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Money USA October 2017

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*“Before anyone else” claim is that realtor.com has more MLS-listed for-sale homes nationwide than any competing real estate portal (“more homes”)
and updates its listings at least every 15 minutes on average in most areas (“in real time”). © 2017 realtor.com.
With the Global Dining Collection, you can
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F E AT U R E S
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Fifty towns and small cities that deliver
quality of life, economic opportunity,
and affordability.
BY MARTHA C. WHITE
AND KIM CLARK
BY KAITLIN MULHERE
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PHOTOGRAPH BY TY COLE
OCTOBER 2017
M O N E Y. C O M
EIGHTY SEVEN
The Fidelity Retirement Score.
Another way we’re making retirement planning clearer.
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IMPORTANT: The projections or other information generated by the Fidelity Retirement Score regarding the likelihood of various investment outcomes are hypothetical in
nature, do not reflect actual investment results, and are not guarantees of future results. Results may vary with each use and over time.
The Fidelity Retirement Score is a hypothetical illustration and does not represent your individual situation or the investment results of any particular investment or investment
strategy, and is not a guarantee of future results. Your score does not consider the composition of current savings and other factors.
Guidance provided by Fidelity through the Fidelity Retirement Score is educational in nature, is not individualized, and is not intended to serve as the primary basis for your investment
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The trademarks and/or service marks appearing above are the property of FMR LLC and may be registered.
Fidelity Brokerage Services LLC, Member NYSE, SIPC. © 2016 FMR LLC. All rights reserved. 773775.14.0
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Here’s how.
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Use these tips to recharge.
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Nine secrets from frequent fliers.
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A study of wealthy investors
offers lessons for all.
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There are more flexible ways
to tap your nest egg.
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One surprising way people can
guarantee a richer retirement.
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Airbnb’s Hottest Spots
Uber Drivers’ Income
Favorite Productivity Apps
IN THIS ISSUE
Editor’s Note
Letters & Comments
The Numbers
J W LT D — G E T T Y I M A G E S
Cover photograph by TY COLE
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THE INTELLIGENT INVESTOR
MY MONEY STORY
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It’s never a good idea to time
the market, but you may want
to trim stock exposure, based
on your life stage.
We arrived in the U.S. with
just $700. The next few years
taught me some lessons
about the payoff of hard work.
BY J O H N WAG G O N E R
BY M A R I A S H A R A P OVA
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A NOTE FROM OUR PARTNER
The home featured on the cover is represented by Nicole Peters of Century 21 Scheetz.
As of press time, the home was listed for sale on realtor.com.
In theory this should be a
seller’s market. But things
are getting tricky.
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Tech stocks finally rebounded—
but trouble awaits.
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Shares hit $2,000. Now what?
MONEY (ISSN 0149-4953) is published monthly (except one in January/February) by Time Inc. PRINCIPAL OFFICE: 225 Liberty Street, New York, N.Y. 10281-1008. Periodicals postage paid at New York, N.Y. and additional mailing offices.
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Return undeliverable Canadian addresses to: Postal Station A, P.O. Box 4326, Toronto, Ontario M5W 3H4. GST No. 888381621RT0001. © 2017 Time Inc. All rights reserved. Reproduction in whole or in part without written permission is
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or email help@money.customersvc.com. MAILING LIST: We make a portion of our mailing list available to reputable firms. If you would prefer that we not include your name, please call or write us. PRINTED IN THE U.S.
OCTOBER 2017
M O N E Y. C O M
Introducing the all-new
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®
The all-new 2018 Subaru Crosstrek. The forecast is for safe and sound, with
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Crosstrek. Well-equipped at $21,795.†
Subaru and Crosstrek are registered trademarks. *EPA-estimated highway fuel economy for 2018 Subaru Crosstrek CVT models. Actual mileage may vary. †MSRP excludes destination and
delivery charges, tax, title, and registration fees. Retailer sets actual price. Certain equipment may be required in specific states, which can modify your MSRP. See your retailer for details. 2018
Subaru Crosstrek 2.0i Limited shown has an MSRP of $26,295.
)(-836Ş7
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(IEV6IEHIVW
P H O T O G R A P H S B Y J OYC E K I M ; TAY L O R J E W E L L ( A U R I E M M A )
THERE’S A PIECE OF PAPER in my
office that’s become special to
me. It’s a faded printout of a
blog post published in 2011,
written by a woman who had
just lost her mother and her
baby daughter. She and
her family needed to make
a change, so they moved to
Louisville, Colo.—the town
named that year as MONEY’s best place to live.
“We’re chasing our dreams,” she wrote.
I kept that story in mind as I worked on this issue.
Where you choose to live is an important decision,
one that influences your life in every way. So we had
to make sure to consider as many factors as possible.
This year, our methodology is as robust as ever.
We gathered 170,000 data points about 2,400 places.
And for the first time, we partnered with realtor.com,
leveraging its rich data and understanding of every
E XPLO RE T H E
10 0 PL AC E S
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housing market in the country.
I’m proud that our final list,
which begins on page 54, represents the best of America’s towns
and cities: places that offer
economic opportunity, a sense
of community, and access to
amenities that make life more
enjoyable. But ultimately, your
best to place live is up to you.
I hope the list inspires you to
think about your own dreams,
and what moves you can make
today to help achieve them.
While you’re thinking about
your future, check out our annual
review of the best credit cards on
page 72. MONEY editors scoured
the market for the cards with the
best rewards, lowest fees, and
most generous financing terms.
As long as you’re responsible with
your spending and pay off your
bills on time, these cards can be
great tools to help you reach your
financial goals.
And if you’re keeping an
anxious eye on stocks like we
are, John Waggoner offers some
level-headed advice on page 51
about when it makes sense to
rebalance your portfolio.
Thanks for reading. Keep
in touch.
Adam Auriemma
EDITOR-IN-CHIEF
@adamauriemma
Write
the Editor: editor@moneymail.com
OCTOBER 2017
M O N E Y. C O M
CHIEF EXECUTIVE OFFICER Rich Battista
CHIEF CONTENT OFFICER Alan Murray
EDITORIAL DIRECTOR, NEWS GROUP Nancy Gibbs
DIGITAL DIRECTOR, NEWS AND LIFESTYLE Edward Felsenthal
SENIOR DIRECTOR FOR EDITORIAL OPERATIONS Clare McHugh
MONEY EDITORIAL
EDITOR-IN-CHIEF
Adam Auriemma
DEPUTY EDITORS Rachel F. Elson, Paul J. Lim MANAGING EDITOR Tari Ayala SENIOR EDITOR Mike Ayers AUDIENCE ENGAGEMENT EDITOR Matt Bemer
SENIOR WRITERS Kim Clark, Elizabeth O’Brien, Brad Tuttle WRITERS Alicia Adamczyk, Kristen Bahler, Jennifer Calfas, Megan Leonhardt, Kaitlin Mulhere, Kerri Anne Renzulli, Ian Salisbury
SOCIAL MEDIA WRITER Veronica Quezada DIGITAL PRODUCER Cortni Spearman COPY EDITORS Maria Carmicino, Judith Ferbel, Lauren Goldstein, Kathleen Kent
CREATIVE DIRECTOR Paul Martinez DIRECTOR OF PHOTOGRAPHY Mia Diehl
LEAD ART DIRECTOR Peter Herbert ART DIRECTOR Josue Evilla SENIOR GRAPHIC DESIGNER Julia Bohan
PHOTO DEPARTMENT Sarina Finkelstein, Armin Harris, Kristen Hom, Shayla Hunter
SENIOR VIDEO PRODUCER Kate Santichen ASSOCIATE VIDEO PRODUCERS Mercedes Barba, Katie Meyer
PRODUCTION ASSISTANTS Walter Kelly, Will Linendoll, Claire Nolan
CONTRIBUTORS Carla Fried, Ismat Sarah Mangla, Maria Sharapova, Walter Updegrave, Katie Van Syckle, John Waggoner, Martha C. White, Rob Wile
EDITORIAL INTERNS Gabriela Fernandez, Sergei Klebnikov, Annie Nova ART INTERN Amy Wang PHOTO INTERN Alexandra Scimecca
NEWS AND BUSINESS GROUP
SENIOR VICE PRESIDENT AND GENERAL MANAGER Meredith R. Long
VICE PRESIDENT AND GENERAL MANAGER, NEWS DIGITAL Kurt Fulepp
TIME INC. ADVERTISING SALES
Karen Kovacs (GROUP PRESIDENT); Andrew Reedman, Thu Phan Rodriguez (DIGITAL STRATEGY)
BRAND SALES
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BRAND SALES DIRECTOR, NEWS AND BUSINESS, CHICAGO Leah Root BRAND SALES DIRECTOR, NEWS AND BUSINESS, DETROIT John Wattles
CATEGORY SALES
Lauren Newman (BEAUTY); Ellie Duque (ENTERTAINMENT); Matt Rice (FASHION AND RETAIL);
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Alex DeSanctis (HOME); Nate Stamos (INDUSTRY/GOVERNMENT/TOBACCO/GOLF);
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INTERNATIONAL
Marty Gardner (SENIOR VICE PRESIDENT, FINANCE AND OPERATIONS);
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John Marcom (SENIOR VICE PRESIDENT, BRANDS AND SALES, INTERNATIONAL)
INTERNATIONAL ADVERTISING SALES Khoon-Fong Ang (VICE PRESIDENT, NORTH ASIA);
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MARKETING
SENIOR VICE PRESIDENT, ADVERTISING AND BRAND MARKETING Susan Parkes-Cirignano
CHIEF MARKETING OFFICER, NEWS AND BUSINESS Michael Joseloff
INTEGRATED MARKETING
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ACCOUNT MANAGEMENT Lisa Horstmann CREATIVE SERVICES Orville Clark (CREATIVE DIRECTOR, BRAND MARKETING, NEWS, BUSINESS & SPORTS),
Jess Harrison, Mario Paulis (SENIOR INTEGRATED GRAPHIC DESIGNERS)
LIVE MEDIA
Lisa Cline (SENIOR VICE PRESIDENT); Delwyn Gray (VICE PRESIDENT);
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CONSUMER MARKETING AND REVENUE
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CONSUMER INSIGHT
Andrew Borinstein (EXECUTIVE DIRECTOR); Joel Kaji (EXECUTIVE DIRECTOR); Rachel Lazarus (SENIOR RESEARCH MANAGER)
COMMUNICATIONS
Kerri Chyka (VICE PRESIDENT); Ashley Calame (DIRECTOR);
Kristin Matzen (SENIOR MANAGER); Raina Dembner (MANAGER); Hailey Murphy (PUBLICIST)
FINANCE
Maria Beckett (SENIOR VICE PRESIDENT); Wajeeha Ahmed (VICE PRESIDENT); Arbena Bal (DIRECTOR);
Paula Esposito, Catherine Keenan (MANAGERS); Christopher Santigate (ASSOCIATE MANAGER); Jessica Piro
BRANDED CONTENT SOLUTIONS
Carolina Stavrositu (EXECUTIVE DIRECTOR);
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DIGITAL PRODUCT, DESIGN, AND ENGINEERING
Shameel Arafin, Aleksander Mielczarek, Sean Villafranca
PRODUCTION
Valerie Langston (DIRECTOR); Mieko S. Calugay (SENIOR MANAGER); Sara Decker (ASSISTANT MANAGER); Vishal Prasad (SPECIALIST)
PREMEDIA
Richard K. Prue (EXECUTIVE DIRECTOR); Angel Mass (SENIOR MANAGER)
TIME INC.
CHIEF OPERATING OFFICER AND PRESIDENT Jennifer L.Wong CHIEF FINANCIAL OFFICER Sue D’Emic EXECUTIVE VICE PRESIDENTS Leslie Dukker Doty, Brad Elders, Lauren Ezrol Klein, Greg Giangrande,
Steve Marcopoto, Erik Moreno SENIOR VICE PRESIDENT, HUMAN RESOURCES Roxanne Flores SENIOR VICE PRESIDENTAND DEPUTY GENERAL COUNSEL Steven Weissman ASSISTANT GENERAL
COUNSEL Andrew Goldberg DIGITAL PRODUCTAND ENGINEERING Nicholas Butterworth (SENIOR VICE PRESIDENT) GLOBAL TECHNOLOGY SERVICES Kurt Rao (CHIEF INFORMATION OFFICER)
M O N E Y. C O M
OCTOBER 2017
Even a small donation can make a big difference
HurricaneHarveyAid.org
0)88)67
'311)287
RE: WHAT TO DO IF YOU GET
MEDICAL BILLS YOU CAN’T PAY … [SEPTEMBER]
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EHZSGEXIWEZIH
QI XLSYWERHW
of dollars, not to mention the stress,
when my insurer began rejecting
payments for legitimate medical
bills. She met with me (our first meeting was free), filled
out and submitted paperwork, and handled all the frustrating, time-consuming phone calls. Her fee, much less than an
attorney’s, was tax-deductible and amounted to a very small
percentage of the medical bills. Search “medical advocates”
by state, and find one that is association certified.
BONNIE BRUCCOLERI, SOUTH BRUNSWICK, N.J.
HONORING MERCHANT
MARINERS
I could not agree more
with reader Robert
Blanck’s recent concern
that you did not include
our nation’s service
academies [in “The
Best Colleges for Your
Money,” August]. All his
points are valid. However, he mentioned only
four academies. In fact
there are five: For the
Army, Navy, Air Force,
Coast Guard, and Merchant Marine. They all
deserve equal respect.
D AV I D B E L A N G E R
Northampton, Mass.
OUR FAVORITE COMMENT
D O U G W E I S S , L A K E M O N T, G A .
I’m disappointed only
18% of millionaires
with up to $5 million
and 48% with more
than $5 million donate
more than $5,000 to
charity in a year [“The
Millionaires Club,”
September]. Although
my wife and I are not
millionaires, we plan to
be there someday. My
wife (who has a much
larger heart than I do)
challenges me to invest
not only in our family
but also in meaningful
charity. We need to
remember those who
have helped us along
the way and those who
are in need.
LUCAS DIERINGER
M O N E Y. C O M
Write to MONEY: letters@moneymail.com
“People Think
Teachers Are
Underpaid—Until
You Tell Them
How Much
Teachers Earn”
For those who
believe that
teachers are overpaid,
spoiled with summer
vacations and benefits,
I invite you to switch
professions and become
a teacher yourself … After
all, managing a room full
of teenagers should be
fairly easy.
chuong vü
So many
educational
materials you see in your
child’s room are paid for
by the teacher not the
school. Posters, markers,
flash cards, books,
construction paper, glue,
and a ton of other stuff.
And for older teachers,
working in the summer
isn’t always an option.
I’ve heard some teachers
bartend in the summer,
which is great if you’re 29,
but not when you’re 60.
edward guillen
CORRECTION
[SEPTEMBER] In “How to Get
to $1 Million,” we misquoted
Spanx founder Sara Blakely,
who said,“What I did was start
small, think big, and scale fast,”
not “scale back.”
O R I G I N A L P H O TO, C A R D : YO U N G I D — G E T T Y I M A G E S
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GIVING BACK
RESPONSES TO
A RECENT STORY
ON MONEY.COM
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COLORADO
$133 per night
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Travelers bookmark their favorites, from city
lofts to secluded tree houses. BY J E N N I F E R CA L FAS
on the Columbia River or
a pool house overlooking L.A.,
vacationers all seem to want the
same thing: privacy, beauty, and
affordability.
That’s according to data
from Airbnb, the popular website that allows travelers to veer
off the beaten path—and save a
buck—by renting rooms or entire houses from homeowners
across the U.S. and the world.
Airbnb users have the option
to put listings on a personal
wish list, enabling them to bookmark favorites for a future trip
or maybe just to daydream.
Always curious to understand what travelers, especially
the budget-conscious, really
value, we asked Airbnb to compile a list of the most wished-for
Airbnb listings in each state.
You can view the full list
at money.us/airbnb, and a
selection of our favorites are
pictured here.
M O N E Y. C O M
While some listings drew
far more attention than others,
several shared themes of seclusion, easy access to nearby wilderness, and unique architecture. Many Airbnb users seem
to want to get off the grid—
whether that’s by climbing up
to a tower surrounded by
160 acres of private land in Oregon or spending the evening in
a tree house just outside
Atlanta.
Another major draw for
Airbnb users: affordable options
in expensive areas. Travelers’
Pennsylvania favorite—a Philadelphia guest room with outdoor patio space—rents for just
$41 a night. In the Big Apple,
they singled out a Brooklyn loft
with 12-foot ceilings that costs
$98 a night and in Denver an
1880s carriage house for $133.
But book early. While many
rentals are regularly available,
some are reserved months in
advance.
OCTOBER 2017
CALIFORNIA
$125 per night
P H O TO G R A P H S C O U R T E S Y O F A I R B N B
WHETHER IT’S A CABIN
OCTOBER 2 0 1 7
WASHINGTON
OREGON
$200 per night
$175 per night
GEORGIA
$375 per night
Prices, as of Aug. 28, 2017, do not include fees and are subject to change.
OCTOBER 2017
M O N E Y. C O M
*MVWX
THE GIG ECONOMY
;LEX9FIV(VMZIVW 6IEPP] 1EOI
You can earn your living driving an Uber, but most drivers don’t.
BY R O B W I L E
Uber
Lyft
Airbnb
Postmates
Etsy
TaskRabbit
Average earnings
per month
$364
Average earnings
per month:
$377
Average earnings
per month:
$924
Average earnings
per month:
$174
Average earnings
per month:
$151
Average earnings
per month:
$380
Share making >$1K
per month:
Share making >$1K
per month:
Share making >$1K
per month:
Share making >$1K
per month:
Share making >$1K
per month:
Share making >$1K
per month:
6%
9%
26%
4%
3%
12%
SOURCE: Earnest Operations
HOW MUCH MONEY
M O N E Y. C O M
OCTOBER 2017
45%—take home less than $100, suggesting
that for most drivers Uber is more about
beer money than making the monthly rent.
Earnest did not ask drivers whether
totals were before or after Uber’s 20% cut.
(Uber didn’t respond to a request for
comment, but its website stresses drivers
can work as much or as little as they want.)
Uber earnings appear more or less in line
with other sharing-economy jobs—especially
if you don’t own a home to rent out on
Airbnb. In all, Uber drivers’ average earnings
ranked fourth out of the nine gig-economy
jobs Earnest reviewed.
P H O TO G R A P H B Y I ST O C K P H O TO/G E T T Y I M A G E S
do Uber drivers actually earn? Since
launching in 2009, the ride-sharing company has
frequently changed up fares in the cities where it operates—making drivers’ pay something of a mystery. Yet
with Uber becoming so large, a clearer picture is emerging.
A driver’s location, hours (including the time of day and
week), and personal expenses can all affect how much he
or she will earn picking up rides for Uber.
But a new study by online lender Earnest Operations
offers what may be the best guess yet. Earnest studied tens
of thousands of loan applications that included earnings
from Uber and other popular side gigs and found that the
average Uber driver makes $364 a month. A handful of
drivers clear more than $1,000. But almost half—about
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SAVING TIME
%TTWXS
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CEOs reveal their favorite smartphone-enabled
office shortcuts. BY K AT I E VA N SYC K L E
FOR TO-DO LISTS
WorkFlowy
“I schedule two ‘open
door’ blocks every day
so my team can come
in and strategize about
our business. WorkFlowy is my go-to, and
I can keep track of the
specific things I want
to cover with each person. Other note-taking
apps are overcomplicated and have unnecessary in-app purchases and upgrades.
With WorkFlowy, I can
make whatever list I
want—long or short—
and it organizes my
brain seamlessly
across all my devices.”
SCOTT SANBORN,
CEO LendingClub
Trello
to your job around the clock—but it can also help you manage
your work more efficiently. We asked 10 CEOs to share their favorite
productivity-boosting apps. From digital “Post-it wall” Trello to news
curator Flipboard, these tools will help you stay on top of it all. Even
better: Except where noted otherwise, basic versions are free.
M O N E Y. C O M
OCTOBER 2017
LEA VON BIDDER,
CEO, Ava Science
FOR EMAIL MANAGEMENT
Boomerang
“My all-time favorite
for staying on top of
correspondence is
Boomerang. I don’t
know where I would be
with following up, closing deals, and making
sure our craziest ice
cream dreams happen
without it. With
Boomerang, I feel like
I will never miss anything: I can mark it to
send me reminders if
responses I’m waiting
for don’t happen, I can
schedule follow-ups
in advance, and I can
ping emails that are
not urgent to come
back to my in-box
whenever desired. It’s
also good to use for
East Coast correspondence where I want an
email to be received at
a more strategic time if
I’m getting to it late in
the day Pacific Time.”
NATASHA CASE,
CEO, Coolhaus Ice
Cream
O L I V E R B U R STO N — G E T T Y I M A G E S
FOR BETTER OR WORSE, your smartphone keeps you connected
“My most important
app to organize my
daily life is Trello.
