Staff Editor

The career moves that waste the most money

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It might sound silly to think of money you never had as a waste. But it’s true. If you deserve a raise but don’t ask for one, or if you don’t negotiate your salary when you’re deciding whether to accept a new job, you’re losing money.

Three in five workers didn’t negotiate their job offers. Pro tip: You never want to be the first one to give a number. Let the person making the offer tell you the salary range for the position first, then ask to think about it and make a counter offer.

This is especially true for women, who tend to negotiate less than men do. In 2016, women working full time were paid just 80% of what men were paid. Men are 41% more likely to be in management and executive roles, and 20% of women believe gender has contributed to a missed promotion or raise.

If you’re applying for a new job, make sure you’re using your network. Sixty percent of people said they have referred someone for a job, and 35% said they got a job through a referral. This is pretty good news for people who hate cover letters, because 47% of job applicants said they didn’t even submit one to get a job.

If you’re asking for a raise, make sure you’ve got your accomplishments and your accolades in order. Practice what you’re going to say to your boss, bring your research to back your request and be confident.

Stock Wealth Surges for the Oldest Americans While the Young Miss Out

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U.S. stocks have more than tripled in value since 2009, but the bull market has left a lot of Americans behind. In almost every age group, the share of families owning equities—either directly or through funds and retirement accounts—declined from 2007 to 2016, according to the Federal Reserve’s most recent Survey of Consumer Finances. There’s one prominent exception: households headed by someone 75 or older.

Almost 49 percent of those households own stocks, up from 40 percent in 2007, just before the financial crisis, and about 35 percent in 2013, as many Americans were still recovering from the wreckage. It’s the highest number since the Fed began its triennial report on Americans and their money in 1989.

The top rate of stock ownership, 58 percent, is among families headed by people 55 to 64, just before traditional retirement age. Retired investors have historically been conservative. While stocks can provide larger returns over the long term, they’re prone to dramatic crashes—like the more than 50 percent drop in the 2007-09 bear market—and an octogenarian doesn’t have decades to wait for a rebound. Retirees often rely on their investments for income and emergency expenses. But the numbers suggest a generational change: Americans who have relied less on traditional pensions and more on 401(k)s and individual retirement accounts are aging into the 75-plus group.

Financial advisers say there’s also a particular reason some retirees are choosing stocks now. “There’s a lack of alternatives out there,” says Austin Frye, a financial planner at Frye Financial Center in Aventura, Fla. Yields on bonds are at near-record lows, while the most generous banks pay savers  rates of barely 1 percent per year. As a result, dividend-paying stocks have  become popular among seniors because they generate income.

Older investors don’t necessarily deserve their reputation for being cautious and risk-averse, says John Grable, a professor of financial planning at the University of Georgia who studies risk tolerance. They “often have more knowledge, experience, and a wider perspective than others,” he says. Almost all investors remember the tech bubble and the financial crisis. Seniors also remember the roaring bull markets of the ’80s and ’90s. Frye says his older clients are “very comfortable with stocks because they’ve been investing in them for a lifetime.”

The elderly have also had more time to build up a nest egg, giving some of them “the financial resources to withstand a potential loss,” Grable says. The wealth gap between the oldest and youngest Americans widened to the largest on record in 2016, with the typical household headed by someone 75 or older boasting a net worth more than 24 times that of one headed by a person under 35.

Why are younger Americans less likely to own stocks today than in 2007? Part of the blame may go to the lingering trauma of the financial crisis. But workers have also faced a sluggish pace of wage growth throughout the economic recovery. That, combined with record levels ofstudent debt, has made it difficult for young households to save and invest at all. While median wealth for the oldest cohort of Americans is up 7 percent from 2007, it’s down 20 percent for the youngest, after adjusting for inflation.

As a group, the oldest Americans now have an unprecedented amount of wealth, which many are eager to pass on to future generations of their families. If a retiree’s goal is passing on an inheritance or giving to charity, taking risks in the stock market may be appropriate. For many seniors, however, leaving a legacy ought to be a secondary goal to providing for their own livelihood, says Allan Roth, a financial planner at Wealth Logic LLC in Colorado Springs. And he warns that too many older Americans are placing a dangerous bet by loading up on stocks. “It’s a very risky world,” says Roth. At some point, “markets are going to plunge,” he says, and there’s no guarantee that they’ll recover as quickly as they did after the last two crashes.

4 tough but essential money questions all couples should discuss before tying the knot

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It’s the most popular time of year to pop the big question as 18% of all engagements occur in December, according to Weddingwire.com. But before changing your relationship status, it’s important to understand one another’s financial status. Here are four tough but essential money questions all couples should discuss before tying the knot.

Are you a spender or a saver?

