dramatically, and Etsy has surrendered a third of its value since its opening day close of $30.

The biggest setback for Etsy since going public last month is the revelation that major brands are angry at the large amount of counterfeit goods being exchanged on the marketplace. Etsy knows how to draw a crowd. It had 1.4 million active sellers and 19.8 million active buyers when the year began. On Tuesday it will deliver its first quarterly report as a public company. One can expect the counterfeit issue to come up during the subsequent conference call.

Wednesday — Tweetie Pie

Domino’s (DPZ) is offering a new way to let the hungry grab a pizza, rolling out a “tweet-to-order” system on Wednesday. Social-media-savvy customers will be able to hop on Twitter (TWTR) and place an order for a pie by merely tweeting the order to @Dominos.

It gets better. Registered Domino’s customers with set pizza preferences can simply order by tweeting a pizza emoji to Dominos.

Pizza delivery chains have been at the forefront of new ordering technology for years. From mobile apps to ordering right from DVRs and set-top boxes, the leading chains know that millennials crave seamless ways to square away their next meal.

Is your Twitter feed about to get slammed with friends tweeting pie requests to @Dominos? Probably not. Domino’s is likely to generate more publicity than orders with this move. However, free promo is better than paying for publicity. Well played, Domino’s.

Thursday — These Tablets Do Windows

Microsoft (MSFT) starts taking pre-orders for its Surface Pro 3 on Thursday. The high-end tablet runs Windows, and its spec sheet is powerful enough to serve as both a tablet and a laptop. The new generation of Surface Pro devices also works with the new Surface Pen that packs pressure sensitivity to create a more natural writing experience on the touchscreen.

Microsoft may not generate the same kind of buzz with Surface Pro 3 as the iPad does when a shiny new model rolls out, but Microsoft has done a good job of improving the product line as it lowers the price. The Surface Pro 3 starts at $799.

Friday — Soupy Sales

The week closes out with Campbell Soup (CPB) posting quarterly results. Analysts see the food giant behind Pepperidge Farms baked snacks, V8 veggie beverages, and its namesake soups posting $1.93 billion in revenue for the quarter, just shy of the $1.97 billion it poured out last year. Wall Street pros also see a sharp year-over-year drop in earnings, and that should find Campbell trying to explain how it will turn its performance around.