I have tried every kind
of to-do list app and finally went back to just
using a book that I
would constantly carry
around. Then I found
Trello. It’s nothing
more than a typical
Post-it wall in an app
format. So it requires a
bit of setup time. I organized mine along the
days of the week.
I have a “to do this
week” list, a “to do
next week” list, and so
forth. Since I have
Trello I never forget
deadlines anymore,
and I have less weight
to carry around.”
SAVING TIME
all ambient sounds and
creates a continuity of
mental soundscapes
so that wherever I am,
I feel like I’m at home in
my head so that I can
get work done.”
that it allows me to mix
personal and professional goals, and as any
busy person knows, the
two wind up overlapping quite a bit.”
FOR MEETINGS MANAGEMENT
GoToMeeting
“The app that transformed my day and
productivity is GoToMeeting. It makes it
easy to set up and conduct conference calls
with global participants instantly over
Wi-Fi or [mobile] data,
which is critical when
trying to get teams and
partners in different
locations to meet at
short notice. The ability to communicate
across borders at short
notice has also saved
us significant costs
by reducing the need
for travel.”
EDWIN HAGANEMMIN, CEO,
Aztec Exchange
JEREMY GOLDMAN,
CEO, Groupmuse
FOR MINDFULNESS
FOR EXERCISE
Headspace
Sworkit
$12.99 A MONTH
“I use the Headspace
app once or twice a
day to help me operate
at my best. Yoga and
meditation create
important moments
to regroup, even when
working against
the clock. Meditation
yields perspective and
humor, and focuses
the mind so you can
not only save time—
but use the time well.”
MARCELA SAPONE,
CEO, Hello Alfred
FOR GOAL TRACKING
Productive
“The app I recommend
is, fittingly enough,
called Productive. It
has a nice, simple user
interface and is elegantly designed. I can
build out custom goals
that are specific to my
life, or I can choose
from some preselects.
One of the best things
about Productive is
SAM BODKIN,
CEO, Firebrand Group
Simply Noise
“Simply Noise is a
white-, pink-, and
brown-noise app that I
plug into whenever I’m
traveling, or working in
a busy café on the road,
or sleeping somewhere
that’s noisy in an unfamiliar way. The wash of
steady noise blocks out
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—BOB D’LOREN,
CEO, XCEL BRANDS
Sworkit is indispensable in helping me stay
on top of my game
while keeping tension
levels down. As an entrepreneur, busy mom,
and cancer survivor, incorporating exercise
into my daily routine,
eating unprocessed
foods, and drinking
plenty of water keep me
energized and healthy.
When my busy schedule does not allow for
time at the gym, or
even to think about it,
Sworkit is my coach. It
not only provides exercise ideas and instructions, it sends helpful
reminders throughout
the day to do stretching
exercises at my desk
or a round of tensionrelieving breathing
techniques en route to
my next appointment.
Having exercise plans
at my fingertips leaves
little room for excuses
to not work out.”
DALE NOELLE,
CEO, True Model
Management
OCTOBER 2017
*MVWX
FOR MEDIA
Flipboard
“With all the moving
pieces in my business
and personal life,
I look for apps that
simplify my day.
Flipboard curates
news based on my
interests and delivers
it in real time. It saves
a lot of time that
I would have spent
combing through the
news and ensures
I don’t miss crucial
articles … It’s one of
the most efficient
ways to read the news
that matters most.”
BOB D’LOREN,
CEO, Xcel Brands
Audible
$14.95 A MONTH
“I love to listen to
books on the go,
so Audible is great for
helping me process
information during my
commute. I find that
listening to books
helps me become a
better leader. I’ve
been listening to Tribe
by Sebastian Junger
most recently, which
has been incredibly
eye-opening.”
CHRIS O’NEILL,
CEO, Evernote
M O N E Y. C O M
4PER
M E N N O VA N D I J K — G E T T Y I M A G E S
-XŞW2SX.YWX
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New cell phone apps and age-old
common sense can protect you.
BY M EG A N L EO N H A R DT
IF YOU THINK YOU’VE BEEN getting more
calls from strangers asking for money,
you’re not imagining it.
About 95% of people say they’ve gotten a
call from a telemarketer in the past six
months, according to a survey of over 1,000
Americans by telecom service company
First Orion—up from 84% in 2015.
While some unwanted calls may be from
legitimate companies, there’s also been a
13% surge in phone scams, with 69% of
respondents saying they’ve gotten at least
one scam call over the past six months.
And one in eight people reports receiving
over 20 scam calls in that same period—
a whopping four times the number of people
who reported that volume of scam calls in
2015, First Orion found.
Regular sales calls are annoying, but the
OCTOBER 2017
M O N E Y. C O M
4PER
TECHNOLOGY
scammers are downright dangerous. When it comes to parting you
from your money or your personal
information, these scammers are
inventive. Fraudsters posing as IRS
agents have netted $54 million
since October 2013, according to
the Treasury Inspector General for
Tax Administration. The Federal
Trade Commission also warns
about callers posing as debt
collectors, employment agencies,
or sweepstakes companies.
Recently, the FTC even posted
information about callers claiming
to be with the U.S. Patent and
Trademark Office, demanding
“fees” for routine services.
The FTC and other consumer
advocates offer these five tips for
squelching unwanted calls:
1. DON’T ANSWER
The simplest way to avoid getting
caught up in a scam is to ignore
calls from unknown numbers.
It won’t cut the number of calls
you get, but at least you won’t
waste any time and won’t be
talked into wasting money. “If I
don’t recognize who is calling,
I allow it to go to voicemail. If it’s
someone who needs to talk to me,
they will leave a message; and if
it’s a scammer, I will then block
their number,” says Amy Nofziger,
regional director for the AARP
Foundation and a member of the
organization’s AARP Fraud
Watch Network.
and quiet if you also use technology to screen your calls. For
landlines, Nomorobo is a wellreviewed free screening service for
voice over Internet protocol (VoIP)
phone systems. Most cell phone
call-blocking apps use crowdsourcing to identify numbers associated
with scam callers, Nofziger
explains. For Android cell phones,
the free Should I Answer? app
displays a rating when an unknown
number calls, and enables you to
block numbers. For iPhones, the
free Hiya app is designed to
identify and block a variety of
robocalls, including telemarketers,
debt collectors, and scammers.
If you’re willing to pay, Nomorobo
charges $1.99 a month for its
iPhone app. The TrapCall and
Truecaller apps (both available
for iPhone and Android) get high
Robocall Complaints
Skyrocket
Complaints about robocalls to the
Federal Trade Commission now top
an average of 13,000 per day.
AVERAGE NUMBER OF COMPLAINTS A DAY
15,000
13,020
12,000
9,000
2. BLOCK AUTOMATICALLY
The easiest defense is to enter
all your phone numbers in the
FTC’s free Do Not Call Registry.
But since a growing number of
scammers are sidestepping the
FTC’s rules, you’ll have more peace
9,715
6,032
6,000
4,720
3,000
2014
2015
2016
2017
SOURCE: Federal Trade Commission
M O N E Y. C O M
OCTOBER 2017
marks from users. TrapCall
services start at $3.95 a month,
while Truecaller charges $1.99 for
an ad-free experience.
3. BLOCK MANUALLY
If you don’t want to download
another app, you can manually
block numbers on most smartphones. On iPhones, look up your
recent calls. At the bottom of the
caller information, you’ll see the
option to block that number.
Various Android models also let
you block (or “auto-reject”) numbers from your log of recent calls.
4. PLAY HARD TO GET
If you do answer, remember that
scammers want you to say yes as
quickly as possible. So never give
in to callers who pressure you to
make up your mind on the spot, the
FTC warns. If you’re tempted by
their pitch, hang up and check
their bona fides by calling the
organization’s number as it is listed
on your credit card, your bills, or
on a verified site on the Internet.
5. DOUBT FREELY
Be wary of callers who promise
“free” bonuses, services, or
vacations. Question fees, such as
shipping and handling, charged
for the “freebies.” “Free is free.
If you have to pay, it’s a purchase—not a prize or a gift,” the
FTC says on its website.
Finally, “Regardless of how you
handle these calls, remember to
never give personal or private
information to anyone over the
phone,” Nofziger says. “Never give
your bank account number or
credit card number, or buy a
prepaid gift card for anyone who
claims you owe them money.”
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FOR ITSELF.
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4PER
CAREERS
6IGPEMQ=SYV ;IIOIRHW
These four activities can turn two days off into rejuvenating
mini-vacations that ease the Sunday-night blues. BY M A RT H A C . W H I T E
1. TURN OFF YOUR PHONE
You need to fully unplug to really unwind,
Onstad says. Worried that could hurt your
career? Lots of successful people—such as
Zillow CEO Spencer Rascoff and TV producer
Shonda Rhimes—avoid answering work
emails on weekends. So you can probably
ignore your in-box too.
2. GO OUTSIDE
Spending time in nature elevates your mood,
improves concentration, and boosts diseasefighting vitamin D. Better yet: exercising outdoors. Researchers at the University of Essex
in Britain found that while exercise in any setting improved fitness, the same routine
performed outside made people happier and
more energized.“All ages, genders, and social
classes respond positively to green exercise,”
they conclude.
3. HANG WITH FRIENDS
M O N E Y. C O M
OCTOBER 2017
4. DO GOOD DEEDS
A survey from HR consulting firm Robert Half
found that more than 60% of workers who
volunteer regularly say that doing so enhances
their well-being. “Everyone wants to do things
they’re passionate about,” notes Andy Decker,
regional president at Robert Half. Unfortunately, our everyday jobs don’t always afford
us that opportunity.
Volunteering can also help your career,
since it builds skills and networks, Decker
adds. So who knows, maybe having more fun
on the weekends can help you land a job you
look forward to on Sunday nights.
J W LT D — G E T T Y I M A G E S
DO YOU SPEND your Sunday evenings feeling tired and
dreading the coming workweek? Welcome to the
club. More than three-quarters of us suffer from Sundaynight blues as we face returning to the office, a poll from
Monster.com found. One key reason, experts say: our lack
of a mental “reset” during the weekends. For example,
more than a third of working parents report checking
work email “often or constantly” on their days off, according to the American Psychological Association. The failure
to take a break is bad for your body, mental health, family,
and even career, says Katrina Onstad, author of The
Weekend Effect: The Life-Changing Benefits of Taking Time
Off and Challenging the Cult of Overwork. “Most people find
their good ideas and have their epiphanies during down
time,” she notes.
Luckily, there are solutions. Here are four techniques to
turn your weekends into rejuvenating breaks, recommended by Onstad and other experts:
Research increasingly shows that friendships
are key to our well-being. “Times spent with
friends are associated with a better mood,
and we know that defends against stress,”
says William Chopik, assistant professor of
psychology at Michigan State University and
author of a recent study on the subject. “In
some ways, it’s a real escape.”
EVERY AMERICAN WASTES
290 POUNDS OF FOOD A YEAR
4PER
TRAVEL
A
7IGVIXW XS
7GSVMRK
*MVWX'PEWW
9TKVEHIWSR
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Dress well and bid smartly: Frequent
fliers reveal little-known tricks to
finding cheap first-class seats.
BY J E N N I F E R CA L FAS
M O N E Y. C O M
OCTOBER 2017
B
C
D
TRAVELING ECONOMY
class
just keeps getting worse.
Seating is more cramped. You
have to bring your own food and
entertainment. And the airlines
keep dreaming up new surprise
fees. But it’s hard to justify
spending an extra $1,000 (or
more) for a wider seat and a little
“free” Champagne.
How about, say, $59? While
bargain first-class upgrades are
rare, they are possible. Veteran
travelers say that if you act on
the following tips, you’ll greatly
increase your chances of enjoying
an ice cream sundae from a fully
reclining seat—without maxing
out your credit cards.
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āĪĝĜġĬęĨĨĪħĮęĤĪĝĩĭġĪĝĜĐĝĜĝĝĥĥġĤĝīĞħĪĬĪęĮĝĤħĦęĦıęġĪĤġĦĝĚęīĝĜħĦęěĬĭęĤĬġěģĝĬĨĪġěĝęĬĬġĥĝħĞĨĭĪěĠęīĝčljĝĪĝĜĚıāęĨġĬęĤčĦĝĀęĦģÕēđÿÖČÿƣ! &āęĨġĬęĤčĦĝ
4PER
TRAVEL
ARRIVE EARLY
Try being one of the first passengers at the gate so you’ll have
ample time to schmooze with flight
staff and ask about potential
options for upgrades. At the very
least, you’re more likely to stand
out among the other passengers.
“ ‘Early bird gets the worm’ works
here,” says Carolyn Paddock,
a former flight attendant and
founder of Life in Flight, a travel
coaching website.
BE KIND
No matter how frustrated you
are, or how justified your anger is,
a tirade probably won’t win you
many points with frazzled gate
agents. Instead, to stand out from
the other passengers, go out of
your way to be nice to the airline
employees, experts advise. At the
very least be courteous and
respectful to the flight attendants
and gate agents. Better yet,
consider a special gift if the
moment feels appropriate.
Edward Pizzarello, who writes for
InsideFlyer, typically carries
several $5 Starbucks gift cards
when he travels. (His father, he
says, would often carry chocolates to hand out to flight staff.)
“It’s a great thing to hand to
somebody when you’re having a
discussion, and they’re trying to
help you,” Pizzarello says. “More
often than not, I’m going to get a
desirable outcome.”
the vouchers or checks offered
to those who volunteer to give up
their seats on crowded flights,
it doesn’t hurt to ask for an
upgrade on your new ticket.
STICK TO ONE AIRLINE
Elite-status members of an airline’s
frequent-flier club typically get
offered upgrades first, and often at
a discount. While the perks come
more easily for business travelers
who fly tens of thousands of miles a
year, holiday travelers can raise
their chances of an upgrade by
using the airline’s credit card to
build up miles.
DRESS WELL
If you’re a gate agent with a
first-class seat open, are you going
to give it to the teen wearing
pajamas? Or to the gentleman
wearing a nice blazer and pressed
slacks? “If they have to upgrade
someone, they’re not going to put
some slob up in first class,” says
Johnny DiScala, who runs the
travel website JohnnyJet.com. You
don’t have to wear a suit. These
days, just wearing clean, tailored,
casual business attire can make
you stand out, he says.
CARRY ON ONLY
“Don’t check your bag,” advises
Pizzarello. “If you’re carrying on a
bag, you have more flexibility to
move around the flight. And more
flexibility will yield more benefits
from the airline.”
BE FLEXIBLE
If you’ve arrived early, politely
approach the flight attendants and
volunteer to move to a different
flight if there’s a better seating
option, experts recommend. And
ask about bumping. In addition to
M O N E Y. C O M
OCTOBER 2017
TRAVEL ALONE
It’s much more likely for one seat to
be open instead of two or more. “It’s
so much easier when you travel by
yourself,” DiScala says. “There are
so few seats these days.”
BID
Many international airlines allow
you to bid on empty premium seats
ahead of time. The auctions
typically run for several weeks and
end 72 to 24 hours before takeoff.
Bidding for medium-haul flights
across Europe generally starts at
about $200, says Richard Kerr,
senior points and miles contributor
for ThePointsGuy.com. The best
bargains are generally found on
flights to tourist destinations,
since business travelers often get
automatic upgrades. Kerr’s
strategy: Bid a hair above the
minimum.
SPEND AT THE LAST MINUTE
Check your email and the airline’s
website a few days before your
flight for last-minute upgrade
deals. And ask again at the gate.
Some empty premium seats are
released only shortly before
takeoff. United Airlines recently
offered late upgrades on short
domestic flights for as little as $59.
But the best bargains are often
reserved for those who have
followed the other tips listed here.
Recently, while Paddock was
waiting to board a 12½-hour flight
from Rio de Janeiro to London,
a gate agent offered her the option
to pay a nominal fee to upgrade to
business class. “The person before
me in line wasn’t offered the same
upgrade deal,” she recalls. The
difference: Paddock had followed
her own advice about arriving
early, dressing well, and being nice.
As a result, she snuggled under a
quilt in a reclining seat and sipped
on Champagne. “I remember
distinctly being sad that the flight
ended—even after 12 hours,” says
Paddock.
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H U LT O N A R C H I V E /G E T T Y I M A G E S
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The wealthy may have an easier road
to retirement, but that doesn’t mean
we can’t learn from their journey.
BY WA LT E R U P D EG R AV E
PHOTOGRAPH BY S LIM AARONS
THE PLAYWRIGHT
Oscar Wilde said that
“No man is rich enough to buy back
his past.” Yet wealth can help you secure
your future.
And a new UBS Wealth Management
Americas survey of more than 2,000
wealthy investors (mostly people 50 or older
with $1 million or more in investable assets)
suggests the affluent may know a thing or
two about preparing for retirement.
Here are three lessons culled from the
survey that, wealthy or not, you can put to
work to boost your own odds of achieving a
more secure and fulfilling retirement.
1. IT’S ABOUT FINANCIAL READINESS, NOT AGE.
Many of us believe the trigger for retiring is
hitting a certain age, whether it’s 62, when
we become eligible for Social Security; 65,
OCTOBER 2017
M O N E Y. C O M
6IXMVI
RETIRE LIKE THE RICH
the age of eligibility for Medicare; or
66, when many baby boomers
qualify for full Social Security
benefits.
But the rich know that age isn’t
what matters most. It’s whether
you’re financially capable of maintaining your standard of living
without those regular paychecks
coming in. This is why 66% of
wealthy pre-retirees said their
decision to leave the workforce
hinges not on how old they are, but
on reaching a certain level of assets.
That hurdle will be lower for most
people than for affluent retirees. For
example, 86% of those polled for this
survey said they’d need at least
$1 million before retiring, and 41%
said they wouldn’t leave their job until
they had accumulated $3 million or
more. Most Americans will be able to
retire on considerably less than that.
Whatever size nest egg is
appropriate for your situation, you
want to be sure you’re on track to
achieving it well in advance of
retiring rather than discovering on
the eve of your hoped-for retirement
date that you’re coming up short.
The best way to gauge whether
the projected value of your nest egg
combined with Social Security will
provide sufficient income is to
perform regular checkups. You can
use a free tool like T. Rowe Price’s
Retirement Income Calculator.
Just plug in the amount you
already have saved, the percentage
of salary you’re contributing to
retirement accounts now, and the
age at which you would like to retire.
Then the calculator will estimate
the probability that you’ll be able to
retire on that schedule with enough
income to support you for the rest of
your life. You can also see how
changes like saving more might
M O N E Y. C O M
OCTOBER 2017
improve your outlook.
Before you retire, you’ll also want
to make sure you have a comprehensive retirement plan that details the
amount of income you’ll be relying
on from such sources as Social
Security, pensions, withdrawals
from savings, home equity, a reverse
mortgage, etc.
Nine in 10 of the UBS survey
participants said they’re not only
confident that they’ll have enough
money saved for retirement, but that
they also have a clear idea of where
their income will come from once
they retire. Without such clarity, you
can’t really know whether you’re
prepared to maintain your standard
Their Secret to Success
The rich are more confident about
retiring in part because they’ve studied
the ins and outs of their own plans.
PERCENTAGE OF WEALTHY WHO …
89%
89%
Are confident in
their retirement
readiness
Know all their
sources of income
in retirement
74%
59%
Know how long
their savings
will last
Know it will take
time to adjust to
retired life
NOTE: Based on a survey of 2,028 affluent and
high-net-worth investors with at least $1 million in investable
assets. SOURCE: UBS Wealth Management Americas
of living after you retire or if you’re
engaging in wishful thinking.
2. YOU STILL NEED TO INVEST FOR
GROWTH.
It’s understandable why many
retirees invest more conservatively
after leaving the workforce. After
all, severe stock market setbacks
are more unsettling when you have
less time to rebound from them.
At the same time, your portfolio
also has to grow enough to generate
income that can last the rest of your
life. Which is why after retiring, you
still need a healthy dose of stocks. If
anything, this is even more true
today, considering the anemic yields
currently available in the investments retirees have traditionally
gravitated toward, such as bonds,
CDs, and money-market funds.
Wealthy retirees clearly understand this dynamic. More than 60%
of those surveyed said they disagree
with the adage that the percentage of
stocks in your portfolio should equal
100 minus your age—i.e., 40% at age
60, 30% at 70, 20% at 80, etc. Instead,
these retirees reported they were
holding upwards of 50% or more of
their assets in stocks on average even
into their seventies and eighties.
That’s not to say you should
automatically follow their lead. After
all, with a larger nest egg and more
resources to fall back on, wealthier
investors generally are better able
to ride out severe market downturns
with less concern about having to
scale back their standard of living
because of investment losses. You
may not have that luxury. So you’ve
got to come up with a stock-andbond mix that’s right for you given
your financial circumstances.
So what’s that right balance?
That is, how much exposure to
equities is enough to produce the
returns you need while also
providing sufficient protection
against market setbacks?
