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Cost of Living Index

Cost of Living Index

Changing Prices: Cost of Living Index


A cost of living index is a hypothetical price index that compares and measures the relative cost of living in regions or different times. The useful purpose of a cost of living index is its ability to measure the differences in the price of services and goods. It also allows for other items being substituted as prices vary.
There are a variety of methods that have been created in order to approximate a cost of living index, which includes different methods that allow substitution between items as relative prices change.
A cost of living index can affect many different things, including pension benefits, employee contracts, and government entitlements like Social Security. Often, the cost of living can cause adjustments to salaries annually based on geographic location.
Sometimes there are also yearly escalation clauses found in employment contracts can include future or retroactive percentage increases in salary which is not based on a cost of living index. These negotiated increases in salary are informally called cost of living increases or cost of living adjustments due to their similarity to other increases related to externally-determined indexes.
In the United States, there is the Consumer Price Index, which is derived from the idea of the cost of living index. The difference between the two is that the cost of living index measures changes in amounts that consumers spend over time on things such as clothing or food, but having a complete cost of living index could go further beyond this aspect and also describe changes such as environmental or governmental factors that have an effect on the well-being of a consumer.
The Consumer Price Index is a statistical estimate made based off the prices of a section or sample of a given item whose costs are periodically collected. Further divisions of sub-indexes and sub-sub-indexes are then generated for different categories as well as sub-categories of services and goods, being grouped to create the overall Consumer Price Index with weight adjustments reflecting their portion in the total of the expenditures by consumers.
It is one of many price cost of living indexes created by various national statistical agencies. The yearly change in percentage in the Consumer Price Index is used as an indication of inflation. It can be used to adjust for the effect of inflation in the actual value of salaries, pensions, wages, monetary magnitudes and price regulation in order to see changes in the actual values.
In most countries, the Consumer Price Index, as well as the USA National Income & Product Accounts and the population census, is one of the most carefully observed national economic statistics.

SEC Seeking to Halt Scheme that Raises Investor Funds under the Guise of the JOBS Act

SEC Seeking to Halt Scheme that Raises Investor Funds under the Guise of the JOBS Act

 

The United States Securities and Exchange Commission announced fraud charges against a Washington State-based company and its owner for defrauding investors with claims to raise billions of investment capital under the JOBS Act and invest it exclusively with domestic companies.

The SEC alleged that Daniel Peterson and his business USA Real Estate Fund 1 guaranteed investors that they could procure considerable returns from an upcoming offering in a product backed by prominent financial companies. Peterson told investors that the 2012 JOBS Act would allow him to raise billions by advertising the offering to the American public, and produce significant profits for early investors. Mr. Peterson took advantage of his investors’ sense of patriotism by promising to invest the funds of the offering in exclusively American companies, and help assist the state of Washington in their economic recovery.

The SEC alleges that Peterson utilized investor money for personal expenses, and is continuing to solicit investors in his scheme.

“We have brought these charges to stop Peterson’s illegal activity before his fraudulent plan picks up more momentum,” said Michael Dicke, the Associate Director in the SEC’s San Francisco Office. “The American JOBS Act is intended to aid small businesses with their capital raising efforts, not to legalize fraud or provide unscrupulous entrepreneurs with the right to make fraudulent claims to dupe investors.”

According to the complaint filed in a Washington federal court, Peterson sold common stock in his fund from November 2010 to June of 2012 to more than 20 investors in Washington and five other states. Through e-newsletters and e-mails, Peterson claimed that he was preparing to raise billions in a subsequent offering of “preferred” securities, which he claimed would yield 10-year returns of up to 1,300 percent. Peterson then claimed that two prominent financial firms had partnered with him to bring this offering to the marketplace and that the firms had conducted proper due diligence on his fund and were in the process of structuring pricing models and sales agreements.

All of Peterson’s claims were false; he never created an investment product, the stated returns were made up, and he has never had any affiliation with any Wall Street firm to underwrite his purported offering.

The SEC claims that Peterson used investor funds to pay his rent, entertainment, food, vacations and luxury vehicles. Peterson also is alleged of using investor funds on clothing, luggage, and expenses at a Las Vegas casino. 

Broke Doctors: Wait, What?

Broke Doctors: Wait, What?