You might think you already know your future spouse pretty well, but you can uncover a lot when you openly discuss your salaries, debts, savings and spending habits. Don’t spring this conversation up out of nowhere—set up a time to start discussing things like credit scores, checking account balance and how much credit card debt you have.

Remember, it’s not a competition but a conversation that will help manage expectations. “You’re a team now and you flourish when your spouse flourishes. Equal is not the same as equitable, as both of you will be pulling your weight in different ways,” says Julie Ford, a certified financial planner and founder of Ford Financial Solutions.

What are your financial obligations?

Talk about your financial responsibilities such as child support, alimony, an aging parent or student loans. With student debt at an all-time high, it’s likely you have loans you’re bringing into the marriage, so think about how you would like to handle the debt together or separately. Ford says that paying off the debt together can help create unity and a clean slate more quickly than if one person is struggling with it alone. “It’s no longer yours and mine, but ours. This doesn’t mean there’s no independence. It’s more about a mental shift and recognizing that your good is attached to his/her wellbeing.”

In most cases, a spouse is not legally responsible for his or her partner’s student debt acquired before the marriage. But if one of you defaults on your loans, both of you could have your tax returns garnished.  “When debt is foreign to one party, create a plan to pay it down and live within your means with no shame and no blame on both sides. The upside to having debt is that it forces your spending down. Once that debt is paid off, you can immediately start saving the amount that would’ve gone toward the debt payment,” says Ford.

Will we merge our money in marriage? If so, how?

There’s no wrong or right way to do this. It might make the most sense to set up a joint account, keep things separate or do a combination of both. In one study by TD Bank, 42% of those in relationships who have joint accounts also kept their own accounts.

On a personal note, before I got married to my husband, we were at odds with exactly how to go about merging our financial lives. It got so difficult that we decided to seek out some pre-marital counseling from a professional to work through it. Sorting through our financial fears helped us become more transparent before marriage. As our counselor said: If we can’t talk about it before marriage, it’ll only get tougher during marriage.

Should we sign prenups?

These days more and more millennials are entering marriage with prenuptial agreements to protect their assets, retirement accounts and investments. Prenups can be especially wise for couples who are blending families and/or getting married for a second or third time. A prenuptial agreement guards pre-marital assets in the event of divorce or death and protects any future income and assets that you might acquire during the marriage.

But not everyone needs a prenuptial agreement, and there are drawbacks to consider, including the romantic toll it can take, so seek the help of certified financial advisor before moving forward.

Don’t forget: Money issues are one of the top reasons for divorce. Not talking about your finances is like shooting yourself in the foot before you walk down that aisle. So tidy up your finances before you tie the knot.

Should You Pay Off Your Mortgage Before Retirement?

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Owning a home can lead to a comfortable retirement. In theory, you buy a house when you’re 30, faithfully make the mortgage payments for 30 years and at age 60 you own your house, free and clear. Now you have a solid nest egg and can sail into a worry-free retirement.

But more often, here’s how it works in practice. You move from a starter home to a bigger house, with a bigger mortgage. You refinance to get a lower interest rate and take out some money in the process. And at age 60 you’re still paying a mortgage.

[See: 10 Ways to Reduce Your Housing Costs in Retirement.]

According to the Federal Reserve Board, over a third of homeowners ages 65 to 74 are still burdened with monthly mortgage payments, with an average balance of $118,000. You might have that amount or more in a 401(k) plan. Is it worth it to draw down your retirement savings, and perhaps sell off other investments, to pay off your mortgage? The answer depends on your individual situation. Here’s how to decide whether to pay off your mortgage before retirement:

When to Keep Your Mortgage:

You don’t have enough money. If paying off the mortgage will make you cash poor and unable to cover your bills, then don’t do it. As far as debt goes, a mortgage is about the best loan you can have.

The money is tied up in other investments. Even if you do have the financial resources to pay off your mortgage, it doesn’t make sense if the money is already invested in solid assets that generate income and appreciate over time. Also, if you have large unrealized capital gains and would be hit by a big tax bill, it’s probably not worth it. Remember, money coming out of an IRA or 401(k) is typically subject to personal income tax.

You have other loans. A mortgage carries a lower interest rate than most other loans. So if you’re carrying a credit card balance or have other high interest debt, pay that off first.

You think inflation is coming back. Housing prices rise with inflation. With a mortgage you capture the increase while paying back the loan in ever-cheaper dollars. Also, interest rates typically rise with inflation, but you benefit from a mortgage fixed at a lower rate, at least for a period of time.

You’re still working. Those who are still on the job might be better off building an emergency fund to cover life’s sudden surprises and contributing the maximum amount to an IRA, 401(k) or other retirement account.

[See: 10 Tips for Finding a Great Place to Retire.]

When to Pay Off Your Mortgage:

You have a lot of cash. If you have extra money sitting in a money market fund or low interest bank account, it makes sense to use it to retire a higher interest rate mortgage. Bonus: With no mortgage your monthly bills are lower.