One way is to go to a risktolerance asset-allocation tool like
the free version Vanguard offers
online (personal.vanguard.com/
us/FundsInvQuestionnaire). After
answering questions about your
appetite for risk and when you
expect to start drawing money
from your portfolio, the tool will
suggest a blend of stocks and
bonds that’s appropriate for you.
By plugging that mix into the
American Institute for Economic
Research’s Retirement Withdrawal Calculator (find it in RealDealRetirement.com’s Retirement
Toolbox section), you’ll know
whether a portfolio invested in
such a mix may be able to generate
the income you need as long as
you’ll need it.
3. A “SUCCESSFUL” RETIREMENT
REQUIRES MORE THAN JUST MONEY.
While going into retirement with
a hefty savings balance may
increase your odds of having a
secure and fulfilling post-career
life, wealthy investors know that
doesn’t guarantee that making
the adjustment from the workaday
world to retirement will automatically be seamless.
The survey found that more
affluent pre-retirees were more
concerned about not having a
regular schedule (64%) than they
were not having a regular
paycheck (36%), and more than a
third said they were worried
about how they’ll fill their free
time and about losing their sense
of purpose in life.
To address those concerns and
OTHER LESSONS FROM THE RICH
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THINK GLOBALLY.
Among Americans with
at least $100,000 in
assets but who aren’t yet
millionaires, only 28%
say they are willing to
invest outside the U.S.
But among the
ultrahigh-net-worth
crowd (those with at
least $5 million in net
worth, not including their
primary homes), half are
willing to invest abroad.
This isn’t an insignificant point, as foreign
stocks are considerably
cheaper than domestic
shares after this
eight-year-old bull
market. Overseas shares
trade at a price/earnings
ratio of 16, based on the
past 10 years of
averaged profits. That’s
a 36% discount to the
historical median. By
comparison, U.S. stocks
are trading at a P/E of
30, nearly double their
historic level.
KEEP THINGS SIMPLE.
Conventional wisdom
says the rich employ
sophisticated strategies
and rely on exclusive
investments such as
hedge funds to keep
their money growing. In
reality, the vast majority
rely on plain-vanilla
better prepare for a successful
transition, it’s important in the
years leading up to retirement to
do a little lifestyle planning.
Among the issues you should
explore: Do you have the kind of
network of friends and family that
research shows is important to
staying socially engaged? Will you
stay in your home, downsize, or
perhaps even relocate to an area
with lower living costs?
Have you considered steps you
can take to ensure this final phase
of your life will be meaningful and
fulfilling—perhaps by immersing
yourself in a new hobby or venture
or working for a cause or charity
that represents values that you
truly admire?
For what it’s worth, the
retirees queried for this survey
mutual funds and
ETFs to anchor their
portfolios. Meanwhile,
only 6% of the highnet-worth crowd even
invests in a hedge fund
or venture capital.
DROWN OUT THE NOISE.
Wealthy investors are
good at ignoring
distractions. Only a
quarter of the rich
planned to change their
investing strategy in
response to the
presidential elections,
Spectrem found. And
only a quarter listen
to friends or coworkers
for financial advice.
seem to have taken to retirement
pretty well, with half saying they
felt happy with their new lives
right away, while another third or
so saying they adjusted to retired
life within a year. Just 19% said
that if they had the chance to do it
over again that they would have
delayed retiring.
Bottom line: The rich may very
well be different from the rest of
us. And the fact that they have
more money than the average
American family is a definite
advantage in retirement.
But if you plan diligently and
take your cues from the wealthy
in the areas above, you should be
able to have a retirement that,
even if not as financially secure as
an affluent retiree’s, can be just as
enjoyable and rewarding.
OCTOBER 2017
M O N E Y. C O M
6IXMVI
LOOKING FORWARD
THE S&P 500 DIDN’T GAIN GROUND
Hard-and-fast rules for tapping retirement funds
are giving way to more flexible—and irregular—
approaches. BY E L I Z A B E T H O’ B R I E N
M O N E Y. C O M
OCTOBER 2017
SKIP RAISES IN DOWN YEARS
Under the 4% rule, retirees with $1 million would take out $40,000 in the first
year. Then they’d typically boost that
dollar amount in subsequent years based
on the consumer price index (CPI), a
common gauge of inflation. So if CPI rises
2%, they’d take out $40,800 in year two.
But to play it safer, you could choose
to skip those raises in years following
negative returns for your portfolio.
David Blanchett, Morningstar’s head of
retirement research, says if you skip the
inflation bump in down years, the chances
your money will last until age 90 will go up
P L AT E : N I C H O L A S E V E L E I G H — G E T T Y I M A G E S : D O U G H N U T: L A R R Y WA S H B U R N — G E T T Y I M A G E S
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in
2015, so neither did retiree Bruce
Stanton’s spending money. That summer,
the former teacher in Washougal, Wash.,
dialed back what he withdrew from his
retirement account to reflect the
lackluster market. Fluctuations in
income aren’t that rare. During his
career as a chemistry teacher, Stanton
would sometimes get a big raise and
other times get none. “I’m used to going
without them,” says Stanton, 63.
A challenge for all retirees is creating
an income stream that will last a lifetime
even if a downturn takes a big bite out of
their savings. Some, like Stanton, are
tackling this by adjusting withdrawals
based on the market’s performance.
But market-linked approaches run
counter to the long-standing 4% rule,
which holds that your money will last for a
30-year retirement if you withdraw 4% of
your nest egg the first year and adjust that
dollar amount annually for inflation.
Some experts are now arguing for a
lower initial rate—such as 3%—since
stocks and bonds may deliver belowaverage returns over the next few
decades. Yet for much of history, 4% has
been conservative, according to financial
adviser Michael Kitces.
So what’s a retiree to do? As an
alternative to withdrawing a fixed
percentage, here’s a look at four
“dynamic” withdrawal strategies.
by nearly 11 percentage points,
assuming an initial 4% withdrawal.
RATCHET HIGHER IN UP YEARS
What if you care about flexibility,
but instead of sacrificing after
down years, you want to reap the
rewards of a strong market?
Kitces says if your account ever
grows 50% above its starting value
after initiating withdrawals—say
you retired with $1 million but
your balance rises to $1.5 million—
you can go ahead and boost your
withdrawals by an additional 10%
above any inflation adjustments in
perpetuity. Assuming you were
going to withdraw $45,000 this
year, you’d actually be able to tap
as much as $49,500. And you
wouldn’t have to slash withdrawals
after subsequent downturns.
According to Kitces, this
strategy won’t deplete your
account under any scenario. The
higher spending, though, makes
this less than ideal if you want to
leave legacies to your heirs.
SET A FLOOR AND A CEILING
This hybrid approach, pioneered
by Vanguard, starts out by
establishing an annual rate of
withdrawals—say, 4%. Then you
set a ceiling that’s no more than
5% higher than the prior year’s
income level, and a floor that’s no
more than 2.5% lower.
Here’s how that would work:
Assume you start with $1 million,
and say you plan to withdraw 4%,
or $40,000, at year’s end. But
market forces boost the value of
your nest egg by 20% to $1.2 million. How much would you be able
to tap at the end of year two? Well,
you’d start by applying that 4%
rate again to your new balance,
which comes to $48,000. Then
you’d see if that amount falls
within your ceiling and floor. In
Sustainable
Withdrawals
The old 4% rule isn’t
the only safe income
strategy. These results
are for a 65-year-old
couple with $1 million:
NOTES: Median results are based on
Monte Carlo simulations over 30 years
based on a 50% stock/50% bond
strategy. Each strategy allows for a 10%
chance real wealth falls below $150,000
after 30 years. SOURCE: Wade Pfau
WITHDRAWAL
STRATEGY
MEDIAN WEALTH AFTER
30 YRS. OF WITHDRAWALS
Skip the raise
in down years
$953,77O
Ratchet higher
in up years
$935,10O
Set a floor
and ceiling
$528,1OO
Use RMDs, but
boost by 10%
$346,4OO
this case, a 5% ceiling on $40,000
would be $42,000, which is below
the $48,000 mark—so you’d go
with the lower figure.
This ceiling-and-floor approach
had a 92% success rate, meaning
in more than nine out of 10 possible
scenarios, retirement funds aren’t
depleted even after 35 years,
according to Vanguard. By
contrast, the traditional 4% rule
with annual inflation adjustments
resulted in a 78% success rate.
This also mimics human
behavior: People tend to splurge
when the market is up, and dial
back when it’s down, says Francis
Kinniry, a principal in Vanguard
Investment Strategy Group.
USE RMDs AS YOUR GUIDE
Once you reach age 70½, you
have to take required minimum
distributions (RMDs) from your
traditional IRAs. It’s Uncle Sam’s
way of getting his hands on money
that’s been tax sheltered for years.
To calculate your RMD, you
divide your IRA balance by an
IRS-provided figure that represents an actuarial estimate of the
remaining life span of someone
your age. At 70, your denominator
is 27.4, meaning that under certain
circumstances someone your age
may live until nearly 97½.
As it happens, you can “take
advantage of the actuarial strategy
behind RMDs to guide your
spending,” says Wade Pfau,
professor of retirement income at
the American College of Financial
Services. No one under 70½ must
take RMDs, but there are equivalent lifetime expectancy figures.
For a 65 year old, it’s 31.9.
If you retire at 65, you’d divide
your nest egg by 31.9. With a
$1 million account, that’s $31,350,
meaning rather than tapping 4% of
your nest egg, you’d be taking 3.1%,
a relatively conservative approach.
Investors who aren’t looking to
leave a lot in their accounts for
heirs might alter the formula
slightly to boost their income.
For instance, you might modify
your RMD amount by a factor of 1.1.
Here, you’d multiply that $31,350
figure by 1.1, and at 65 you could
withdraw close to $34,500 on that
$1 million account.
OCTOBER 2017
M O N E Y. C O M
TOGETHER
WE CAN
BUILD A
BETTER US
From safe spaces to academic achievement to
family well-being and more, when you donate to the Y,
you’re giving those in need the opportunity to thrive.
ymca.net/forabetterus
MIND OVER MONEY
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No matter how wealthy you are, there’s one thing
you can do to boost your chances of retiring well.
BY WA LT E R U P D EG R AV E
WOULDN’T IT BE GREAT if there
was an easy thing you could
do to better prepare for retirement and make you feel more
confident about your prospects for
financial security? There is: Put
your retirement plan in writing.
People with a written plan are
60% more likely to increase 401(k)
contributions and twice as likely
to stick to monthly savings goals
than people without such a plan,
a Schwab study found. “Putting
your plan in writing makes
planning less intimidating,” says
Joe Ready, head of Wells Fargo
Institutional Retirement and
Trust. “It helps you see what
steps you need to take, which
builds confidence and makes it
more likely you’ll follow through.”
Yet only 24% of Americans
have put pen to paper (or fingers
to keyboard), Schwab found.
Which is a shame, because you
Do the Math
As you write down your
retirement plan, also
calculate how much you’ll
need to save. Here’s why:
SOURCE: Employee Benefit
don’t need a magnum opus. You
can reap the benefits of a written
plan with these three basic
elements:
6IXMVI
2. AN INVESTING STRATEGY
You want to set a stock and bond
mix that can generate the returns
you’ll need while offering protection in a downturn. Rev up a tool
like Vanguard’s Investor Questionnaire, which suggests a stock/
bond mix based on your risk
tolerance and how long you intend
to keep your money invested.
Don’t feel up to it? If you must,
go with a target-date fund or
managed account, options that set
and manage an asset mix for you.
3. A REGULAR MONITORING PLAN
1. A TARGET SAVINGS RATE
Many pros recommend shooting
to save 15% of your income a year,
including employer matches. But
the amount you should be saving
in your 401(k)s, IRAs, and other
accounts depends on how much
you earn, how much you’ve
already saved, and the age at
which you plan to retire, among
other things. Search online for
the Boston College Center for
Retirement Research’s Target
Your Retirement tool, and use it
to help you figure out the right
savings rate for you.
If you can’t hit your target now,
make sure your plan includes a
way to reach your goal, say, by
saving a portion of each pay raise.
CONFIDENT IN BEING ABLE TO RETIRE COMFORTABLY
52%
77%
Workers who haven’t
calculated their needs
Workers who have
It’s not enough just to have a plan;
you have to make sure it’s working.
Annual reviews should suffice,
though you may want to do an
occasional spot-check if the
market appears vulnerable to a
pullback or has actually sustained
a loss of, say, 10% or more.
Among the questions you’ll
want to ask yourself during these
periodic reviews: Are you hitting
your savings target or making
acceptable progress? Can you
afford to raise that target? Have
stock gains or losses thrown your
allocation out of whack? Do you
need to rebalance to bring your
portfolio back in line? Do you need
to change your asset mix as you
draw closer to retirement? Also,
make sure that you haven’t larded
up your portfolio with new funds
or ETFs that don’t really fit into
your long-term strategy.
None of this is to say that a
written plan is a silver bullet. You
still have to do the heavy lifting—
the actual saving and investing.
But by putting your steps in
writing, you’re more likely to keep
your eyes on the real prize.
Research Institute
M O N E Y. C O M
Fiduciary:
It’s the word
independent
advisors
live by.
Independent Registered Investment
Advisors are held to the highest
standard of care. As fiduciaries, they
are required to act in the best
interests of their clients at all times.
That’s why we support independent
financial advisors. And why we think
it’s worth your time to learn more.
FindYourIndependentAdvisor.com
Annette B. | Independent financial advisor since 2006
Charles Schwab is committed to the success of over 7,500 independent financial advisors who are
passionately dedicating themselves to helping people achieve their financial goals.
This content is made available and managed by Charles Schwab & Co., Inc. (“Schwab”). The purpose of this information is to educate investors about working with an
independent Registered Investment Advisor (RIA). The RIAs and their representatives featured here use Schwab Advisor Services™ for custody, trading, and operational
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reserved. Member SIPC. (0416-F1LX) (ADP92136-00) (06/16)
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1EVOIX
Before you can move on to greener
pastures, you’ll have to sell your
home wisely. Here’s some advice.
BY CA R L A F R I E D A N D TAY LO R T E P P E R
ILLUSTRATION BY JASON SCHNEIDER
IN THEORY, SELLING A HOME should be
easy right now. Real estate has been
rebounding for more than half a decade, and
home prices are climbing at a healthy 6%
annual clip. The improving economy is
creating a slew of would-be buyers, and
there’s a dearth of homes for sale.
On paper, this has all the makings of a
classic seller’s market. And that should be
good news for Americans who have been
stuck in their homes since the mortgage
crisis—or who are simply looking to move to
more vibrant communities and economies,
such as the towns on MONEY’s 2017 Best
Places to Live list (see page 54).
Yet selling isn’t so simple. Just ask Ligiah
Villalobos. In 2006 the television and film
writer bought a $499,000 condo in Culver
City, Calif., four blocks away from Sony
OCTOBER 2017
M O N E Y. C O M
-RZIWX
REAL ESTATE
studios. At the time, she was head
writer for the children’s show Go,
Diego! Go!
She assumed she’d live in the
three-bedroom, two-bath condo for a
few years and then use the profits to
trade up to a larger, single-family
home closer to the ocean. But those
plans were dashed less than a year
after moving in, thanks to the real
estate crash.
Today things are looking up.
Housing in the Los Angeles metro
market has come roaring back. Her
mortgage is back above water. And
if she sold today, she’d make a profit
on her condo. Yet Villalobos still
feels trapped.
That’s because while her home is
gaining value, so are all the ones
around her. If she sold, where could
she afford to live? “In Los Angeles,
it’s very difficult to find a nice house
for less than $750,000. I still have a
goal of moving, but it’s not going to
happen for at least two or three
years,” Villalobos says.
This is becoming a common
refrain throughout the nation. “For
some time we have been hearing
from sellers that are not listing
because they are worried they won’t
be able to buy their next home in
that market,” says Redfin chief
economist Nela Richardson.
Don’t abandon hope. There are
plenty of moves you can make to sell
while improving the chances you’ll
be able to afford to move to your
next Best Place.
Be willing to put in some elbow
grease. In this market, you need to
make the most of the asset you
currently own. And selling your
home in “as is” condition could mean
leaving money on the table, making
it harder to afford your next place.
M O N E Y. C O M
Don’t automatically jump on
outlier bids. It’s natural to want to
accept whichever bidder waves the
highest price under your nose. But
assuming that all of your home’s
bidders will be using a mortgage on
the purchase, the offer price isn’t the
end of the story.
Their mortgage lenders will
require an appraisal. If the appraisal
comes in below the offer price, the
lender will nix the deal unless the
buyer coughs up more money to
make up the difference—or you drop
the price. If no one budges, you’ll
have to start all over again, setting
your sale back.
To avoid this happening, work
with a seasoned agent and listen to
his or her guidance on which bid has
the smoothest chance of sailing
through the closing process.
You’re still likely to find a buyer—
eventually—even if you don’t put in
any effort. But “you will likely lose
some bidders, and you may give back
some on price,” says Ralph McLaughlin, chief economist at Trulia.
The key is not to go overboard.
A large-scale remodel may be costly
and may not recoup as much as a
smaller, targeted project, studies
show. In addition to general decluttering, where should you start?
Focus on curb appeal. Among the
small projects that retain the most
value at resale, according to a survey
by Remodeling magazine, are
replacing your front entry door and
garage door. Those are likely to be
the first things a potential buyer will
notice when pulling up to your
house. Average cost: around $1,400
and $1,700, respectively.
Also, you’ll recoup a far greater
percentage of your costs on a minor
kitchen remodel—think replacing old
appliances, and refacing cabinets and
surfaces—than on a gut renovation.
Moreover, you’re likely to spend
around $20,000 on a minor touch-up,
which is about a third of what a
typical major kitchen remodel costs
on average nationally.
Fixer-Upper
Sell your property and lease it
back immediately. The old rule of
thumb in real estate: location,
location, location. The new rule:
timing, timing, timing. “Before we list
we need to have a strategy for where
the seller will go. Brokers are
becoming relocation experts,” says
principal broker Sam Schneiderman
Small projects can sell your home while paying for
themselves, especially in strong housing markets.
EXPENSES RECOUPED
Attic insulation
Minor kitchen remodel
National avg.
80%
San Francisco
179%
Memphis
227%
108%
New entry door
91%
133%
148%
105%
146%
SOURCE:
Remodeling
magazine
of the Greater Boston Home Team.
You can buy yourself time by
making your sale contingent on
the buyer leasing the home back to
you. Having another few months
to stay can be just the breathing
room you need to find and close on
your next home.
This strategy works best in
ultracompetitive seller’s markets.
“A buyer dealing with competition
from other multiple bidders may
be willing to do it, as a way to get
your home,” says Redfin’s
Richardson.
Be willing to make a pit stop
in a rental. Schneiderman says
some of his clients are moving into
rentals or temporary housing after
a sale. That’s to better position
themselves as buyers who don’t
have to sell when they’re making
an offer on their next house. In the
hot Boston market, you may lose
out on four or more bids before
landing your next home.
To make this less of a hassle,
get a furnished rental and leave
your possessions packed and in
storage until you are ready to
move into your permanent home.
Steer clear of bidding wars on
your next home. You can do this
in a number of ways. First, a good
agent should know everything that
might appeal to a seller, like a fast
close, a super-slow close, adopting
their cat. Your bid should include
any contingencies that specifically
address stress points for the seller.
Also, consider a fixer-upper for
your next home. Most buyers today
want as close to a turnkey situation
as possible. So if you shop for
homes that need some work, you
will likely face less competition.
And don’t forget new construction. “Signing a contract with a
builder avoids having to deal with
bidding wars,” says Sarah Staley, a
housing spokesperson for realtor
.com (MONEY has partnered with
realtor.com for this year’s Best
Places to Live feature). This works
if you can sit tight in your current
home until your new home is ready.
Can’t sell your home in a timely
fashion? Become a landlord.
During the housing crisis, many
homeowners who couldn’t sell
because they were underwater on
their mortgages became landlords
out of necessity. These were
people like Alex Caffarini. In the
aftermath of the financial crisis,
the then-thirtysomething was
ready to move on from his
Schaumburg, Ill., condo.
He was offered a job to work for
a consulting firm almost 700 miles
away in Carlisle, Pa. The catch:
Caffarini was still underwater on
his mortgage, and he was unwilling
to lose money on a short sale.
So Caffarini rented his place
out, covering most of the mortgage
and taxes, and moved. With lower
expenses in Carlisle, he could
afford to make extra mortgage
payments to improve his equity.
He eventually returned home to
Schaumburg (which ranks ninth
on our Best Places list; see
page 65)—but under much better
financial circumstances.
Caffarini became a landlord
during difficult economic times.
Yet this strategy remains relevant
in today’s healthier economy, even
after the market has been
rebounding.