 

 
As a considerable number of doctors struggle to keep their practices afloat, some are buckling under finance woes and pushed into bankruptcy. 
 
A bankruptcy filing among those in the medical field is a trend that has accelerated in recent years industry experts say, with potentially crippling consequences for patients and doctors. Some doctors are still able to keep their practices open post bankruptcy, but for others, the filing represents a career-ending event. 
 
Chapter 11 bankruptcy filings by medical professionals have spiked recently as noted by Bobby Guy, the co-chair of the American Bankruptcy Institute’s health care committee, who is responsible for tacking bankruptcy trends tied to distressed companies. Guy claims there were at least eight filings in the past couple of weeks, which he remarked as “highly unusual.”
 
Just five years ago, Florida-based bankruptcy attorney David Langley did not have a single medical professional as a client; however, since then he has handled at least six bankruptcy filings involving doctors. Two current clients—an OB/GYN and an orthopedic surgeon—also are in the midst of filing for bankruptcy. 
 
None of Mr. Langley’s clients were facing malpractice suits that forced them into dire financial situations; in fact, all regarded as top-notch doctors.
 
The struggling economy has taken a toll on doctors’ revenue as consumers cut back on elective procedures and office visits. Doctors also point to the shrinking insurance reimbursements, the rising costs of malpractice insurance and fluctuating regulations as impediments to maintain a steady practice. 
 
Primary care professionals are also facing similar challenges. Langley remembers one client, a solo doctor whose patients lacked insurance and were mostly on Medicare. As the economy weakened in the wake of the recession, fewer of this doctor’s patients could afford to make visits. As a result, cash payments and reimbursements plummeted. To come up with cash to keep the practice afloat, the doctor was forced to take a second job at a local hospital. The extra income; however did little as the doctor’s debt ballooned. 
 
Two years ago, state tax officials showed up at the doctor’s office to shut the clinic down. The doctor called Langley and was able to file an emergency bankruptcy suit online while the officials were pacing in the waiting room. The doctor gave the officials the bankruptcy case number, and they exited without closing the clinic. 
 
A similar medical professional was on the brink of bankruptcy in 2011; by 2010, she lost almost half of her patients causing her annual revenue to drop nearly 30 percent. This doctor hired Guy and was fortunate enough to restructure her debt and keep her business going. 
 
Every day since the filing has been a struggle, however. “Every time payroll comes around, I wonder if we will be able to keep this up,” she said. “I try not to think too much about it because it paralyzes me with fear.”
 
Source: CNN
 

Crash and Burn: Microsoft Fined $730 million by European Union

Crash and Burn: Microsoft Fined $730 million by European Union

 

European regulators have fined computer giant Microsoft roughly $730 million for failing to uphold an agreement to offer users with a choice of Internet browsers. 
 
The European Union warned the software empire last October that it faced a steep fine following the results of an antitrust investigation launched in July. The investigation revealed that Microsoft had breached a five-year agreement to provide European customers with a choice regarding which browser they could use. 
 
“Legally binding contracts reached in antitrust decisions play a prominent role in enforcement policies because they allow for rapid solutions to competition matters,” said an antitrust official with the European Union. “A failure to comply is a serious infringement that must be sanctioned properly.”
 
This is the first fine imposed by the Commission for a breach of a contract or commitment made in the context of an investigation. 
 
Microsoft shares dropped 1% in pre-market trading as NASDAQ futures rose slightly. The steep fine could have been significantly larger as the European Union has the authority to impose fines of up to 10% of a company’s annual revenue, or approximately $7 billion in Microsoft’s case. 
 
According to the commitment, which dates back to 2009, PC users setting up Microsoft’s Windows operating system were supposed to see a “choice screen” offering 11 different browsers, including Microsoft’s Internet Explorer. The prompt; however, was removed following an upgrade to the Windows 7 operating system in February of 2011, depriving 15 million European Internet users a choice of browser. 
Following the announcement of a sanction, Microsoft apologized for what it labeled as a “technical error,” which lasted over a year. Microsoft announced that it had fixed the problem as soon it was made aware of the mistake. 
 
“We provided the commission with a candid and comprehensive assessment of the situation, and we have taken steps to improve our software development to avoid this mistake in the future,” Microsoft said in a statement issued Wednesday. 
 