You have access to a home equity loan. You don’t need a lot of cash on hand if you can access money if you need it for a major expense, such as a medical bill or home improvement. You also have the fallback option, later on, of taking out a reverse mortgage.

You can’t take advantage of tax savings. If you don’t itemize on your taxes, you miss out on the mortgage tax deduction. This makes your mortgage more expensive and may tip the balance toward paying it off. The new tax plan working its way through Congress may increase the standard deduction and limit the mortgage deduction, which may wipe out your real estate tax savings anyway.

[See: 10 Places to Retire on a Social Security Budget.]

You’re looking for peace of mind. Paying off your mortgage is like making a risk-free investment, with no management fees. If you have a 4 percent mortgage you’re getting a 4 percent return, compared to barely 2 percent on a risk-free Treasury bond. Besides, knowing your house is paid off could help you sleep better at night. Of course, as a homeowner you still have to pay real estate taxes, utilities and maintenance. But you can delay repairing a cracked window a lot easier than you can put off the bank.

You want to set up a comfortable nest egg. A house is a big asset. It’s yours to live in, share or leave to your kids. And if you decide to downsize, the profit from the sale of your house goes to you, not the bank or the government, thanks to favorable tax treatment of capital gains from a primary residence.

Why the FCC chair says social networks are the real threat to the free internet

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The Federal Communications Commission chairman who wants to hit the Delete key on the FCC’s current net-neutrality rules has one thing to say to his critics: Why the long face?

FCC chair Ajit Pai made his case for repealing the open-Internet rules championed by his Democratic predecessor Tom Wheeler at an event in Washington hosted by two free-market-minded groups, the R Street Institute and Lincoln Network.

Part of Pai’s argument consisted of a reasonable point: Are any providers seriously trying to block sites or charge others for priority delivery of their data — the things that net-neutrality rules ban? If they aren’t and won’t, then why not scrap regulations that internet providers say have discouraged them from building out their networks to give customers more choice?

Pai then suggested we stop worrying about what our internet providers might do, even though many of us can’t drop them without switching to far slower alternatives. Instead, he said we should really worry about how social networks treat conservative voices.

Problem? What problem?

Pai did so by verbally jousting with tweets from celebrities angry over his proposal and the possibility that it would let internet providers block or slow sites they don’t like. Think of Kumail Nanjiani warning that “We will never go back to a free internet,” Mark Ruffalo decrying this grant of power to telecom companies as “the Authoritarian dream,” or Alyssa Milano classifying it as “one of the biggest” threats to our democracy.

Pai scoffed at these predictions of doom — “I’m threatening our democracy? “Really?!” — and asked for evidence that internet providers would actually start carving up broadband service similar to cable TV.

In particular, he criticized a graphic of Portuguese mobile-broadband pricing that went viral in a tweet from Rep. Ro Khanna (D.-Calif.) showing surcharges for video, social, music and other categories of apps.

The actual offer, as you can see at Portuguese telco MEO’s site, lets subscribers pay to exempt particular apps from their plan’s data cap. That’s acceptable under current European Union regulations — and under U.S. rules too, as seen when wireless carriers exempted streaming-video services from their data caps under Wheeler’s term.

Yahoo Finance’s parent firm, Verizon (VZ), was among them.

Alternative history

Wiping away the regulations adopted in 2015, Pai said, would take us back to the good old days when internet providers didn’t have to worry about getting a permission slip from the FCC.

“Until 2015, the FCC treated high-speed internet access as a lightly-regulated information service,” he said. “The internet wasn’t broken in 2015.”

But the regulatory foundation Pai says amounts to “Mother-may-I” regulation — Title II, from the Communications Act of 1934 that established the FCC — governed broadband access until 2002, when the FCC let cable ISPs out of it; it freed phone-based digital-subscriber-line broadband three years later. The FCC even used that authority to force phone companies to open their DSL networks to competing ISPs.

The golden age Pai talks up really dates to that 2005 opening up of the rules — after which many telecom CEOs spent a lot of time talking about how they wanted to charge the likes of Google (GOOG, GOOGL) for access to their subscribers. Pai didn’t talk about that.

He did, however, tout the ability of a different regulator, the Federal Trade Commission, to bring cases against providers that don’t disclose favorable or unfavorable treatment of particular sites, or who act unfairly or anti-competitively. Instead of the government telling internet providers how to act, it will go after them when it sees actual harm happen — something another speaker at the event, acting FTC chair Maureen Ohlhausen, pledged to do.

Meet the real enemy: social networks

Then Pai pivoted to suggest the real risk to an open internet was “edge providers” — companies like Google, Facebook (FB) and Twitter (TWTR) that help circulate much of America’s news and debate and can be crucial to making money off it.