Turn your current home into
the best place to live. In 2011,
Avik Chopra and his family bought
a three-bedroom home in Milburn,
An Uneven Market
(IWTMXIEPP]SYLIEVEFSYXXLI
VIEPIWXEXIVIGSZIV] Ŧ
Only 34% of houses in the U.S. have
seen their prices recover to their
pre–mortgage crisis levels, according
to Trulia. “Broad measures to gauge
the housing recovery aren’t that good
for measuring how well individual
markets or individual properties have
done,” says Trulia chief economist
Ralph McLaughlin. Trulia compared
current home values with prerecession highs in the nation’s 100
biggest metro areas. Only a tiny
fraction of homes in some major
markets have fully recovered. In Las
Vegas, less than 1% of homes are
back to pre-crisis prices. Things aren’t
much better in Tucson, where the
median home is $179,200, down from
$236,200 before the meltdown. By
comparison, 99% of homes in the hot
Denver market have fully recovered.
—TAY LO R T E P P E R
N.J. Today it’s worth $250,000
more than what they paid. But
that’s not money in the bank.
“It feels good to see the value
rise, but we’re still stuck in a home
we’ve out grown,” says Chopra,
who has two young children. “All
the other houses in our area have
gone up too.” But with more value
comes more equity, which means
Chopra has options. He’s planning
to borrow from his home to
finance a second-floor addition.
If you’re far along in paying off
your mortgage, staying put can be
wiser than taking on a new loan,
especially if your mortgage is
below the current 3.9% average
for a 30-year fixed-rate loan.
OCTOBER 2017
M O N E Y. C O M
-RZIWX
TECH BUBBLE 2.0
8IGLWLEVIWPMOI
XLIFVSEHWXSGO
QEVOIXEVIFEGO
XSXVEHMRKEX
VIGSVHLMKLW
8IGL7XSGOW%VI
&EGO Ŧ MR E &YFFPI
Nearly two decades after the dotcom crash, the sector
is getting frothy again. Yet there are simple ways to
hedge the rising risks without selling in a panic.
BY PAU L J . L I M
M O N E Y. C O M
OCTOBER 2017
B R YA N R . S M I T H /A F P — G E T T Y I M A G E S
IT TOOK 17 YEARS, but technology stocks finally
recovered all the losses they suffered in the dotcom
crash. But just as soon as the S&P 500 information
technology index returned to its March 2000 highs,
investors began to worry about whether another bubble
may be forming in the sector.
Take a look at the so-called FANG stocks—today’s
leading tech names including Facebook (social media),
Amazon.com (e-commerce), Netflix (streaming video),
and Google parent Alphabet (search, social, and mobile).
Collectively these stocks have gained more than 1,300%
on average in this bull market and now trade at an
average price/earnings ratio of 130,
based on the past 12 months of
operating profits.
What’s more, the total market
value of just these four companies
and iPhone maker Apple is greater
than the gross domestic product of
the United Kingdom.
“We have a tech bubble,” says Rob
Arnott, chairman of the investment
management firm Research Affiliates. “It’s certainly less dramatic
than the one we had back in 2000.
Valuations aren’t as high as they
were in 2000—but that doesn’t mean
they’re sustainable.”
To be sure, in the late ’90s, tech
was not only in a financial mania but
a cultural one too—something you’re
not seeing as much of today. For
instance, “people aren’t quitting
their jobs to day-trade,” notes Terri
Spath, chief investment officer of
Sierra Investment Management.
Pankaj Patel, head of quantitative
research at Cirrus Research, adds
that two decades ago, “your taxi
driver would tell you why he’s buying
Yahoo shares. Or you’d go for a shoe
polish at Penn Station, and the shoe
shiner starts talking about tech
stocks. When my Uber driver starts
talking tech, I’d worry,” he says.
Still, there have been several
disquieting developments within the
tech sector. Among them:
Overall, the average P/E for tech
companies in the S&P 500 is now 26%
higher than its long-term historical
average, according to FactSet.
That may not seem so worrisome,
given that in the late ’90s some tech
names traded at triple-digit P/Es.
But you can find plenty of such
examples today too. Salesforce.com
stock trades at 496 times the
company’s earnings. Yelp sports a
P/E ratio of 248. Amazon’s P/E is 241.
Netflix is at 204. And you can’t
even calculate a P/E for Tesla, the
electric-auto maker, because it
generated no earnings over the
past year.
Despite being a profitless
startup, Tesla is the most valuable
car company in America, valued
by Wall Street at $58 billion. By
comparison, General Motors,
which generated more than
$9 billion in profits in the past 12
months, is worth $52 billion.
Tech is back to being the biggest
sector in the market, representing
nearly a quarter of the S&P 500.
While that’s below the one-third
market share that tech stocks
enjoyed in the late 1990s, this
figure does not include several big
names that the public regards as
“tech” but the S&P classifies as
consumer stocks. They include
Amazon, Priceline, and Netflix.
Moreover, Tesla isn’t even in the
S&P 500 yet.
“Between you, me, and the
fence post, I’m nervous as hell,”
says James Stack, president of
InvesTech Research. Even if you
Tech’s
Long
Road Back
Though the sector
has been thriving for
a while, these stocks
only just returned to
their dotcom bubble
levels of March 2000.
:%09%8-327%6)2Ş8%7,-+,
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—ROB ARNOTT, CHAIRMAN OF RESEARCH AFFILIATES
LOOK ABROAD
don’t think this is a bubble, “tech
will carry a valuation risk going
into the next downturn,” meaning
these stocks are likely to fall more
than the broad market, he says.
How can you reduce that risk,
without selling in a panic?
The rising risk in U.S. tech shares
is yet another reason to make sure
you have ample exposure overseas, Arnott says. He notes that
European equities trade at a P/E
of around 15, based on the past 10
years of averaged profits. That’s
about half the valuation level of
U.S. shares in the S&P 500 index.
Plus tech represents just 5% of the
European stock market.
“The U.S. market acts like a
big tech ETF,” says Jeffrey
Kleintop, chief global investment
strategist for Charles Schwab.
“By contrast, Japanese stocks
track financial stocks. Canada
tracks energy. So it makes sense
to have international exposure.”
THINK SMALL
“Part of underweighting technology is avoiding the downside risk
of large stocks,” says Sierra’s
Spath. So hedge your bets by
making sure you’re diversified in
stocks of all sizes.
Outside of the S&P 500 index,
tech plays a decidedly more muted
role. For instance, the sector
makes up only about 15% of
small-company stocks.
S&P 500 INFORMATION TECHNOLOGY INDEX
1,000 index level
The 2000s represented a
lost decade, until social
media and smartphones
came along.
800
600
400
Before the 1990s
boom, tech took a
back seat to
consumer stocks
like Walmart.
200
September 1989–2000
2000–2010
2010–2016
Ζ͊͊͊Η
SOURCE: S&P Dow Jones Indices
OCTOBER 2017
M O N E Y. C O M
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-RZIWX
;LIRXS7XIT&EGO*VSQ7XSGOW
While you shouldn’t try to time the market, there are good reasons to reduce your exposure
to stocks based on where you are in life. BY J O H N WAG G O N E R
IN MOST CASES, you shouldn’t
listen to those little voices in
your head, especially when they
tell you to sell long-term holdings.
But “with valuations where they
are, and with the world in the
condition it’s in, I don’t know any
investor who isn’t asking whether
they shouldn’t move at least a
portion of their assets outside of
the stock market,” says Fidelity
Investor editor Jim Lowell.
If you’re investing for goals that
are more than a decade away, the
answer to that question is a
definite “no.” But there are times
when it’s perfectly reasonable to
take some chips off the table.
IF YOU HAVEN’T TOUCHED YOUR ACCOUNT IN
YEARS. Let’s say you put $60,000 in
the Vanguard Total Stock Market Index
fund (VTSMX) and $40,000 in Vanguard
Total Bond Market Index (VBMFX) eight
years ago, having decided back
then that a 60% stock/40% bond
mix was appropriate for your
goals. You then spent the next
eight years in a cave in Nepal.
Upon your return, your
portfolio shifted to 80% stocks/
20% bonds. At this point, it’s time
to rebalance, or sell enough from
your stock fund to replenish your
bond stake to get back to your
original 60/40 approach. You may
lose something in future gains, but
you’ll be at a risk level that keeps
you from waking up at night
shouting, “I’m ruined!” As a rule,
rebalance when your mix shifts by
10 percentage points or more.
IF YOU’RE WITHIN FIVE YEARS OF HITTING A
GOAL. Another reason to take chips
off the table: You’re closing in on
The Five-Year Rule
In 2008, older workers learned why you must dial back your equity exposure.
401(k) investors 56 to 65
whose portfolios held:
How much a $1 million
portfolio shrunk in 2008:
80% stocks/20% bonds
32%
22%
$714,000
90% stocks/10% bonds
80% or more in
stocks in 2008
90% or more in
stocks in 2008
$672,000
your goals. Let’s say you need
$2 million to retire comfortably,
and five years out, you’re at, say,
$1.9 million. If you’re 80% in
stocks, you can probably cut your
exposure and still make your goal.
Even if you’re not that close,
you still must take your foot off the
pedal. Don’t and you’ll fall further
back in a downturn, with too little
time to recover (see chart).
IF YOU’RE FEARFUL, BUT DON’T FALL
INTO THESE CAMPS. It never makes
sense to sell in a panic. But you
don’t have to quit stocks altogether.
A well-diversified portfolio
holds different types of equities,
including unloved shares. “Lower
prices are one way to mitigate
investment risks,” Lowell says.
So go with “deep value” funds
that invest only in extremely
low-priced stocks (that are likely
to lose less in a pullback) and that
let their cash levels rise if they
can’t find good shares to buy.
One good example: American Beacon
Bridgeway Large Cap Value (BWLIX), which
holds more cash than its peers but
still ranks in the top 10% of its
category over the past five years.
The worst reason to sell? Some
friend tells you to. “Going to cash
is one of the holy grails of the
investment bible,” Lowell says.
“But there’s no Holy Grail in the
real Bible, and any claim I’ve seen
about going to cash and getting
back in hasn’t been true, either.”
SOURCES: EBRI and Morningstar
M O N E Y. C O M
-RZIWX
STOCK X-RAY
7XSGO<6E] 4VMGIPMRI
A ’90s-era icon emerges as a new tech leader. BY PAU L J . L I M
THE PRICELINE GROUP, the online travel company that became famous in the late
1990s for using William Shatner (RIGHT) as its pitchman, boldly went where no
tech stock had ever gone before: above the $2,000-a-share mark. To be sure,
the shares slid back below that level in mid-August—and a stock’s price per
share alone says very little about how valuable the underlying company is.
Nevertheless, this milestone casts a spotlight on an online pioneer that remains
synonymous with the dotcom bubble—along with bygone names such as
Pets.com, GeoCities, and Webvan—and has been overshadowed by Amazon.com.
AMAZON HAS GOTTEN ALL THE BUZZ,
BUT PRICELINE HAS BEEN THE
BETTER INVESTMENT.
DESPITE ITS SIZE, PRICELINE’S
ONLINE BOOKING GROWTH IS STILL
OUTPACING THE INDUSTRY.
PRICELINE IS MORE PROFITABLE
THAN ITS PEERS—YET ITS STOCK
IS MUCH CHEAPER.
ANNUAL TOTAL RETURN PAST 15 YEARS,
THROUGH AUG.31
ANNUAL GROWTH IN ONLINE
BOOKINGS 2014–17 *
OPERATING PROFIT MARGIN, PAST 12 MONTHS
THROUGH AUG. 31
38%
10.2%
32%
9.8%
17.7%
6%
11%
Priceline
Priceline
Amazon
Tech sector
M O N E Y. C O M
OCTOBER 2017
Online travel
industry
The biggest player in online travel is
growing fast. Cowen & Co. forecasts hotel
room nights booked via Priceline will
jump from 557 million last year to
1.05 billion by 2020. Priceline, which did
not comment for this story, is leveraging
that growth to challenge Expedia in onestop shopping. Booking.com is testing
links in which hotel customers can reserve flights via Kayak (acquired in 2012),
rental cars via Rentalcars.com (2003),
and restaurants via OpenTable (2014).
Morningstar’s Dan Wasiolek expects
“Priceline’s global online travel agency
leadership position to expand over the
next decade, driven by a superior position in China, continued leadership in
Europe, and expanding presence in vacation rentals and restaurant bookings.”
1.5%
Priceline
TripAdvisor
Expedia
Trivago
Priceline enjoys another competitive
advantage: It’s actually profitable. The
company’s $2.4 billion in net income
over the past 12 months was five times
what rivals Expedia, TripAdvisor, and
Trivago earned combined.
What’s more, Priceline is more efficient at generating profits, based on a
widely followed measure called return
on equity. In general, companies with an
ROE above 15% are considered highly
profitable. Priceline has an ROE of 23%,
according to Morningstar, compared with
8% for Expedia and 10% for Amazon.
Yet surprisingly the stock commands
a lower price/earnings ratio than its
peers. At a P/E of 38, based on trailing
operating profits, Priceline looks cheap
vs. Amazon’s 241 P/E or Expedia’s 67.
NOTE: *2017 figures are based on full-year forecasts. SOURCES: Morningstar, Cowen & Co., Statista
B R YC E D U F F Y
While Amazon has been trouncing
the market over the past 15 years, Priceline shares have been lapping Amazon.
Had you invested $10,000 in the online
retailer on July 31, 2002, you’d have
nearly $700,000. If you invested the
same amount in Priceline, you’d be sitting on about $1 million more.
You can thank smart acquisitions
(a rarity in tech) for that. After the
2000–02 tech wreck, Priceline bought
the European travel site Booking.com
for just $135 million. Not only is Booking
.com bigger than Priceline rival Expedia,
it also accounts for 80% of Priceline’s
reservations. Even better, it gave the
company a leg up in the key European
market, where workers have about twice
as many vacation days as do Americans.
26.8%
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MONEY
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OCTOBER 2017
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M O N E Y. C O M
OCTOBER 2017
that speak to the good life, including
growing jobs, quality schools, cultural and
recreational resources, and affordable
homes. To help hone our search, MONEY
teamed up with realtor.com to leverage its
knowledge of housing markets throughout
the country.
The traits fell into eight broad
categories: cost of living (how steep are
local taxes, for instance?), the economy
(how many jobs are being created?),
education (what’s the graduation rate?),
housing (is real estate appreciating, and
are homes affordable?), crime (how’s the
crime risk?), convenience (are commutes
onerous?), cultural and recreational
amenities (do you have access to
libraries, museums, and entertainment?), and an overall sense of pleasantness (are the skies sunny?).
These efforts helped us identify this
year’s No. 1 city: Fishers, Ind. This
Indianapolis suburb is no stranger to Best
Places. In 2010, Fishers ranked No. 8 on
our list. And in 2012 it came in at No. 12—
the same year that its neighbor to the
west, Carmel, Ind., was named the Best
Place to Live in America.
Yet Hamilton County, Indiana, isn’t the
only place where you can find your bliss.
Our Best Places list is as diffuse as ever,
with our top 10 communities scattered
throughout every U.S. region—the West
Coast, the Rockies, the Great Plains, the
Midwest, the Northeast, the Southwest,
and the Deep South.
The point isn’t to thrust our definition
of what the good life is onto you. It’s to
help you find the right town that fits your
own hopes and goals—and your budget.
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O P E N I N G S P R E A D : P H O TO G R A P H B Y T Y C O L E . T H I S S P R E A D, C L O C K W I S E F R O M T O P L E F T: C O U R T E S Y O F D I C K I N S O N ;
C O U R T E S Y O F B E AV E R TO N ; C O U R T E S Y O F O R E M ; J OYC E K I M ; C O U R T E S Y O F ST. P E T E R S
THE BASIC ELEMENTS that make
somewhere a great place to live
rarely change—good schools, a good
economy, good neighbors. Yet around the
edges, preferences tend to shift over time.
When MONEY launched its inaugural
Best Places to Live list in 1987, for
instance, crime was still rising nationally—so interest in personal safety was at
a high. Later, when unemployment was
soaring during the global financial crisis,
access to good job opportunities was
considered a big priority.
Today, more than eight years into this
economic recovery and five years into the
national real estate rebound, there are
different concerns. While home prices
have come back in general, the recovery
has been uneven. Rising demand for
urban living from millennials and their
baby boomer parents—some of whom
are downsizing—has pushed up prices for
homes and condos in city centers.
That has created an opportunity,
“driving a lot of people to look at the
suburbs,” said realtor.com chief economist
Danielle Hale. “It’s not only the price
difference, but all the other things that you
get for the money, like school quality.”
Being the contrarians and bargain
hunters we are, the journalists at MONEY
jumped on this trend. For this year’s Best
Places to Live list, we chose to focus on
towns with a population of 10,000 to
100,000, to avoid the biggest cities while
shining a light on smaller towns and
affordable suburbs.
From that starting point, MONEY
sifted through data at a granular level. We
examined dozens of different variables
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OCTOBER 2017
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growth through entrepreneurs,” says Schoenrock.
“It was incredibly unique and certainly not
something I’d seen on the West Coast.”
Don’t expect all work and no play in this
vibrant city. The redeveloped downtown boasts
several restaurants and boutiques and a farmers’
market that was recently voted one of Indiana’s
best. (It doesn’t shut down in the winter, either—
it just shifts indoors.) The Nickel Plate District
Amphitheater hosts summer concerts and
movies, and cold-weather festivals in fall and
winter. And participating businesses display the
work of local artists for an annual arts crawl.
Fishers has emphasized its green space too,
and features 24 parks and 104 miles of nature and
multiuse trails. Flat Fork Creek Park offers the
highest peak in Hamilton County—perfect for
sledding during Indiana’s snowy winters.
And while some residents complain that
there aren’t enough independent eateries, the
city is planning to remedy that with the Yard,
a $40 million development that will include up to
18 new restaurants, plus entertainment venues
and a 3,000-square-foot culinary incubator for
food entrepreneurs.
Jennifer Vail, a human resources manager who
lives here but commutes to Indianapolis for work,
says she and her husband chose Fishers in 2005
because it offered a low cost of living alongside
high community standards, good schools, and
“top-notch” local services. During her 12 years in
Fishers, Vail says she’s seen a lot of positive
change and growth. Of course, growth has its own
issues: “Traffic has become a noticeable challenge
in the past 15 years,” she says. “However, they are
constantly widening roads, putting in roundabouts, and making infrastructure improvements
to ease some of the congestion.”
The increased traffic is a small price to pay,
she adds. “It’s a wonderful place to live. There’s
certainly no shortage of things to do. It’s kind of
anything anyone would want, aside from having
a mountain range or beach in your backyard,”
says Vail, 36. “A small part of me doesn’t want the
secret of Fishers to get out.”
P H O TO G R A P H S B Y T Y C O L E ( F I S H E R S ) ; I C O N S : O K S A N A L AT Y S H E VA , T H E N O U N P R O J E C T
34, was looking for a new home for
his video production company, Fishers—a small city just
16 miles from Indianapolis—was at the top of his list. His
company of 20 employees had outgrown its space in another
Indianapolis suburb, and he and his partner craved an
environment that would nurture the team’s creative spirit.
“We wanted to be in Fishers because of the energy and
momentum we saw coming there,” says Walls. “So I met with
the mayor, and he showed us the space we’re in now. A month
and a half later, we moved in.”
That was in 2015, when Walls’ 12 Stars Media relocated to
the Nickel Plate District, the downtown area of Fishers that
has been developed as a walkable destination for dining,
shopping, and working. Today, Walls says his team loves their
loftlike space and the ability to walk to nearby restaurants for
lunches and meetings. And Walls himself lives within minutes
of the office, often jogging to work. “Fishers is safe and quaint
and full of young families,” says Walls, who has three boys with
his wife, Jessica. “But what makes it unique is this huge
emphasis on Fishers as a place with an entrepreneurial spirit.”
That startup energy is no accident. Several big companies
already have operations within the city’s borders, including
student-loan provider Navient and Roche Diagnostics, but local
leaders have emphasized creating more jobs and inviting more
employers to the community. Major redevelopment projects
totaling $90 million downtown have made Fishers attractive to
businesses looking to relocate. The city has also invested in
Launch Fishers, a 52,000-square-foot coworking space aimed at
giving entrepreneurs and tech startups a place to grow.
The efforts are paying off: Moody’s Analytics projects 11.6%
job growth in the area by 2021. Stanley Security just relocated
to Fishers in August, bringing 350 jobs, while high-tech firm
Memory Ventures moved to Fishers from California in 2015.
Memory Ventures CEO Anderson Schoenrock says he was
impressed by the tour community leaders gave him. “It gave me
a sense that the city was very committed to this vision of
building a city around entrepreneurship and driving economic
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around Allen, an affluent
suburb just north of Dallas. The city of 96,000 residents
has worked to actively create economic opportunities within
its borders, and the efforts are bearing fruit: Allen expects a
whopping 17% job growth by 2021 and has seen $1.6 billion of
development breaking ground in 2017 alone. A number of tech
and cybersecurity companies have recently committed to the
area, bringing with them hundreds of jobs. Data company
CyrusOne purchased 66 acres of land to support an expected
$1 billion data campus in Allen in the coming years.