Microsoft is no stranger to these sanctions; the software giant faced similar suits in the United States in the 90’s and 2000’s over its tactic of using its prominent position with Windows to promote its browser over competitors. 
 
Microsoft’s share of the browser market has plummeted as alternatives such as Mozilla’s Firefox and Google’s Chrome have grown in popularity.  
 
 
Source: CNN
 

The Future is not looking so Bright: Class of 2013 Faces Grim Job Prospects

The Future is not looking so Bright: Class of 2013 Faces Grim Job Prospects

 

 
College graduates under the age of 25 faces an 8.8 percent unemployment rate and of those lucky enough to secure employment, more than 50 percent work in positions that do not require a bachelor’s degree.
 
The upcoming class of 2013 will face an extremely grim job market, according to a new research report. 
 
Unemployment remains severe for young college graduates, and for those who will find employment, many will be forced to settle for low-level opportunities, the Economic Policy Institute reported today. 
 
The unemployment rate for recent college graduates between the ages of 21 to 24 has averaged roughly 9 percent over the last year, according to statistics from the United States Department of Labor, and when you include young college graduates who work part-time for economic means and those young individuals who have stopped looking for work in the past year, the unemployment rate sky rockets to nearly 18.5 percent. 
Although the job market has seen improvements over the past few years, the rates remain higher than pre-recession levels. Meanwhile, graduating at the wrong time and in the wrong market is likely to influence the earnings potential of these students throughout their entire career. 
 
“In general, they are not going to do well,” said Heidi Shierholz, an EPI economist. “These young people can expect lower earnings for the next couple of decades.”
Young college graduates who are working full-time are making roughly $3,200 less each year, than they were in 2000. The average hourly wage for these individuals was $16.60 last year, compared to $18.15 in 2000. 
 
As of last year, roughly 52 percent of employed college graduates under the age of 25 were not working in jobs that require a college degree, which is up from 47 percent in 2007 and 40 percent in 2000. However, EPI claimed the job problem for recent college graduates stems from weak demand for goods and services, rather than a lack of the appropriate skills or education. 
 
Source: AP

Guarantee

Guarantee

Obtaining a Guarantee (or Surety)
A guarantee, or surety, is a promise made by a third party who agrees to assume responsibility on a liability, such as a bond, loan, or payment, of a borrower in the event of default. The individual or company who agrees to the responsibility, or the guarantor, can often be a private individual or a bank. Often the use of a bank reduces the risk to various liabilities and often improves bond credit agency ratings.
In the United States and other common law jurisdictions, a guarantee is only value when written and signed by both the borrower and guarantor. Also, a creditor cannot pursue a guarantor unless the creditor has exhausted all possible forms of pursuing the debtor.
As mentioned, individuals can obtain guarantees through banks. The advising bank acts as a party of the guarantee and can provide various different guarantees, such as a performance bond, warranty bond, advance payment guarantee, or credit/loan repayment guarantee.
The government can also enter into the commitment of guaranteeing a surety. Under Title 15 of the U.S. Code, § 694b, Surety bond guarantees, the Administration may guarantee a surety against loss from the principle’s breach of bond as long as the principle does not exceed $5,000,000. The Administration can evaluate the commitments based on previous experience with the surety and authorize any surety without further administration approval.
All guarantees that are issued must involve a small business concern, require a person to bid on the contract, expect that the principle will perform the conditions reasonable to the bond, and that the borrower agrees to these conditions as well.
Small businesses can receive warranties from the federal government. The U.S. Small Business organization, an independent agency of the federal government who works to help and protect small business interests, has two surety bond guarantee programs. The Office of Surety Guarantees, a division of the Small Business Administration works to provide and manage these guarantees for qualified small. One is the prior approval, or the SBG Program and the other is the Preferred, or PSB program. 
In either program, the United States Small Business Administration does not directly issue the bond to the borrower. For the Prior Approval program, the borrower must be able to find a bonding agent representing a participating surety company or just a surety company who is willing to provide the bond. 
A borrower must submit the correct forms and provide the proper information to the agency who will then choose to execute the bother, either with or wither the Small Business Administration guarantee. All forms for obtaining the surety bond guarantee can be found on the Small Business Administration’s website. This application can be submitted 24 hours a day, seven days a week electronically through the E-application system. The information is sent directly to the surety company agent. 