“Edge providers are a much bigger actual threat to an open internet,” he said, pointing to examples like Twitter briefly refusing to let Rep. Marsha Blackburn (R.-Tenn.) promote a tweetthat implied that Planned Parenthood sells baby parts (it doesn’t) or Google ruling some YouTube videos from commentator Dennis Prager off-limits to advertisers.

(Google does sometimes make the wrong call about whether a video is “advertiser friendly.”)

Pai also cited the web-security firm Cloudlfare’s unease over being able to decide what goes online. He didn’t mention the case that led CEO Matthew Prince to express this unease: the company’s post-Charlottesville decision to drop the Nazi site Daily Stormer when its leaders claimed Cloudflare supported them. Isn’t firing your customer a business prerogative Republicans support?

Heat and hype

Pai also left out mention of a different sort of racist speech online — the kind directed at him since last week’s announcement, including right outside his house.

”The debate needs, and our culture needs, a more informed discussion about public policy,” was all he said about that. “Hysteria takes us to unpleasant, if not dangerous places.”

He’s right. But that observation goes both ways: Calling this repeal proposal “restoring internet freedom” is its own form of hysteria, since neither his rules nor the old ones say anything about what citizens can say or do online. Consider two things his FCC colleague Mike O’Rielly — who, like Pai, was appointed by President Obama in keeping with the tradition of having both parties represented on the commission — said during the event.

“The light of internet freedom was nearly extinguished.” O’Rielly said of the 2015 vote to enact net-neutrality rules. Then he declared that “We will let facts prevail over hyperbole.”

Well, which one will it be?

Facebook is trying to make it easier to be a better person

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Facebook (FB) wants to make it a little easier to help people with new features that allow people to become a mentor for children, sign up to become a blood donor and help organizations like the Red Cross reach disaster victims faster.

CEO Mark Zuckerberg announced the new features at Facebook’s second annual Social Good Forum in New York on Wednesday.

Of course, while the Social Good Forum is meant to allow Facebook users to give and receive help, it also allows the company to provide a bit of good news during a time that has seen it repeatedly questioned for its role in allowing Russian agents to spread fake news in the run-up to the 2016 election.

Zuckerberg didn’t mention the matter, keeping the discussion to the day’s events, but it’s certainly not an issue that will go away anytime soon.

No transaction fees

The CEO did, however, kick off his keynote by explaining that Facebook will no longer charge transaction fees for donations made to nonprofits through Facebook’s charitable giving program.

“So now, 100% of the money that people donate on Facebook is going to go to the causes they care about,” Zuckerberg explained. “And I know this is something that a lot of you have talked to us about for a while, so thank you for the feedback.”

That’s a big deal, as it ensures your donation, at least when you send it through Facebook, will go directly to the people you want to help. GoFundMe, which is frequently used to raise funds for nonprofit campaigns, charges a 2.9% transaction fee. Of course, Facebook is an absolutely massive operation, so it’s not like those fees will hurt its bottom line.

Beyond cancelling transaction fees, Zuckerberg said the company will make a $50 million annual donation to charitable causes on Facebook.

Community Assistance

The CEO also announced that Facebook is expanding its Community Help tool to organizations like the Red Cross. Community Help, which was announced in February, allows individuals to ask for help when they’re in need, and others to offer help when they can. Zuckerberg explained how two friends from Texas A&M used the feature in the aftermath of Hurricane Harvey to save 20 people from the storm’s floodwaters.

By expanding the Community Assistance to disaster response organizations, Facebook says groups will be able to see when and where people need help and get to them quickly.

Blood donors and suicide prevention

Facebook said it will also expand its new blood donation feature. The current program, which was started in September in India, has already seen 4 million people register as donors. That’s an enormous new supply of blood for an area that Facebook said sees thousands of posts from people asking for blood donations each week.

In 2018, the feature will be rolled out to Bangladesh where there is a similar blood shortage. There’s no word on if the feature will come to the U.S., though.

Zuckerberg also gave the audience an update on Facebook’s suicide prevention initiative. The program, which has saved more 100 people so far, flags posts from individuals who express suicidal thoughts and then uses human moderators to reach out to first responders to help the person in need.

“So, now we’re starting to roll out these tools in most other countries around the world and that’s something that I’m really proud of the work that we’re doing there,” Zuckerberg said.

Mentoring

Finally, Facebook said it is launching a new mentoring and support program. Launching as a pilot with the help of iMentor and The International Rescue Committee, Mentoring and Support will allow people to volunteer as and search for mentors based on their specific needs.

Facebook says that matching mentors and their mentees will be handled by the specific nonprofits, which takes the task out of Facebook’s hands.

The program will also only be open to people 18 and older, which leaves out young people who might need help during their formative years.

“There’s no doubt that we live in a challenging time right now,” Zuckerberg said. “But one of the things that strikes me so much is the deep sense of optimism you all have.”