M O N E Y. C O M
OCTOBER 2017
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A $91 million convention center and hotel
complex will start serving patrons in 2018,
while international real estate firm Hines recently
announced plans for the Strand, a 135-acre
mixed-use development that will bring office
space, retail outlets, residential options, and
a greenbelt and waterway.
Chanda Reddy, a physician who lives and
works in Allen, says the growth has also
attracted a more diverse population—something
she appreciates. “It’s become a lot more
multicultural in the last 12 or 13 years,” says
Reddy. “I absolutely love Allen. A lot of the
Dallas suburbs don’t have all the restaurants,
shopping, and things to do right in town.
Allen does.”
Reddy, 41, and her husband especially enjoy
taking their kids to Watters Creek, a scenic
shopping center that features restaurants and
boutiques surrounding a green area where
families can relax. “The adults all sit on the
patio, drink wine, listen to live music, while the
kids can play on the green, and we can keep an
eye on them,” she says.
Indeed, there are plenty of attractions for
families, including the impressive Don
Rodenbaugh Natatorium, a fully enclosed indoor
water park that also a features a rock-climbing
wall; a brand-new park for wakeboarding; and
one of the largest outdoor skate parks in Texas.
The Courses at Watters Creek offers an 18-hole
golf course for traditional golfers, along with a
family-friendly six-hole course.
The school system is also a big draw; the
district has been ranked as one of the best in the
state of Texas, and Allen students routinely
outperform the state averages in both reading
and math. There is only one high school in town,
with more than 5,000 students; it also boasts one
of the largest high school football stadiums in the
country. The size can be daunting, but Reddy
says she’s excited for her kids to have “lots of
opportunities you don’t get in some of the
smaller high schools. They can really do
anything they want.”
P H O TO G R A P H S B Y N A N C Y N E W B E R R Y ( A L L E N ) ; J OYC E K I M ( M O N T E R E Y PA R K )
GROWTH IS THE BUZZWORD
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HENRY LO, 42, moved to Monterey Park, Calif., eight
years ago—and he’s never looked back. Born and raised
in Los Angeles, Lo’s work as a field representative for a
California state assembly member frequently takes him to
various locations throughout the San Gabriel Valley, and he
was seeking a place to settle that was central to a number of
destinations in the area. Monterey Park, situated eight miles
east of downtown L.A., fit the bill.
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“Monterey Park is a hub in every sense of the
word. It’s a transportation hub because we abut
three different freeways and are close to both
the local light rail and the regional Metrolink
train,” says Lo.
Indeed, Monterey Park’s enviable location
makes it relatively easy to commute throughout
the relatively pricey L.A. area. But this small
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city of just eight square miles also offers plenty of
recreational opportunities within its borders, especially for
families who want to unwind after work and school. Residents
enjoy a weekly farmers’ market, more than a dozen parks, and
the Barnes Park Amphitheater, which hosts a number of free
concerts and an annual Fourth of July fireworks and live
entertainment event.
Monterey Park is a crossroads in other senses as well.
“We’re a cultural hub because we have a number of immigrant
communities in the area,” Lo says, referring to the mishmash
of the city’s population, which includes not only a large
Chinese community but also Latinos, Japanese, Vietnamese,
and others. “And we’re an educational hub because we have a
community college within our borders, are 10 minutes from
Cal State–L.A., and 20 minutes from USC.”
WHAT MAKES YOUR TOWN GREAT? Tell us at letters@moneymail.com.
Thanks to its ethnically diverse population,
Monterey Park is a foodie haven—you’ll find
everything from dim sum to tortas to Hong Kong–
style cafés within minutes of one another. The city
also honors the cultures of its residents by hosting
several events throughout the year, including its
annual cherry blossom festival, as well as Cinco de
Mayo and lunar new year celebrations.
Lo says that visitors might be surprised to
see how many signs in town are in Chinese.
And indeed, the city plans to capitalize on those
ethnic ties in the coming years, by banking on the
hospitality industry. It has already approved the
development of several hotels for the area and
expects to cater to a number of tourists from Asia.
P H O TO G R A P H S B Y J OYC E K I M ( M O N T E R E Y PA R K ) ; C O U R T E S Y O F T H E C I T Y O F F R A N K L I N
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JUST 21 MILES SOUTH of Nashville, Franklin is
heavy with culture, Southern charm, and
hospitality. Founded in 1799, the city has preserved its
history through its Main Street—listed on the National
Register of Historic Places—and a number of Civil War–
era homes.
But don’t get stuck in the past: Franklin has balanced
the traditional with the modern, offering plenty of jobs
and amenities within its borders. While you’ll see few
chain stores as you stroll through Franklin’s downtown,
just minutes away is the CoolSprings Galleria, a major
shopping center. Several health care–related employers
are here in town, including Community Health Systems,
Optum, and Healthways. You’ll also find Nissan’s North
American headquarters here, along with outposts for
other big companies such as Verizon and Mars
Petcare—helping keep unemployment low.
Denise Mitchell, a chemist at Mars, has lived in
Franklin since 2005 and says the presence of so many
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businesses helps keep property taxes low.
More important, the city offers excellent
schools—something her two teenagers
have benefited from. Her 17-year-old daughter
is a senior in Franklin High School’s
International Baccalaureate program, while
her 16-year-old son has received specialized
services to help manage dyslexia. “The schools
are incredible,” says Mitchell. “If there’s
something a kid wants to do, they will find a
way to provide it.”
Mitchell adds that the cultural scene in
Franklin has exploded in the past decade.
“When I first moved here, I’d go to Nashville
to do something fun on the weekends. Now
I almost always stay in Franklin,” she says.
The music scene is a big draw—you can find live
performances every night of the week at local
bars and restaurants, while the renovated
Franklin Theatre draws major acts and even
served as the filming site for a number of
concerts on the TV show Nashville. The
Pilgrimage Music Festival, a new annual
event that began in 2015, celebrates the area’s
culture and cuisine while attracting stars
like Justin Timberlake.
OCTOBER 2017
M O N E Y. C O M
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SITUATED ON THE TENNESSEE state line, the city of
Olive Branch offers an escape from neighboring
Memphis, with a high quality of life, a historic small-town
atmosphere, and a moderate commute.
“Olive Branch is so different from Memphis, which is just
across the state line. We don’t have the crime or the hustle and
bustle of the city—it feels like you’re much further away from
Memphis than you really are,” says Jay Nichols, who was born
and raised in Olive Branch and now works for the city.
Nichols, 45, says Olive Branch has experienced incredible
growth from when he was a kid. The population has exploded,
rising from 3,567 in 1990 to 37,500 today, and residents no
longer have to leave town for basic amenities. “There’s a level of
comfort and safety here in Olive Branch that’s unique. It’s just a
great place to raise your kids,” says Nichols.
Indeed, families are drawn to Olive Branch for its good
schools, safe streets, and family-friendly activities, and its
affordability—the median home price is just $185,092. There’s a
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weekly farmers’ market at the city hall, and the
city hosts outdoor movies on the lawn of Wesson
House, a Mississippi landmark that anchors Olive
Branch’s Old Towne area. Brussel’s Bonsai,
a 175,000-square-foot nursery dedicated to the
miniature trees, attracts visitors from outside
Olive Branch as well—especially during its annual
bonsai celebration every Memorial Day weekend.
While there aren’t many independent
restaurants, Olive Branch has been attracting
some new businesses—like Mississippi Ale House,
a craft-beer taproom, and Board & Brush, a
studio where patrons can learn woodworking and
painting while sipping wine with friends.
The city also prides itself on serving people
from all walks of life. It recently opened an allinclusive playground whose amenities include a
wheelchair-accessible swing set.
P H O TO G R A P H S C O U R T E S Y O F T H E C I T Y O F O L I V E B R A N C H ; C O U R T E S Y O F T H E C I T Y O F D I C K I N S O N ; C O U R T E S Y O F T H E C I T Y O F S C H A U M B U R G ; C O U R T E S Y O F T H E C I T Y O F L O N E T R E E
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43490%8-32 1)(-%2,31)46-') 1)(-%2,397),30(-2'31) 43490%8-32 1)(-%2,31)46-') 1)(-%2,397),30(-2'31) 43490%8-32 1)(-%2,31)46-') 1)(-%2,397),30(-2'31) 43490%8-32 1)(-%2,31)46-') 1)(-%2,397),30(-2'31) THANKS TO the North Dakota
oil boom, Dickinson has
become one of the fastestgrowing towns in the U.S. It
boasts an unemployment rate
of 4% and a strong economy
centered on the energy
industry as well as agriculture
and manufacturing.
Yet Dickinson had
attractions of its own even
before the shale-oil frenzy
upended its economy. Long
known as the gateway to
Theodore Roosevelt National
Park, the town is also home to
Dickinson State University and
the Dickinson Museum Center,
a complex whose holdings
range from Jurassic-era
findings to artifacts from the
American settlers. There’s
also the Ukrainian Cultural
Institute, which hosts
workshops on traditional
Easter egg decorating.
Dickinson’s real draw,
however, is the amazing
breadth of available outdoor
activities: from fishing and
big-game hunting to hiking,
biking, and horseback riding.
Residents can ride or trek the
144-mile Maah Daah Hey Trail,
and sometimes even catch the
aurora borealis coloring
the night sky.
DENVER SUBURB Lone Tree is
a quick drive or light-rail ride
into the city, making for easy
work commutes or nights
out—but there is plenty to
keep residents occupied
within their own boundaries.
Despite its relatively small
size, Lone Tree boasts its own
arts center, which hosts
frequent music and dance
performances, and the state’s
biggest shopping center, the
Park Meadows Mall. It’s also
home to numerous parks and
running and biking trails,
including the Bluffs Regional
Park and Trail, which delivers
great views of the Colorado
Front Range mountains and
3.5 miles of trails to explore.
The town’s main hospital,
Sky Ridge Medical Facility,
recently underwent an
expansion and serves as one
of the largest local employers,
helping to fuel one of Lone
Tree’s top draws: its steady
economy. The town has an
unemployment rate of only
2.7%, and residents here earn
a median income of more than
$116,000 a year.
FOR THOSE wanting a
small-town feel while still
enjoying the perks of a big city,
North Arlington delivers.
Located less than 15 miles
from New York City’s Financial
District, this spot gives
commuters an ideal home
base, with excellent schools
and low crime.
Sports fans will enjoy
easy access to the nearby
Meadowlands Sports
Complex, which contains
MetLife Stadium, home to the
NFL’s New York Giants and
New York Jets teams, as well
as the Meadowlands
Racetrack, which hosts the
annual Hambletonian Stakes.
In good weather, residents
can stretch out and enjoy the
outdoors at the 85-acre
Riverside County Park, which
has tennis courts, bocce,
a dog park, a fitness center,
and a playground. On cold or
rainy days, take a shopping
trip to the nearby Secaucus
outlets.
SCHAUMBURG holds a firm
place in Chicago’s so-called
Golden Corridor, a stretch
northwest of the city that is
known as an economic and
manufacturing powerhouse.
While the region hosts several
Fortune 500 companies,
Schaumburg itself claims it is
home to more businesses than
any other place in Illinois,
outside of the Windy City.
Residents benefit from the
town’s resources. You can take
in a performance at the Prairie
Center for the Arts or visit the
Trickster Art Gallery. Families
will enjoy the Legoland
Discovery Center, while
shoppers can stroll Woodfield
Mall, one of the largest in
the country, with nearly 300
stores and restaurants.
The village’s facilities are
also a point of pride. A stroll
through the Town Square may
take you past a concert or a
farmers’ market, depending on
the day. Schaumburg’s district
library is one of the largest in
the state, with more than
a million visitors each year.
Investment in the town’s parks
shows too: Its newest
children’s space, Bison’s Bluff
Nature Playground, opened
this spring.
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COU RT ESY O F T H E C I T Y O F B OZ E M A N ; COU RT ESY O F T H E C I T Y O F N EW B E R L I N
IT DOESN’T GET much more scenic than
Bozeman, a picturesque college town
nestled among four mountain ranges and located
just 90 minutes from Yellowstone National Park.
A paradise for outdoor enthusiasts, Bozeman
boasts easy access to world-class skiing, fishing,
hiking, rafting, and more. It also offers a charming
downtown area and a surprisingly vibrant
cultural scene, thanks to the presence of Montana
State University and arts and music events like
the annual Sweet Pea Festival.
But it’s also a destination for urban refugees
seeking a higher quality of life—some 14% of
residents walk or bike to work, and the average
commute time is just 13 minutes—with access to
great jobs. In the past two decades, the city has
become a booming hub for high-tech companies
and entrepreneurs. Oracle bought local tech giant
RightNow Technologies for $1.5 billion in 2011,
enabling many former employees (and newly
minted millionaires) to launch their own startups.
The Bozeman Technology Incubator offers free
mentoring to all local tech and manufacturing
businesses. The economy is expected to keep
expanding; Moody’s Analytics predicts 11.4% job
growth over the next five years.
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A WESTERN SUBURB of Milwaukee, New Berlin is home
to outposts of several multinational corporations: Danish
bioscience company Chr. Hansen, along with robotics
maker ABB and SoftwareONE, both Swiss companies. And
aerospace industry supplier B/E Aerospace Lighting &
Integrated Systems (formerly Emteq) is headquartered in
New Berlin. It’s no wonder the local unemployment rate is
just 3.6%.
But this previously agricultural town also honors its
past. While the city was incorporated in 1959, its pioneer
history dates back to the early 1830s—and New Berlin is
committed to remembering it. An active historical society
helps preserve a 4.5-acre park with buildings from the
1800s, including the Meidenbauer Log Cabin, the WintonMartin House, and a little red schoolhouse. New Berlin is
also home to Weston’s Antique Apple Orchards, the oldest
active orchard in Waukesha County. The orchard and its
red-roofed barn were among the first Wisconsin landmarks
to appear on the National Register of Historic Places.
Residents also enjoy good schools: New Berlin West
High School was ranked 11th in the state, boasting a 98%
graduation rate. The city also offers plenty of family
activities, screening movies outdoors during the summer
and hosting an annual family campout: Residents pitch
tents in Malone Park to enjoy a scavenger hunt, s’mores,
and a night under the stars.
THOUGH IT’S LOCATED a
mere seven miles west of
Portland, in the Tualatin
Valley, don’t think of
Beaverton as just another
cookie-cutter suburb. The
city of 97,000 has its own
personality, thanks to a
thriving restaurant scene,
one of the most ethnically
diverse populations in the
area, and big local employers
like Nike (which is
headquartered here) and
IBM.
Quality of life ranks high:
Commutes average a
relatively modest 22 minutes,
and residents enjoy more
than 100 scenic parks.
Beaverton also offers easy
day trips to breathtaking
recreation options—like the
Oregon coastline, just
90 minutes away, or Mount
Hood, a premier skiing
destination.
There are 77 vineyards
in the Tualatin Valley; Cooper
Mountain Vineyards and
the Ponzi Historic Estate are
two popular destinations
in town for wine tasting and
other events.
OCTOBER 2017
M O N E Y. C O M
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America, Waltham is located
on the Charles River, 10 miles
from central Boston. Its easy
access to Route 128, the
Massachusetts Turnpike, and
Route 2—not to mention an
MBTA station—makes
commuting relatively easy.
But residents don’t
necessarily have to “head into
town” for work; there are
plenty of big employers within
Waltham, including defense
contractor Raytheon,
pharmaceutical manufacturer
AstraZeneca, and Dutch
printing company Cimpress
(formerly Vistaprint). It’s also
the home of both Brandeis
and Bentley universities.
The presence of both jobs
and academia spells good
news for the city’s tax base.
Diversity is also a plus here:
Approximately one in four
residents was born outside
the U.S. That’s reflected in the
area’s restaurants, especially
along Waltham’s renowned
Moody Street, where you can
dine on everything from pho
to tapas to tandoori kebabs.
LOCATED 45 MILES south of
Salt Lake City, Orem is safe,
affordable, and friendly. Crime
is low, and average commutes
(often to nearby Provo) are a
breezy 16 minutes. Home
prices are relatively modest,
while property taxes average
$1,392 a year.
The city has invested in
family-oriented amenities:
A brand-new water playground
features waterfalls designed
to resemble the nearby
landscape. Last year the city
debuted its All-Together
Playground, the first
in Utah County to feature
accommodations for specialneeds children, including
ramps; rides for wheelchairbound kids; and a safe, soft
foam floor. The community
also offers programs like
CoderDojo, a weekly coding
club for kids.
Because it sits between
Utah Lake to the west and the
regal Wasatch Mountains to
the east, there’s no shortage
of scenic views or outdoor
activities. The 17-mile Murdock
Canal Trail connects Orem
with a number of cities to
the north, while Mount
Timpanogos Park is a beautiful
site for hiking and picnics.
ST. PETERS IS an ideal
place to start a family in
the St. Louis area—it’s just
25 miles from downtown
(commutes average
25 minutes), and housing is
very affordable, with median
home prices clocking in at
$208,666.
While St. Louis provides
plenty of arts and dining
opportunities, St. Peters aims
to bring some culture closer to
home. The St. Peters Cultural
Arts Centre is devoted to
promoting the arts through
classes, day trips, art shows,
and events like its Time for Tea
speaker series. The Celebrate
St. Peters festival, meanwhile,
features live music, fireworks,
carnival games, and rides at
Lakeside Park.
Prefer to be active? The
city offers more than 1,200
acres of parkland in 25 parks,
along with 20 miles of paved
pedestrian trails, 12 pavilions,
and dozens of playgrounds,
baseball diamonds, and soccer
fields. Amateur and serious
athletes alike flock to
St. Peters’ state-of-the-art
236,000-square-foot Rec-Plex,
a fitness and recreation center
that hosted the 2004 Olympic
Diving Trials.
1%77%',97)887
M O N E Y. C O M
98%,
OCTOBER 2017
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TO CREATE MONEY’S
Best Places to Live ranking,
we looked only at places with
populations between 10,000
and 100,000. We eliminated
any place that had more than
double the national crime
risk, less than 85% of
its state’s median household
income, or a lack of ethnic
diversity. This gave us
2,400 places.
We then collected about
170,000 different data points
to narrow the list. Our
partners at realtor.com
contributed data on housing
market costs and growth. We
also considered data on each
place’s economic health, cost
of living, public education,
crime, ease of living, and
amenities, all provided by
research partner Witlytic. We
put the greatest weight on
economic health, cost of
living factors, and public
school performance.
Finally, reporters
researched each spot,
interviewing residents,
checking out neighborhoods,
and searching for the kinds of
intangible factors that aren’t
revealed by statistics. To
ensure a geographically
diverse set, we limited the list
to no more than four places
per state and two per county.
In the top 15, we allowed only
one place per state.
Rankings derived from
more than 70 separate
types of data. For full
methodology and sources, go
to money.com/
BPLmethodology.
T H I S PA G E : P H OTO G R A P H S C O U R T E SY O F T H E C I T Y O F WA LT H A M ; C O U R T E S Y O F T H E C I T Y O F O R E M . O P P O S I T E PAG E , F R O M L E F T: P H OTO G R A P H B Y R O B H O WA R D ; G E T T Y I M A G E S ( 3 )
36)1
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OVER THE 30 YEARS SINCE MONEY’s Best Places to Live
first launched, the definition of a Best Place has shifted
repeatedly. In its first year, New England life dominated
the top of the list: Nashua, N.H., took the No. 1 slot, with
two Connecticut towns in the top five. A few years later,
Western cities were in favor: 1990’s top five included
Seattle, Tacoma, and Bremerton, Wash., plus San
Francisco and—a nod to the Midwest—Columbia, Mo.
Two U.S. cities have made it into the top five slots a halfdozen times: San Francisco, which dominated during the
list’s early years, and Louisville, Colo., a Rocky Mountains
suburb that has benefited from Denver’s recent boom.
The pairing reflects one of the list’s broadest changes. In
many big cities, soaring housing prices have sent
residents looking for better value in suburbs and
between the coasts—exactly the kinds of spots that
dominate this year’s list. —Rachel F. Elson
3*6%2/-2+
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Over three decades, these spots have made the most
appearances at the top of MONEY’s Best Places to Live.
HOW MANY TIMES IN THE TOP FIVE?
\
Louisville, Colo.
The suburb has benefited in recent years
from its hot job market
and outdoorsy culture.
\
San Francisco
Last appeared atop the
list in 2002, in the wake
of the dotcom bust.
\
Rochester, Minn.
Home of the Mayo
Clinic, this town dominated during the 1990s.
\
Seattle
A recent boom has
pushed housing out of
reach for many people.
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M O N E Y. C O M
OCTOBER 2017
37
38
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03'%8-32
Fishers Indiana
Allen Texas
Monterey Park California
Franklin Tennessee
Olive Branch Mississippi
Dickinson North Dakota
Lone Tree Colorado
North Arlington New Jersey
Schaumburg Illinois
Bozeman Montana
New Berlin Wisconsin
Beaverton Oregon
Waltham Massachusetts
Orem Utah
St. Peters Missouri
Carmel Indiana
Avon Indiana
Santa Monica California
Grapevine Texas
Wylie Texas
Brentwood Tennessee
Greenwood Indiana
Bedford Texas
Saddle Brook New Jersey
Bismarck North Dakota
Newton Massachusetts
Wheaton Illinois
Villa Park Illinois
Reston Virginia
Ashburn Virginia
Smyrna Tennessee
Fond du Lac Wisconsin
Parsippany–Troy Hills New Jersey
Lebanon Tennessee
Des Plaines Illinois
Clifton New Jersey
Wooster Ohio
Concord North Carolina
Rockville Maryland
Howard Wisconsin
Mequon Wisconsin
O’Fallon Missouri
Fayetteville Arkansas
Bend Oregon
Rogers Arkansas
Lower Merion Pennsylvania
Midlothian Virginia
Meridian Idaho
Superior Colorado
Louisville Colorado
43490%8-32
86,357
96,045
62,630
72,955
37,504
24,771
14,733
15,563
77,557
42,435
40,243
97,229
63,053
95,742
57,278
90,238
18,490
93,974
51,286
46,235
42,319
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$236,167
$323,676
$533,083
$433,996
$185,092
$227,417
$411,333
$446,500
$246,500
$313,525
$255,633
$353,316
$456,666
$282,173
$208,666
$236,167
$184,359
$533,083
$206,541
$323,676
$433,996
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11.6%
17.0%
4.7%
12.3%
11.8%
8.9%
7.9%
3.9%
3.0%
11.4%
4.6%
8.7%
4.6%
12.5%
10.2%
11.6%
8.5%
4.7%
10.6%
17.0%
12.3%
$87,043
$104,524
$57,419
$82,334
$62,958
$71,866
$116,761
$73,885
$73,824
$49,303
$74,983
$58,785
$75,106
$54,515
$71,718
$108,349
$78,915
$82,963
$80,812
$82,763
$136,383
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232
278
208
214
200
245
205
189
186
190
142
201
226
202
187
187
263
232
232
208
24
29
27
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23
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24
28
28
13
20
22
23
16
25
23
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92.3%
96.0%
90.0%
92.0%
90.0%
95.0%
93.0%
86.0%
98.0%
81.0%
83.0%
92.0%
88.7%
97.0%
97.0%
92.0%
96.2%
94.9%
96.0%
57,389
$141,110
7.6%
$54,564
187
24
91.4%
49,016
13,818
71,211
86,175
53,957
22,371
61,319
51,357
46,434
42,835
53,223
31,019
59,971
85,229
25,936
89,301
65,215
18,556
23,558
86,094
85,793
84,505
62,837
59,668
68,156
92,657
13,410
20,661
$206,541
$446,500
$255,000
$456,666
$262,666
$262,666
$463,149
$478,533
$202,145
$130,900
$397,341
$267,250
$246,500
$293,000
$117,166
$196,083
$425,333
$152,750
$250,549
$208,666
$165,166
$320,383
$167,133
$277,833
$245,500
$242,893
$396,095
$396,095
10.6%
3.9%
3.5%
4.6%
3.9%
3.9%
3.1%
14.7%
11.1%
4.4%
2.2%
10.5%
3.0%
2.1%
4.4%
8.3%
5.8%
4.0%
4.6%
10.2%
6.1%
9.8%
8.8%
4.5%
5.1%
9.2%
7.1%
7.1%
$61,579
$77,289
$60,971
$121,126
$86,875
$69,033
$112,722
$120,837
$52,882
$47,942
$87,057
$43,761
$65,387
$71,172
$43,054
$54,579
$100,158
$60,010
$106,350
$77,258
$40,835
$55,893
$54,750
$117,438
$77,158
$62,899
$116,312
$95,091
232
213
200
201
189
189
197
197
208
187
205
208
189
205
167
214
202
187
190
202
218
157
218
205
206
210
245
245
24
23
14
24
27
25
25
30
27
17
25
24
27
24
16
26
29
17
21
27
16
15
17
24
24
20
24
21
94.0%
92.0%
86.0%
96.0%
91.1%
89.0%
87.0%
93.0%
94.0%
89.0%
97.0%
96.0%
87.8%
84.0%
95.9%
90.0%
89.0%
92.0%
98.0%
90.9%
81.4%
77.0%
91.5%
97.0%
88.0%
84.0%
92.0%
92.0%
NOTES: MEDIAN HOME PRICE REFERS TO MEDIAN SALE PRICE FOR THE COUNTY EXCEPT IN DICKINSON, N.D., WHERE IT DENOTES THE MEDIAN LISTING PRICE. SOURCES: WITLYTIC, REALTOR.COM, SYNERGOS
TECHNOLOGIES, MOODY’S ANALYTICS, NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION, DEPARTMENT OF EDUCATION, KAISER FAMILY FOUNDATION
MONEY
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72
M O N E Y. C O M
OCTOBER 2017
PHOTOGRAPHS BY MICHAEL CHINI—TIME INC. STUDIOS
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OCTOBER 2017
M O N E Y. C O M
73
I
&IWX'EWL&EGO'EVH
T’S BEEN EIGHT YEARS
since the end of the
Great Recession, and credit cards are back.
Today, 171 million Americans have at least
one card in their wallet, the highest number
since 2005. Consumers also owe more than
$1 trillion in revolving credit card debt, an
all-time record. Even the percentage of
consumers with less-than-stellar credit who
have access to plastic is nearly back to pre-crisis levels.
A strengthening economy and rising demand means
one thing: increasing competition for your business. “It’s
a really good time to be a credit card customer,” says Jim
Miller, senior director of J.D. Power’s banking practice,
adding that a growing number of card issuers are coming
out “with new products that offer rich sign-up bonuses,
increased cash back rewards, and new benefits.”
With more features, though, comes more confusion.
Nearly two-thirds of consumers surveyed by Experian are
“overwhelmed” by all the card options now available to
them. To help you cut through the clutter, MONEY
teamed up with NerdWallet to identify the best cards for
you. We considered several factors, including, How widely
accepted is the card? What’s the overall cost when all fees
and the annual percentage rate (APR) range are factored
in? And how good are all the perks and rewards?
There’s no such thing as a single card that’s best for
everyone. That’s why this year, MONEY picked the best
offerings in 10 categories. You may use one card for most
of your transactions, in which case a cash back option
may be your best bet. But you may also turn to a smallbusiness card for nonpersonal expenditures, or an airline
card if you’re planning a big trip; or a balance transfer card if you’re seeking to reduce your debt. “You can
maximize your benefits and rewards based on which
cards you use for which purposes,” Miller says.
All within reason, of course. Because ultimately, the
best use of your card—no matter which one you choose—
is to pay off your balances in full every month.
74
M O N E Y. C O M
OCTOBER 2017
Cash back credit cards are
popular for obvious reasons. Yet
whenever someone promises you
money for nothing, it’s time to read
the fine print.
While these cards give you points
on purchases that can be redeemed
for cash, in some cases entire
categories of spending may not
qualify. Conversely, some cash back
cards offer accelerated rewards on
certain categories like travel, dining
out, or warehouse club purchases.
But if that’s not where you do the
bulk of your spending, you won’t see
a big payoff.
Also, check to see if you have to
meet a minimum spending threshold
before you begin earning points
toward getting cash back. And since
you’ll want to earn points quickly,
make sure you understand the card’s
earnings rate formula.
Finally, avoid cards that cap or
restrict the amount of rewards you
can earn, or make it complicated to
earn additional points—for instance
by routinely switching up spending
categories that garner a bonus.
;MRRIV
CITI DOUBLE CASH
REWARDS
Two points for every $1 spent and paid off
ANNUAL FEE
$0
APR RANGE
14.49%–24.49%
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MONEY’S REVIEW.
WHY IT’S A WINNER: The best cash back
cards let you earn points with few
restrictions. And that’s the case for
Citi Double Cash, which gives you
points worth $2 back for every $100
you spend—on anything. There are
no category restrictions. No rotating
categories to keep track of. And no
caps on the amount of rewards you
can earn. This Citi Mastercard also
has no annual fee and offers a belowaverage APR if you have good credit.
THE CATCH: The way Citi Double Cash
shows you the money is a bit complicated. You don’t get it all at once. Instead, you get half upfront and half
when the purchase is paid off. But
that can be used as motivation to pay
off your purchases quickly rather
than letting them rack up interest.
&IWX6I[EVHW'EVH
Credit card reward programs can
put serious money back in your
pocket. But their rules can also be a
confusing jumble of miles, points,
and redemption options you have to
sift through.
The best cards are the ones that
make it simple both to earn and
redeem your rewards. The best
programs also offer you more than
one point or mile per dollar spent,
with no cap on the amount you can
earn and no expiration dates for
points or miles already earned.
This is actually a good time to be
looking for a new rewards card. As
competition heats up, the best ones
are sweetening the pot with buckets
of bonus points just for signing up.
One caveat: Though you may prefer
no annual fees, don’t make that a
deal breaker here. Many good cards
in this category charge annual fees.
;MRRIV
50,000 “ultimate rewards” points if
you make $4,000 in purchases within
the first three months. That’s a high
threshold, but if you hit it, those
points could be worth as much as
$750 toward booking travel through
Chase’s Ultimate Rewards portal.
This makes Chase Sapphire Reserve
ideal if you’re planning for a big trip.
CHASE SAPPHIRE RESERVE
REWARDS
Three points for every $1 spent on travel and
dining out
One point for every $1 spent on everything else
$300 annual travel credit
Access to 900-plus airport lounges worldwide
ANNUAL FEE
$450
APR RANGE
16.99%–23.99%
MONEY’S REVIEW.
WHY IT’S A WINNER: Despite an ex-
tremely high annual fee, this Chaseissued Visa actually has a lot going
for it. For starters, it gives users a
very good return on basic spending
and accelerated rewards in many
common categories, including airfare, hotel stays, and dining out. And
if you’re a frequent global traveler,
there are plenty more valuable
perks. For instance: free rental car
insurance; access to more than 900
airport lounges worldwide; a $100
credit if you enroll in TSA PreCheck
or Global Entry; and no fees on
transactions made while overseas.
THE CATCH: The sticking point is obvi-
ous: the $450 annual fee. However,
the $300 annual travel credit—which
can be used to cover costs like baggage fees or seat upgrades—goes a
long way toward offsetting that annual fee if you’re a globe-trotter.
Plus, there’s a sign-up bonus of
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&EPERGI8VERWJIVW
If you’re paying off credit card
debt at a high interest rate, balance
transfer cards with a low APR can
buy you financial breathing room. In
fact, cards that offer 0% interest on
balance transfers are a responsible
way to tackle your debts—but only if
you resist the temptation to turn
around and load them up with new
purchases (which could be charged a
much higher APR).
The best credit cards for balance
transfers will offer you 0% rates for
an extended stretch of time—at least
more than a year—combined with no
fees on that balance transfer.
;MRRIV
BANKAMERICARD
REWARDS
This card has no rewards.
ANNUAL FEE
$0
APR RANGE
0% on transfers and purchases for the first 15
billing cycles, then 12.99% to 22.99%
OCTOBER 2017
M O N E Y. C O M
75
MONEY’S REVIEW.
WHY IT’S A WINNER: BankAmericard’s
introductory 0% APR on transfers
and purchases lasts 15 billing cycles,
making it ideal if you need more than
a year to pay down your debt.
While that’s not the longest
0% window available—Citi Simplicity’s 0% rate on purchases and
balance transfers, for instance, goes
on for 21 months—the BankAmericard credit card doesn’t charge
any fees on those transfers. Some
credit cards will impose balance
transfer fees as high as 5%, which
can really add up if you’re planning
on shifting a large amount of debt to
the new card.
This makes BankAmericard a
good option if you’re seeking to
transfer balances with a good to
excellent credit score.
THE CATCH: Balance transfers are feefree only if you move your debt within 60 days of opening your account.
After 60 days, the card will impose
a 3% fee on balance transfers. And
Bank of America will not allow you
to make balance transfers from another Bank of America account.
HONORABLE MENTION: BarclayCard
Ring Mastercard.
If you have balances on an
existing Bank of America card and
are looking for a balance transfer, go
with the BarclayCard, which offers
0% on transfers for 15 billing cycles
coupled with no transfer fees for the
first 45 days.
And after its 0% window ends,
the card’s regular APR is a belowaverage variable 13.99%. That makes
this card a good choice for folks who
plan to carry a balance after the
introductory period ends. However,
you will need good to excellent credit
to qualify.
76
M O N E Y. C O M
OCTOBER 2017
&IWX0S[-RXIVIWX
6EXI'EVH
While all credit card users covet
the lowest interest rates they can
get, low-rate cards are particularly
useful for consumers who plan to
carry a balance from time to time.
Keep in mind, though, that a low
APR isn’t the only criteria you
should consider when you evaluate
these cards.
For instance, the annual fees that
some low-rate cards charge can eat
into the money you save on interest.
And while credit cards with 0%
interest may seem tempting, keep in
mind that those 0% offers are
advertising teaser rates. And “no
interest” credit cards can sometimes
have quite high interest rates after
the promotional periods end.
What’s more, if you accrue or
transfer a balance that you fail to pay
off before the end of the promotional
period, some cards will hit you with
deferred interest charges, meaning
you’re liable for all the interest as if
there had never been a teaser rate.
MONEY’S REVIEW.
WHY IT’S A WINNER: A big reason why
we like this Visa card, issued by the
Lake Michigan Credit Union, is that
applicants with excellent credit
(typically defined as having FICO
scores of 720 or higher) can get an
APR of just 7.25%. That means this
credit card’s interest rate is competitive with that of personal loans,
which is unheard of.
Slightly lower rates may be
available from credit unions with
very specialized memberships
(credit unions in general can offer
low rates because their banking
tends to be more community based,
reducing the cost of gathering
assets). However, the lowest rate you
can expect from cards issued by
credit unions serving a broad
audience is usually in excess of 9%.
THE CATCH: This card is issued by a
credit union for residents of the Lake
Michigan area, and you probably
don’t live there. No worries: Anyone
can join the credit union by donating
$5 to the Amyotrophic Lateral Sclerosis Association of Michigan. Then
you can apply for the card.
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7QEPP&YWMRIWWIW
;MRRIV
LAKE MICHIGAN CREDIT UNION PRIME
PLATINUM
REWARDS
This card has no rewards.
ANNUAL FEE
After making a one-time $5 donation to join
the credit union, this card has no annual fee.
APR RANGE
7.25%–15.25%
If you run your own business,
you’ll want a credit card that fits
your company’s needs. For one thing,
business owners are likely to require
much higher spending limits than a
personal card can offer. Plus, a credit
card tailored for small businesses
can make bookkeeping and billing
easier, while giving you better
information about your firm’s
spending patterns. Another advantage: A small-business credit card
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will help you keep your personal and
business finances separate.
What should you look for in a
small-business card? The best ones
make it easy to break out and see
where your money is going each
month with web or app-based tools.
And since your business expenses
are likely to be substantial, look for a
credit card that can help you take
advantage of that higher spending
rate with generous points or miles
through a rewards program.
gram giving you 1.5% cash back on
every dollar spent, regardless of
where you spend your money.
That makes this Capital One smallbusiness card particularly attractive
to entrepreneurs who spend across a
wide variety of categories.
THE CATCH: You will need excellent
credit (a FICO of 720 or higher)
to obtain this card. However, Spark
Cash Select charges no annual
fees, and the card’s cash back program places no cap or expirations
on rewards.
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7XYHIRXW
;MRRIV
CAPITAL ONE SPARK CASH SELECT
REWARDS
1.5% cash back on all purchases
$200 cash bonus if you spend $3,000 in first
three months after opening the card
ANNUAL FEE
$0
APR RANGE
0% introductory APR for the first nine
months, then 13.99% to 21.99%
MONEY’S REVIEW.
WHY IT’S A WINNER: Spark Cash Select
tops this category for several reasons. For starters, it offers you excellent business-friendly benefits like
quarterly and year-end spending
summaries, downloadable purchase
records for importing into Quicken
or Excel, and auto-rental collision
damage waivers through Visa. Capital One will also allow you to add employee cards onto your account for
free. Plus the card offers a simple yet
generous cash back rewards pro-
cards have mechanisms by which
cardholders can see their limits grow
as they build a positive credit profile.
College students with plastic get a
bad rap. Student credit cards, if used
responsibly, can be one of the best
ways to help young adults establish
credit and then build a credit history
that will benefit them later in life.
But while issuers are eager to
extend credit cards to college
students—who they hope will
become their next generation of loyal
customers—there are restrictions. If
you’re under 21, for instance, you’ll
be required to prove that you can
make the minimum payments on
your cards. And if you don’t have a
job or some other source of income,
you will be required to find a
cosigner to qualify.
The best cards for students are
ones that don’t charge any annual
fees, encourage the formation of
good credit habits, and offer rewards. A good student card will also
teach college kids how credit scores
work and how they affect your ability
to borrow.
Most student cards start out
with lower credit limits than their
“grownup” counterparts. But student
;MRRIV
CAPITAL ONE JOURNEY
STUDENT CREDIT CARD
REWARDS
1% cash back on purchases
An additional 0.25% cash back for paying your
bills on time that month
No caps on rewards you earn and no
expirations
ANNUAL FEE
$0
APR RANGE
24.99% variable
MONEY’S REVIEW.
WHY IT’S A WINNER: This Capital One
offering is one of the few “student”
cards that doesn’t require you to be
enrolled in college. It has a generous
1% cash back and lets young adults
boost that rate to 1.25% if they pay
their bills on time each month. So
Capital One Journey relies on positive incentives to instill good financial habits. Another way it does this:
by offering cardholders a quick transition to a higher credit limit after
five months of on-time payments.
The lessons don’t stop there. For
college students, credit can be a
complicated concept. This Capital
One student card tries to help
students cut through that confusion
by giving them access to credit
education tools and credit score
OCTOBER 2017
M O N E Y. C O M
77
monitoring through Capital One’s
CreditWise program.
Capital One Journey is also the
best credit card for students who are
planning to travel or study abroad,
since it charges no fees on foreign
transactions.
THE CATCH: If there’s a knock on this
card, it’s that the 24.99% variable
APR is high relative to other offerings in this category. Discover it for
Students, for instance, starts out
with a 0% introductory APR for six
months then goes to a range of
13.99% to 22.99%. Bank of America
Cash Rewards credit card for students begins with a 0% rate for 12
billing cycles for new purchases and
balance transfers. And then it shifts
to an APR range of 13.99% to 23.99%.
However, if the point of getting a
student card is to introduce your
child to good credit habits—by
paying their bills on time and off
completely—then the APR shouldn’t
be a deal breaker.
The easiest cards to obtain if
you have bad credit are so-called
secured cards, where you have to
put money down as a security
deposit. And that deposit is generally your credit limit. (Be careful: If
a card issuer tells someone with bad
credit that there’s no deposit
needed, it’s probably a marketing
hook. Carefully read the fine print
on any unsecured credit cards for
bad credit; they are likely to carry
very high fees in addition to having
high interest rates.)
A good issuer will let cardholders
know in advance how they can get a
higher limit down the road or
eventually transition to an unsecured card—say, by making a certain
number of consecutive monthly
payments on time.
Provided you pay on time and
keep your account in good standing,
you will eventually get your deposit
back when you close the card or
switch to an unsecured card.
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It can be hard to find good credit
cards for people with bad credit. If
you have a limited credit history or a
poor track record in handling credit
(in general, a FICO score of 600 or
lower, though this can vary a bit
based on the lender) getting credit
isn’t as simple as instant approval.
But cards for folks with bad credit
aren’t impossible to obtain; the
process just takes a little more work.
And these cards come with more
restrictions—such as lower credit
limits—and often charge more in
fees. No surprise.
78
M O N E Y. C O M
OCTOBER 2017
;MRRIV
CAPITAL ONE SECURED MASTERCARD
REWARDS
This card has no rewards.
ANNUAL FEE
$0. But Capital One charges a $49, $99, or
$200 refundable deposit—the amount depends on your creditworthiness.
APR RANGE
24.99% variable
MONEY’S REVIEW.
WHY IT’S A WINNER: Capital One Se-
cured Mastercard charges no annual
fee and comes with helpful features
aimed at getting people with poor
credit back on their financial feet.
For instance, a good card for
people with bad credit will report
their activity to at least one of the
three major credit bureaus, which
will help you build or reestablish good
credit. Capital One Secured Mastercard will report your activity to all
three of the major credit bureaus.
Moreover, Capital One offers
incentives for cardholders to act
responsibly. You can obtain access to
a higher credit line, for example, by
making your first five monthly
payments on time—and without
having to increase the amount of
your deposit. The maximum credit
line for this card is $3,000.
In addition, this card will help
you keep track of your credit score
through access to Capital One’s
CreditWise suite of creditmanagement tools.
THE CATCH: This card offers no rewards or cash back. By contrast,
rival Discover it Secured offers 2%
cash back for spending at restaurants or gas stations and 1% on other
purchases. Of course, if you’re starting off with a $200 spending limit,
even a 2% cash back offer probably
won’t move the needle. Another caveat: Capital One requires that you
have a bank account to fund this
card, so you won’t be approved if
you don’t have a traditional checking or savings account.
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Department stores and specialty
retailers that offer their own credit
cards often push their plastic like an
impulse buy—offering instant
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approval and discounts for signing
up at the register. But it pays to slow
down and read the fine print.
For instance, the average credit
card in general sports an APR of
16.67%. Yet many store cards charge
far more. The Best Buy credit card
has an APR of 26.24%; Walmart’s
card carries an interest rate of
23.9%; and cards offered by Old Navy
and the Gap (both owned by the
same company) charge 25.99%.
What’s more, instant approval for
store cards often translates into
lower credit limits—sometimes as
low as just a few hundred bucks.
This means even a moderate
purchase may put you near or at the
credit limit of that card. This is
important because the percentage of
the credit limit you use on each card
and across all your cards can be a
factor in your FICO score.
card sports an APR lower than that
of most store cards while offering
tons of rewards.
Assuming you shop regularly at
Amazon.com, the cash back value for
each $100 you spend there comes to
an estimated $5—a generous
redemption rate that rivals many
general-purpose rewards cards.
Amazon’s almost endless breadth of
merchandise adds to this card’s
value, as it’s far more versatile than a
department store or shoe-store card.
THE CATCH: You have to be an Amazon
Prime member, which means the effective annual fee is $99. But that fee
is generally in line with many other
cash back cards. Plus Prime membership comes with loads of other
benefits, such as free two-day shipping on eligible products and access
to streaming movies and TV shows
via Amazon Prime Video.
;MRRIV
STARWOOD PREFERRED GUEST CREDIT
CARD FROM AMERICAN EXPRESS
REWARDS
Five points per $1 spent at Starwood properties, such as Westin, Sheraton, and W Hotels
Double points for spending at Marriott Rewards hotels
30,000 bonus points for signing up if you
spend $3,000 within the first three months
ANNUAL FEE
$0 for the first year, then $95 annually
APR RANGE
16.24%–20.24%
MONEY’S REVIEW.
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;MRRIV
AMAZON PRIME REWARDS VISA
REWARDS
$70 Amazon gift card for new cardholders
5% cash back on Amazon.com purchases
2% cash back on purchases at restaurants,
gas stations, and drugstores
1% cash back on all other purchases
ANNUAL FEE
$0. But you must have an Amazon Prime
membership, which costs $99 a year.
APR RANGE
15.24%–23.24%
MONEY’S REVIEW.
WHY IT’S A WINNER: This Chase-issued
Hotel cards can be a great way to
rack up rewards when you hit the
road. But are they really worth it?
That depends on how much you
travel and if you shop for rooms
mainly by price or brand. If you are
loyal to a particular chain, hotel
cards can be a twofer: They offer the
best rewards for spending at their
affiliated properties as well as status
in the brand’s loyalty program.
Because of their rewards packages, though, don’t expect these
cards to come with zero annual fees.
Just make sure the card’s other
benefits and perks—for instance,
free in-room Wi-Fi or no fees on
transactions made abroad—are
worth the annual costs.
WHY IT’S A WINNER: This American
Express card is incredibly versatile.
The card offers a generous earnings
rate worth approximately $2.30 in
value per $100 spent. Points can be
redeemed for stays at Starwood’s 11
brands. Plus SPG members who link
their accounts to Marriott Rewards
(Marriott International bought
Starwood last year) can transfer
points between the two programs or
to a frequent-flier program.
Points can be redeemed for flights
on 150 airlines with no blackout
dates. Also, as a cardholder and an
SPG member, you’ll get free premium-speed Wi-Fi in your hotel room.
THE CATCH: After the first year, the
card levies an annual fee of $95, which
is higher than what some other hotel
cards charge. Plus, you really have to
be a frequent traveler to Starwood
properties to make this worth it.
OCTOBER 2017
M O N E Y. C O M
79
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Airline cards can help you supplement the frequentflier miles you earn when you fly. Choosing an airline
card is, to some degree, a simple exercise: The best
miles card for you is likely to be the one whose airline you
fly most frequently. Many airline cards charge annual
fees, and they come with similar APR ranges and mileage
redemption values. But you still want to examine the fees
and look at other criteria. Among the best perks: free
checked bags and access to airline lounges, which can
help offset the cost of the annual fees.
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spend $2,000 in first three months
3,000 bonus miles on the anniversary of opening your account
ANNUAL FEE
$69
APR RANGE
16.99%–23.99%
GOLD DELTA SKYMILES
FROM AMERICAN EXPRESS
REWARDS
$1.30 per $100 spent, according
to BoardingArea.com
50,000-mile sign-up bonus if you
spend $1,000 in first three months
$50 credit if you make a Delta
purchase in first three months
MONEY’s REVIEW. Earn
double points on Southwest tickets or car rentals
or hotels through Rapid
Rewards partners.
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ANNUAL FEE
$0 first year, then $95
APR RANGE
16.74%–25.74%
CITI AADVANTAGE
PLATINUM SELECT WORLD
ELITE MASTERCARD
REWARDS
$1.30 per $100 spent, according
to BoardingArea.com
30,000-mile sign-up bonus if you
spend $1,000 in first three months
ANNUAL FEE
$0 first year, then $95
MONEY’s REVIEW. Earn
double miles on AA flights
and get 25% off in-flight
purchases. With mileage
discounts, you can get a
free flight for as little as
7,500 miles. You also get a
free checked bag on U.S.
flights and priority boarding for up to four people.
M O N E Y. C O M
REWARDS
$1.40 per $100 spent, according
to BoardingArea.com
40,000-mile sign-up bonus if you
spend $2,000 in first three months
ANNUAL FEE
$95
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APR RANGE
16.99%–23.99%
APR RANGE
16.99%–24.99%
80
UNITED MILEAGEPLUS
EXPLORER
MONEY’s REVIEW. Earn
double miles on Delta purchases and get a free
checked bag and priority
boarding. Miles can be
used on Delta and more
than 15 partner airlines.
MONEY’s REVIEW. Earn
double miles on United
purchases, and get one
free checked bag and priority boarding for you and
a companion. If you spend
$25,000 in a year, you’ll
get 10,000 bonus miles,
great for business travelers on expense accounts.
OCTOBER 2017
ALASKA AIRLINES VISA
SIGNATURE
REWARDS
$1.80 per $100 spent, according
to BoardingArea.com
30,000-mile sign-up bonus if you
spend $1,000 in first three months
Buy one ticket, get one for just the
taxes and fees if you make $1,000
in purchases in first three months.
ANNUAL FEE
$75
APR RANGE
13.24%–20.24%
SOUTHWEST RAPID
REWARDS PLUS
REWARDS
$1.40 per $100 spent, according
to BoardingArea.com
60,000-mile sign-up bonus if you
MONEY’s REVIEW. Get
triple miles on Alaska and
Virgin America purchases,
and a free checked bag on
Alaska and Virgin America
flights for you and up to six
companions.
Picture those perfect days at the beach . But without your youth. Or your hair.
LIVE LIKE A 20 YEAR OLD.
INVEST LIKE A 50 YEAR OLD.
There was a time to live your youth. Now,
may be the time to invest for your retirement.
The Main Advantages of
Municipal Bonds
Investors are attracted to municipal
bonds for three reasons; safety of
principal, regular predictable income
and the tax-free benefits. Together,
these three elements can make a
compelling case for including tax-free
municipal bonds in your portfolio.
Potential Safety of Principal
When investing in municipal bonds,
investors are paid back the full face
value of their investment at maturity
or earlier if called, unless the bond
defaults. This is important because
many investors, particularly those
nearing retirement or in retirement,
are concerned about protecting their
principal. In May of 2016, Moody’s
published research that showed that
rated investment grade municipal bonds
had an average cumulative 10-year
default rate of just 0.09% between 1970
and 2015.* That means while there is
some risk of principal loss, investing in
rated investment-grade municipal bonds
can be an important part of your portfolio.
Potential Regular Predictable Income
Municipal bonds typically pay interest
every six months unless they get
called or default. That means that you
can count on a regular, predictable
income stream. Because most bonds
have call options, which means you
get your principal back before the
maturity date, subsequent municipal
bonds you purchase can earn more
or less interest than the called bond.
According to Moody’s 2016 research,*
default rates are historically low for
the rated investment-grade bonds
favored by Hennion & Walsh.
Potential Tax-Free Income
Income from municipal bonds is
not subject to federal income tax
and, depending on where you live,
may also be exempt from state and
local taxes. Tax-free can be a big
attraction for many investors in this
time of looming tax increases.
About Hennion & Walsh
Since 1990 Hennion & Walsh has
specialized in investment-grade
tax-free municipal bonds.The company
supervises over $3 billion in assets
in over 16,000 accounts, providing
individual investors with institutional
quality service and personal attention.
Our FREE Gift To You
We’re sure you’ll want to know more
about the benefits of tax-free Municipal
Bonds. So our specialists have written
a helpful Bond Guide for investors.
It’s free and comes with no obligation
whatsoever.
FREE Bond Guide
Without cost or obligation
Call (800) 316-1837
© 2017 Hennion and Walsh. Securities offered through Hennion & Walsh Inc. Member of FINRA, SIPC. Investing in bonds involves
risk including possible loss of principal. Income may be subject to state, local or federal alternative minimum tax. When interest
rates rise, bond prices fall, and when interest rates fall, bond prices rise. *Source: Moody’s Investor Service, May 31, 2016
“US Municipal Bond Defaults and Recoveries, 1970–2015. Past performance is not a guarantee of future results.
MONEY
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M O N E Y. C O M
OCTOBER 2017
If you’re not an athlete
or A student, you can
still win free tuition—
if you live in the right
hometown.
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ILLUSTRATIONS BY SHAW NIELSEN
HERE’S SOME SURPRISINGLY GOOD NEWS about college costs. It’s actually
getting easier to find free tuition in some places. New scholarships in
New York and Rhode Island bring the number of full-tuition programs
to at least 43, up from a handful a decade ago. And similar plans have
been proposed in places like Arizona and Baltimore.
These are a welcome addition to the traditional ways of going to
college for free. Colleges have long offered full-tuition scholarships to top
students and athletes. Students from families earning less than about
$40,000 a year typically get federal Pell Grants that can cover
community college tuition. The military academies charge no tuition
(and even pay their students). And more than 700,000 soldiers, veterans,
and members of military families get tuition assistance annually.
But the easiest way to get free tuition these days is to live in a
community that offers one of the new “promise” programs. Some fund
students who earn good grades, or who study in-demand majors, or
whose families buy homes in certain areas, for example. True, there
have been cutbacks in many of the older lottery-funded state
scholarships. Florida, Georgia, and New Mexico have slashed their
scholarships for good students. Yet other communities are making
different tuition promises, says Morley Winograd, president of the
Campaign for Free College Tuition.
The best programs are the simplest and broadest, says Michelle
Miller-Adams of the W.E. Upjohn Institute for Employment Research.
So here is MONEY’s list of the communities with near-universal
eligibility for scholarships and enough funding to cover at least an
associate’s degree. We included programs that prorate their benefits
based on the years students live in the community, and so pay full
tuition only for longtime residents.
If you don’t see your community on this list, ask a local college’s
financial aid office about specialized tuition offers, such as Arkansas’s
for students in high-demand majors or California’s many one-semester
community college tuition plans.
Two important notes: Most of these scholarships are “last-dollar”
awards, meaning they cover whatever is owed after federal and other
state grants are applied. So you’ll have to fill out a Free Application for
Federal Student Aid (FAFSA). And these programs cover only tuition
and mandatory fees. You’ll still need to pay for books and supplies
(typically about $1,400 a year), as well as living expenses and
transportation to and from campus.
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Pinal County: Promise for the Future
pays for Pinal County graduates to attend Central Arizona College. The program covers tuition and fees after federal and state aid is used. Students
need a 2.75 GPA in high school and must
complete 20 hours of community service, and then enroll in college the semester after graduating high school.
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Oakland: The Oakland Promise pays
tuition for low-income graduates of
Castlemont High School, Coliseum College Preparatory Academy, and Oakland
High School. Recipients need at least a
2.0 GPA and 90% attendance. They can
use the money at any accredited twoor four-year college. Award amounts
vary depending on the type of college,
but scholarships range from $1,000 to
$16,000 and average about $10,000.
Ontario: Students who have lived in
Ontario for at least two years before
high school graduation can receive fulltuition scholarships to any California
community college. To maintain eligibility, students need to maintain a 2.0 GPA
and complete community service hours.
San Francisco: The new Free City program will pay tuition (but not fees) for
residents to attend City College for two
years. Unlike many programs, San Francisco’s isn’t strictly tied to high school
enrollment. Recipients just need to have
lived in San Francisco for at least a year.
OCTOBER 2017
M O N E Y. C O M
WEST CONTINUED
Santa Barbara: The Santa
Barbara City College Promise
covers two years of costs, including mandatory fees, books,
and supplies, for students who
complete high school in the college’s district. Recipients must
enroll full-time in SBCC and be
in good academic standing.
Benton Harbor: High school
graduates from Benton Harbor
can get two years of tuition
and fees covered at any instate community college or
technical school.
Detroit: Residents are eligible
for free tuition and fees at local
two-year campuses, as well as at
a list of 17 four-year partner colleges. There are no GPA or test
requirements to use the scholarship for two-year programs. But
students must have a 3.0 GPA
and a 1060 SAT to receive one of
the four-year scholarships.
San Marcos: The Palomar
Promise awards two years of
free tuition at Palomar College
for graduates of the San Marcos
Unified School District. Recipients must earn a 2.5 GPA and
take placement tests in core
subjects. Additional aid is available for students who transfer
after two years into California
State University San Marcos.
Siskiyou and Modoc counties:
The Siskiyou Promise is a twoyear scholarship for graduates of
Siskiyou and Modoc county high
schools that covers all tuition
and mandatory enrollment fees.
Recipients must enroll in courses worth at least 12 credits and
earn a minimum 2.0 GPA to continue receiving the award, which
kicks in after federal aid.
36)+32
Statewide: The Oregon
Promise covers most tuition
costs for recent high school
graduates at community
colleges. The maximum for this
last-dollar program is set at
the average community college
tuition for 12 credits per semester ($3,540 in 2017–18).
Recipients need a 2.5 GPA to
qualify and can get funding for
six to 12 credits per semester.
The program started without
an income cutoff, but facing
budget pressures, lawmakers
this year limited eligibility
to those with expected family
contributions of up to $18,000,
which generally works out to
an income of about $100,000
for a family of four.
M O N E Y. C O M
8,)
1-(;)78
-00-23-7
Galesburg: The Galesburg Promise covers tuition after other
financial aid for up to 16 credits per semester for two years at
Carl Sandburg College. Recipients must maintain a 2.0 GPA and
pass at least two-thirds of their classes.
/ %27%7
McPherson and Saline counties: The Bethany Good Life Scholarship will pay tuition for graduates of McPherson or Saline county
high schools who are attending Bethany College starting in fall
2017. The scholarship doesn’t carry many requirements beyond
getting accepted and living on campus. This is the first year the
program will be in effect, and funding is available for five years.
1-',-+%2
Baldwin: The Baldwin Promise pays up to $5,000 annually for
four years, based on what is owed for tuition and fees after federal and state grants are applied. Recipients must have attended
high school in Baldwin since ninth grade. The money can be used
at any public or private college in the state.
Battle Creek: Students who graduate from one of the city’s two
public high schools can take up to 62 credits’ worth of courses at
Kellogg Community College—enough to earn an associate’s degree. The amount of the award is based on a student’s length of
residence in the city.
OCTOBER 2017
Grand Rapids: Students who
attend one of two qualifying middle schools and then graduate
from the city’s Union High
School can qualify for the Grand
Rapids Challenge Scholars program. Recipients have to sign up
as middle schoolers, maintain
good academic standing, and attend Scholars events to qualify.
They’ll receive aid that covers
whatever tuition and fees bills
remain after other financial aid
at any in-state public college.
Kalamazoo: The Kalamazoo
Promise covers between 65%
and 100% of tuition and fees
based on a student’s length of
enrollment in Kalamazoo public
schools. The money can be used
at any public college in Michigan,
as well as at a list of Michigan
private colleges. Unlike most
other free-tuition programs, Kalamazoo is a first-dollar award,
meaning recipients can use federal grants and other scholarships to pay for other costs, such
as room and board. Recipients
have access to the aid for a comparatively long 10-year window.
Lansing: The Lansing Promise
is a last-dollar program that covers tuition and fees for up to 60
credits at Lansing Community
ALL THE PLACES YOU CAN GO TO COLLEGE FOR FREE
College, or the equivalent dollar
value at Michigan State University or Olivet College.
Pontiac: Pontiac-area high
school graduates can receive up
to 65 credits’ or three years’
worth of tuition and fees at Oakland Community College. The
program kicks in after other
forms of financial aid; it also will
cover the equivalent of an associate’s degree at any public
Michigan college.
Saginaw: Students in the Saginaw Promise zone can receive
last-dollar support to cover tuition and fees at any two-year
program in the state—or $8,000
if they attend a four-year college.
3/0 %,31%
Statewide: Oklahoma’s Promise pays tuition at any Oklahoma
public university for up to five years. It will also cover a portion of
tuition at in-state private colleges. To be eligible, students must apply during the eighth, ninth, or 10th grade. Their family’s annual income must be under $50,000 at the time of application and cannot exceed $100,000 by the time the student goes to college.
Tulsa County: Tulsa Achieves covers the amount owed for tuition
and fees for three years or 63 credits at Tulsa Community College.
Recipients must be from Tulsa County high schools, enroll right after high school, and earn a 2.0 GPA.
;-7'327-2
Kenosha, Racine, and Walworth counties: The Gateway Technical Promise will cover tuition costs after federal and state grants
have kicked in for any of about 50 associate’s degree programs,
as well as certain diploma programs in technical fields such as
welding. Recipients must have earned a minimum 2.0 GPA in high
school, enroll full-time, and meet income cutoffs.
Mississippi County: The Great
River Promise covers Arkansas
Northwestern College tuition and
fees left over after federal and
state grant aid. The program is
for graduates of Mississippi
County public high schools and
covers four semesters for students enrolled full-time. Recipients must have lived in the
county for four years and have a
95% attendance rate.
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Minneapolis/St. Paul: The
Power of You scholarship covers
tuition and fees at two community colleges in the metro area.
Recipients must have a family income below $75,000, graduate
from a list of approved high
schools, and meet other requirements, including taking placement tests and filing a FAFSA.
Tangelo Park: Though it covers
one of the smallest geographic
areas on this list, the Tangelo
Park program is also the oldest.
Since 1994, the Rosen Foundation Scholarship has filled in financial gaps to cover the full
cost of attendance at Florida
public colleges for students who
have lived in the Tangelo Park
community (outside Orlando) for
at least two years, attended an
eligible high school, and applied
for financial aid.
1-77396Statewide: The A+ Scholarship
covers community and technical
college tuition and fees (after
other financial aid is applied) for
graduates of more than 500 high
schools. Recipients need a
2.5 GPA and 95% attendance
rate and are required to receive
50 hours of tutoring or mentoring. The maximum amount is set
based on the standard per-credit
charge at the State Technical
College of Missouri.
2368,(%/38%
Williams County: Graduates
of Williams County high schools
are eligible for a last-dollar
scholarship to cover tuition and
fees at Williston State College
for four consecutive semesters.
Recipients must enroll full-time.
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Hopkinsville: Hopkinsville high
schoolers can attend Hopkinsville Community College tuitionfree, thanks to the local Rotary
Club. Students need a 2.5 GPA
and 95% attendance rate.
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El Dorado: The El Dorado Promise is a comparatively generous
program. Graduates of El Dorado High School can get money to
pay tuition at any accredited college in the country. Public colleges
in Arkansas are fully covered. For private or out-of-state colleges,
students can get an amount equal to the highest in-state Arkansas
charge. The program, funded by Murphy Oil Co., is one of only two
first-dollar scholarships in the country, meaning it pays tuition bills
before other scholarships and grants are counted.
McCracken County: High
school graduates from the city
of Paducah and McCracken
County are eligible for up to 60
credits tuition-free at West
Kentucky Community and Technical College. To receive the
money, students must commit
to the program as ninth-graders
and maintain a 2.5 GPA and
95% attendance rate during
high school.
OCTOBER 2017
M O N E Y. C O M
ALL THE PLACES YOU CAN GO TO COLLEGE FOR FREE
Buffalo: Graduates of Buffalo’s public schools—of any income level—can receive tuition
(after state, federal, and institutional aid) at the state’s public colleges from Say Yes Buffalo. Students from families
earning less than $75,000 may
receive scholarships to partner
private colleges ranging from
tuition-only to full cost of
attendance.
SOUTH CONTINUED
2368,'%630-2%
Cleveland County: The Cleveland County Promise pays for
any accredited two- or four-year
college in the country. The dollar
amount is based on tuition and
fees at the most expensive
North Carolina public college
and is applied after federal financial aid but before university
or private scholarships. Recipients must complete a personal
finance course, maintain good
attendance, and enroll full-time.
Guilford County: Students
who have lived in Guilford’s
school district since ninth grade
and have family incomes under
$40,000 get tuition and fees
covered by the Say Yes Guilford
program. The scholarship can
be used at in-state two- and
four-year colleges and at a list
of private college partners.
8)22)77))
Statewide: The Tennessee
Promise scholarship pays tuition
and mandatory fees not covered
by other financial aid. Recipients
have to complete eight hours of
community service each semester, maintain a 2.0 GPA, and receive mentoring. This year a
similar program, called Tennessee Reconnect, was launched for
adult students.
:-6+-2-%
Bland and Wythe counties:
The Wythe-Bland Foundation
Scholarship Program covers tuition and fees at Wytheville
Community College. Recipients
must graduate from schools in
Wythe or Bland counties.
; 6- 8)9 7
,S[WLSYPH[IQEOI
GSPPIKIQSVIEJJSVHEFPI#
7IRH]SYVMHIEWXS
PIXXIVW$QSRI]QEMPGSQ
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Statewide: High school graduates use this state’s Student Excellence Equals Degree (SEED) program to pay for two years of
tuition at Delaware Technical Community College or the University of Delaware’s associate degree program. The SEED Scholarship requires a 2.5 GPA.
1%6=0 %2(
Garrett County: High school graduates from Garrett County
are eligible for the full cost of tuition at two-year Garrett College.
Recipients must have lived in the county for at least two years
and have to enroll as full-time students.
1%77%',97) 8 87
Boston: Residents attending Bunker Hill, MassBay, or Roxbury
community colleges can get tuition and fees covered after federal
grants are applied. To participate, students must qualify for a Pell
Grant—a federal grant reserved for low-income students—and
earn at least a 2.0 GPA during high school.
2) ;=36/
Statewide: New York’s new Excelsior Scholarship covers tuition
and fees of up to $5,500 a year at all two- and four-year public instate colleges. The scholarship kicks in after other federal and
state financial aid. Students from families earning less than
$100,000 qualify this year. (The cap will be raised to $125,000 in
2019.) The first statewide free-tuition program for four-year colleges comes with a catch: After leaving school, recipients must
live and work in New York for the amount of time they receive the
scholarship, or the money will be converted into a loan.
Syracuse: Say Yes Syracuse is
a last-dollar scholarship that
covers tuition and fees for eligible Syracuse City School District graduates. It fills in all the
tuition gaps at State University
of New York and City University
of New York campuses. At selected private college partners,
the scholarships cover tuition
gaps for students with family incomes of less than $75,000. It is
capped at $5,000 for higherearning families.
4)227=0:%2-%
Philadelphia: Philadelphia’s
low-income high school graduates can enroll at the Community College of Philadelphia
tuition-free. Recipients must be
eligible for a federal Pell Grant,
enroll full-time, and maintain a
2.5 GPA.
Pittsburgh: Graduates of Pittsburgh public schools who have a
2.5 GPA and 95% attendance
rate can get tuition at any twoor four-year college in Pennsylvania. Recipients must have attended Pittsburgh schools since
kindergarten to receive full funding, which is $7,500 per year and
$30,000 total.
6,3()-70 %2(
Statewide: Rhode Island’s
program pays for two years of
tuition and fees at the state’s
community college system.
There’s no income cutoff, but
students must have a 2.5 GPA,
enroll full-time, and earn 30
credits per year.
SOURCES: List compiled from information from the W.E. Upjohn Institute, the Campaign for Free College Tuition, and the College Promise Campaign. MONEY included programs with income
cutoffs and eligibility requirements such as community service hours, but excluded programs with GPA cutoffs above 2.75 or minimum standardized test scores.
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THE NUMBERS
783'/7
*92(7
&-++)781989%0*92(7&='%8)+36=
CATEGORY
&PYI'LMTW+EMR
%HZERXEKI
AT THE END
of bull markets, investors view large stocks
as safer bets in rocky times. That’s where the market
may be now, with the blue-chip filled Dow Jones
industrial average up 1.4% in the month ended Aug. 23,
while the Russell 2000 index of small stocks fell 4.5%.
7
46%8-37
2.3%
2.1
ONEYEAR
RANGE
2.03
ONEYEAR
RANGE
20.1%
16.4
18.9
10.8
13.6
11.0%
10.0
8.0
7.7
8.5
0.68
0.66
0.52
0.60
0.58
10.6
12.7
12.0
11.1
11.6
7.6
6.4
6.6
8.0
7.1
0.06
0.88
0.08
0.07
0.18
9.7
12.1
9.7
11.5
14.2
6.5
6.7
6.9
6.6
8.1
0.06
0.07
0.07
0.34
0.92
9.8
10.2
8.0
10.4
10.6
7.2
6.6
6.5
6.0
6.8
0.60
0.55
0.07
0.32
0.56
16.1
30.0
11.4
17.9
26.1
2.7
6.5
1.4
5.4
7.8
0.18
1.00
0.79
0.85
0.33
16.8
18.2
22.9
23.3
21.6
3.4
1.4
5.7
5.1
1.9
1.08
0.14
1.26
1.01
0.31
–0.7
0.4
–1.0
–0.1
–0.6
2.0
1.8
1.5
1.3
2.1
0.45
0.65
0.88
0.80
0.75
–0.2
0.0
2.4
1.4
0.3
2.5
2.6
3.1
2.1
2.4
0.09
0.05
0.43
0.10
0.54
Vanguard High-Yield Corporate (VWEAX)
7.1
American Funds American High-Income Trust (AHITX) 8.1
Fidelity Capital & Income (FAGIX)
10.0
Fidelity High Income (SPHIX)
8.8
Northern High Yield Fixed Income (NHFIX)
8.1
4.8
2.9
5.2
4.2
3.0
0.13
0.72
0.73
0.72
0.81
3.1
1.4
0.3
0.8
0.2
0.09
0.09
0.15
0.09
0.41
MIDCAP
Vanguard Mid-Cap Index (VIMAX)
Fidelity Low-Priced Stock (FLPSX)
Vanguard Extended Market Index (VEXAX)
Vanguard Mid-Cap Value Index Fund (VMVAX)
Vanguard Strategic Equity Fund (VSEQX)
SMALL-CAP
Vanguard Small-Cap Index (VSMAX)
Fidelity Extended Market Index Fund (FSEVX)
Vanguard Small-Cap Value Index Fund (VSIAX)
Vanguard Explorer (VEXRX)
T. Rowe Price Small-Cap Value (PRSVX)
20.0
American Funds New World (NEWFX)
Vanguard Emerging Markets Stock Index (VEMAX)
T. Rowe Price Emerging Markets Stock (PRMSX)
Fidelity Emerging Markets (FEMKX)
Northern Emerging Markets Equity Index Fund (NOEMX)
1.9
U.S. GOVERNMENT BONDS
&)2',1%6/7
TOTAL RETURN
O E
ONE
MONTH
MO H
INDEX
S&P 500
Nasdaq2
Russell 2000
Morgan Stanley EAFE
Dow Jones industrial average
Barclays U.S. aggregate bond index
ONE
YEAR
–
–1.0%
–1.77
– 5
–4.5
––0.11
1.4
4
0
0.4
14.1%
19.4
11.2
15.3
20.5
0.2
5.11
3.22
3
0
0.2
0
0.2
– 2
–0.2
–1
–1.6
–2 1
–2.1
– 8
–2.8
– 8
–2.8
–3
6
–3.6
–3.8
13.5
3.9
28.1
29.1
12.5
15.0
10.2
7.4
–8.4
THREE
YEARS1
9.4%
11.4
7.2
2.9
11.4
2.7
SECTOR
Telecom services
Utilities
Consumer staples
Information technology
Financials
Basic materials
Industrials
Consumer discretionary
Health care
Energy
5.2
13.0
10.1
16.1
11.8
4.7
9.7
10.7
9.5
–10.6
NOTES AND SOURCES: Stock index data as of August 23 from Lipper, New York; 877-955-4773.
Sector returns from Bloomberg. Bond index data from Barclays. Monthly S&P 500 ratios are
from Standard & Poor’s. P/E ratios are based on previous four quarters of operating earnings.
Biggest funds ranked by total net assets. 1Annualized. 2Price change only.
M O N E Y. C O M
Vanguard Total International Stock Index (VGTSX)
Oakmark International Fund (OAKIX)
Harbor International (HAINX)
American Funds EuroPacific Growth (AEPGX)
Vanguard International Growth Fund (VWILX)
EMERGING MARKETS
2.0
CURRENT
Fidelity Contrafund (FCNTX)
American Funds Growth Fund of America (AGTHX)
Dodge & Cox Stock (DODGX)
American Funds Investment Co. of America (AIVSX)
American Funds Wash. Mutual Investors (AWSHX)
INTERNATIONAL
2.2
22.0
21.0
EXPENSES
(AS % OF
ASSETS)
LARGE-CAP STOCKS
American Funds American Balanced (ABALX)
Fidelity Balanced (FBALX)
Vanguard Balanced Index Fund (VBIAX)
Vanguard STAR Fund (VGSTX)
Fidelity Puritan Fund (FPURX)
DIVIDEND YIELD
23.0%
21.0
THREE
YEARS1
BALANCED
P/E
CURRENT
TOTAL RETURN
ONE
YEAR
OCTOBER 2017
Fidelity Government Income (FGOVX)
American Funds U.S. Government Securities (AMUSX)
MFS Government Securities (MFGSX)
Sit U.S. Government Securities (SNGVX)
JPMorgan Government Bond (OGGAX)
INVESTMENT-GRADE
Vanguard Total Bond Market II Index (VTBIX)
Vanguard Total Bond Market Index (VBTLX)
Dodge & Cox Income (DODIX)
Vanguard Short-Term Investment-Grade (VFSUX)
T. Rowe Price New Income (PRCIX)
HIGH YIELD
TAX-EXEMPT
Vanguard Intermediate-Term Tax-Exempt (VWIUX)
Vanguard Limited-Term Tax-Exempt (VMLUX)
Vanguard Tax-Exempt Money Market (VMSXX)
Vanguard Short-Term Tax-Exempt Fund (VWSUX)
Fidelity Municipal Money Market (FTEXX)
0.7
0.9
0.6
0.9
0.4
THE NUMBERS
MONEY 50
7XSGOW,MXE
7QEPP+PMXGL
TOTAL RETURN
FUND (TICKER)
Vanguard Inflation-Protected (VIPSX)
Vanguard Short-Term Infl.-Prot. (VTIP)
Vanguard Total Intl. Bond Index (VTIBX)
took it on the chin in the four
weeks ended Aug. 23, as investors started to lose faith
in the “Trump Bump.” Small stocks surged when
Donald Trump was elected last November. Investors
assumed the new President would reignite U.S.
economic growth by cutting corporate tax rates, a
move that would benefit smaller firms in particular.
Unlike large multinationals, which may realize half or
more of their sales abroad, smaller companies’ fates
are more closely tied to economic conditions at home.
Seven months into the new administration,
however, the President’s relationship with Congress
has descended into bickering, and those hopes are
fading. In our recommended list of mutual and
exchange-traded funds, the biggest loser was iShares
Core S&P Small Cap, which fell 5.2%. —IAN SALISBURY
,3;8397)3966)'311)2()(0-78
Building-block funds: For broad exposure to core asset classes
Custom funds: Specialized investments that can tilt your strategy
One-decision funds: If you want stocks and bonds in one portfolio
TOTAL RETURN
FUND (TICKER)
EXPENSES
(AS % OF
ASSETS)
PHONE
NUMBER
(800)
––1.0% 14.0% 9.3%
––1.3
3
13.7
8.8
0.03
0.03
435-4000
435-4000
––3.9
9
–5
–5.2
10.0
10.2
7.7
8.7
0.07
0.07
474-2737
474-2737
0.0
0
0
0.22
0.1
0
22.3
3
15.5
16.1
14.9
17.9
2.9
2.7
3.5
1.2
0.19
0.18
0.27
0.32
544-8544
662-7447
662-7447
662-7447
–0.1
– 1
–1.9
7.2
0.26
662-7447
0
0.4
4
0
0.3
3
–0.1
0.6
2.5
1.4
0.15
0.15
662-7447
662-7447
ONE
YEAR
THREE
YEARS 1
BUILDING-BLOCK FUNDS
Large-Cap
Schwab S&P 500 Index (SWPPX)
Schwab Total Stock Market Index (SWTSX)
Midcap/Small-Cap
iShares Core S&P Mid-Cap (IJH)
iShares Core S&P Small Cap (IJR)
Foreign
Fidelity Spartan International (FSIIX)
Vanguard Total Intl. Stock (VGTSX)
Vanguard FTSEA/W ex-U.S. Small (VFSVX)
Vanguard Emerging Markets (VEIEX)
Specialty
Vanguard REIT Index Investor (VGSIX)
Bond
Vanguard Total Bond Market (VBMFX)
Vanguard Short-Term Bond (VBISX)
ONE
YEAR
THREE
YEARS 1
EXPENSES
(AS % OF
ASSETS)
PHONE
NUMBER
(800)
0.20
0.07
0.15
662-7447
662-7447
662-7447
0.8% –0.3% 0.8%
0.3
0.8
0.3
0.6
–0.8
3.4
CUSTOM FUNDS
SMALL-COMPANY STOCKS
ONE
O
MONTH
MO
H
ONE
O
E
MONTH
O H
Large-Cap
Dodge & Cox Stock (DODGX)
PowerShares FTSE RAFI U.S. 1000 (PRF)
Sound Shore (SSHFX)
PowerShares S&P High Qual. Port.(SPHQ)
Primecap Odyssey Growth (POGRX)
T. Rowe Price Blue Chip Growth (TRBCX)
Midcap
Vanguard Mid-CapValue Index ETF(VOE)
WisdomTree MidCap Dividend (DON)
T. Rowe Price Div. Mid Cap Gro. (PRDMX)
Small-Cap
PowerShares FTSE RAFI U.S.1500 S-M(PRFZ)
Vanguard Small-Cap Value (VBR)
WisdomTree SmallCap Dividend (DES)
T. Rowe Price QM U.S. Small-Cap Gr.(PRDSX)
Specialty
PowerShares Intl. Div.Achievers (PID)
SPDR S&P Dividend (SDY)
Cohen & Steers Realty Shares (CSRSX)
SPDR Dow Jones Intl. Real Estate (RWX)
iShares N.American Nat. Resources (IGE)
Foreign
Oakmark International (OAKIX)
Vanguard International Growth (VWIGX)
T. Rowe Price Emerging Markets (PRMSX)
Bond
Dodge & Cox Income (DODIX)
Fidelity Total Bond (FTBFX)
Vanguard Short-Term Inv. Grade (VFSTX)
iShares iBoxx $ Inv. Grade Corp.(LQD)
Loomis Sayles Bond (LSBRX)
Fidelity High Income (SPHIX)
Vanguard Intm.-Term Tax-Ex. (VWITX)
Vanguard Limited-Term Tax-Ex. (VMLTX)
Templeton Global Bond (TPINX)3
Fidelity New Markets Income (FNMIX)
–2.0
–1.2
–2.5
–1.3
–3.9
–0.6
18.9
11.7
13.2
10.8
16.8
24.5
8.0
7.2
6.0
10.9
10.7
12.7
0.52
0.39
0.91
0.29
0.66
0.72
621-3979
843-2639
551-1980
983-0903
729-2307
638-5660
–2.2
–2.9
–2.1
11.1
7.0
11.9
8.0
8.5
9.0
0.07
0.38
0.87
662-7447
909-94732
638-5660
–4.0
–3.8
–4.9
–3.4
10.6
9.7
5.7
12.3
6.5
6.9
7.2
8.9
0.39
0.07
0.38
0.81
843-2639
662-7447
909-94732
638-5660
–0.4
–1.5
0.6
–0.1
–3.2
10.5
6.3
–0.4
–1.4
–8.2
–3.3
10.2
8.2
0.1
–11.8
0.58
0.35
0.96
0.59
0.48
983-0903
787-22572
437-9912
787-22572
474-2737
0.7
2.7
3.1
30.0
26.0
22.9
6.5
7.7
5.7
1.00
0.46
1.26
625-6275
662-7447
638-5660
0.3
0.4
0.3
–0.1
–0.4
–0.4
0.6
0.4
–0.8
0.7
2.4
1.7
1.3
0.9
5.3
8.8
0.6
0.8
11.1
6.9
3.1
3.3
2.0
3.7
1.6
4.2
3.0
1.3
0.7
5.7
0.43
0.45
0.20
0.15
0.91
0.72
0.19
0.19
0.93
0.86
621-3979
544-8544
662-7447
474-2737
633-3330
544-8544
662-7447
662-7447
632-2301
544-8544
0.55
1.02
0.25
544-8544
544-8544
662-7447
0.60
0.66
638-5660
638-5660
0.14
0.15
662-7447
662-7447
ONE-DECISION FUNDS
Balanced
Fidelity Balanced (FBALX)
–0.6
10.2
6.6
Fidelity Global Balanced (FGBLX)
0.3
6.6
3.1
Vanguard Wellington (VWELX)
–0.4
9.8
6.8
Target Date
T. Row
Rowee Pric
Pricee Reti
Retirem
rement
ent se
serie
riess (STO
(STOCK/
CK/BON
BOND
D ALLOC
ALLOCATI
ATION
ON
N)
Example: 2005 Fund (45%/55%)(TRRFX) –0.1
6.0
4.0
Example: 2020 Fund (68%/32%)(TRRBX) –0.3
9.8
5.5
Vanguard Target Retirement series
Example: 2025 Fund (70%/30%) (VTTVX) –0.3
9.3
5.5
Example: 2035 Fund (84%/16%) (VTTHX) –0.5
11.5
6.0
NOTES: As of Aug. 23, 2017. Load funds are included for those who prefer
to use a broker. 1Annualized. 2Phone numbers are 866. 34.25% sales load.
SOURCES: Lipper, New York, 877-955-4773; the fund companies
OCTOBER 2017
M O N E Y. C O M
MY MONEY STORY
The author as a
young girl with her
father, Yuri.
%1EXGL1EHIMR*PSVMHE
BY M A R I A S H A R A P OVA
WE ARRIVED
garage sales, and all those things.
Getting a tennis skirt was a huge deal. When
you’re training at an academy, a tennis skirt is
like a schoolbook—it’s a necessity. It was a special
gift and a special thing. In Russia, it felt like
everyone in tennis clothes was wearing pieces
of cloth stitched together. But then I came to
America, and I’d go to a mall, and there’d be
all these brands and variety. Whoa.
The lesson my father taught me was that hard
work ultimately gets you rewards. When we
think about rewards, they can be achievements,
they can be financial, or they can be personal.
I’ve been very fortunate in the things that I
have been a part of where I earned money—that
I did something for it. I did it physically, I did it
mentally, I was there, and I contributed to that
payment. It’s so much more rewarding that way,
and that was something my father taught me
from a very young age. —As told to Mike Ayers
Maria Sharapova is a five-time tennis Grand Slam champion. Her memoir, Unstoppable, is out now.
M O N E Y. C O M
OCTOBER 2017
Do you have a story about money you’d like to share?
Write to us at letters@moneymail.com.
C O U R T E S Y O F M A R I A S H A R A P O VA
at the Miami airport in the middle of
the night. Someone was supposed to pick us up,
but didn’t. My father had no idea how to get in
touch with them, he didn’t speak the language,
and he didn’t know anyone in Miami. We had only
about $700 in our pockets.
I was 7 years old then, and I didn’t know
anything about money. The life my parents had
in Russia was normal—we had a little apartment,
and we’d take public transportation. We had
breakfast, lunch, and dinner. By no means did we
feel that we were struggling. But when we landed
in Miami with just a tennis dream, $700 dollars
was clearly not enough.
There weren’t a whole lot of gifts. I’d get a
chocolate bar at the end of practice, or at the
end of a good week. My father made sure that
everything we bought was a necessity vs.
something that was used for a day and then
thrown away. We also relied on hand-me-downs,
A new way to plan for tomorrow, today.
Managed portfolios from TD Ameritrade Investment Management.
TD Ameritrade offers a variety of portfolios that can help you meet your goals now and as
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