Bill of Sale

Bill of Sale

 
A bill of sale is a document that a purchaser receives from a seller signifying an item being sold, its value and the transfer of title from one owner to another.  A bill of sale can be absolute or conditional, depending on the prior agreement of the grantor and grantee.  The bill of sale is generally a legal document that transfers the rights of ownership or use and both parties are expected to abide by the conditions of the agreement.  Bill of sales is typically used in the car purchases.
 
 
What is an absolute bill of sale?
 
 
An absolute bill of sale transfers rights of use and ownership to another party.  The grantor party does not retain a security interest in the transfer of the item.
 
 
What is a conditional bill of sale?
 
 
Under a conditional bill of sale, the grantor party maintains the right of seizure against the grantee if certain conditions stipulated in the bill of sale are not met.  A conditional bill of sale can be used in “title loans” that put a creditor’s item, such as the title to a car, up as collateral for a loan.  These loans are generally high interest and the debtor risks losing possession of the car if payments on the loan cannot be made.  Until the debtor fails to repay the loan, the conditional bill of sale remains in effect, with the debtor enjoying the use of the property (the car) but handing the potential for the car to be repossessed to the creditor.
 
 
What items are bills of sale used for?
 
 
Bills of sale can be used for significant, moveable pieces of property such as cars, furniture and jewelry.  A bill of sale form can be customized based on the nature of the sale and a lawyer can help generate a legally binding bill of sale.
 
 
What is featured on a typical bill of sale form?
 
 
A proper bill of sale form will start with the names and addresses of the two parties involved and signify which among is the seller and purchaser.  The bill of sale form will then state the location of the sale and location of the property and confirm that the item is being sold.
The next part of the bill of sale form is the most important part and signifies the amount that is being paid for the properly and when the item will be delivered.  There will also be a provision for the transfer of funds to cover the transfer of property.  Especially in bills of sale involving motor vehicles, there will be detailed information about the make, model, color and style of the property as well as identification numbers, if applicable.
 
 
The bill of sale will end with guarantees from the seller that the vehicle or other property is free from other claims from creditors and that the seller has the legal right to sell the property.  The seller disavows claims any further damages of losses associated with the property.
 

Teapot Dome Scandal

Teapot Dome Scandal

A Look at the Teapot Dome Scandal


The Teapot Dome Scandal of the 1920’s was a bribery incident due to the influence of oil money during the Warren G. Harding Administration. During this time, Harding proved himself to be a poor president. He was unable to properly manage the Federal government and often delegated work and authority to his cabinet officials. Many of these officials were dishonest, creating many problems.
In the beginning of the 1900’s the United States Navy switched from coal to oil as their primary source of fuel. In order to ensure that they would have enough, President Taft designated many oil producing areas as Naval Oil Reserves.
The Teapot Dome Scandal began with the Warren Administration. Warren G. Harding was a U.S. Senator from Ohio who was elected into the Presidential office in 1920. Early in his administration, before the Teapot Dome Scandal, the Secretary of the Navy requested that some of the responsibility for the Navy’s reserve oil be transferred to the Department of the Interior. This included the Teapot Dome field in Wyoming, which the Teapot Dome Scandal was named after, and other land in California.
At the time of the early events of the Teapot Dome Scandal, Albert B. Fall was the Secretary of the Interior. In 1921, he rented these naval oil reserves to two private oil companies, the Pan American Petroleum Company and the Mammoth Oil Company in exchange for gifts and loans, the sum of which added up to approximately $404,000.
The events of the Teapot Dome Scandal were not discovered and publicly announced till On April 14, 1922, the Wall Street Journal released a report stating that there had been an arrangement between Secretary Fall and a private oil company. The report claimed that the land had been leased out without any competitive bidding. 
The next date, the Senate opened up an investigation of the Teapot Dome Scandal. The Senate expected the investigation to be most likely futile, so the committee’s Republican Leadership allowed Democrat Thomas Walsh, the Montana Democratic Senator, chair the panel. The panel eventually discovered the Secretary’s shady agreement   because of one piece of evidence that Secretary Fall had not covered up.
In 1927, the Supreme Court invalidated the oil leases that have been illegally obtained through Secretary Fall the reserves were returned to the U.S. Navy. In 1929, Albert Fall was found guilty of bribery and fined $100,000. He also became the first Presidential cabinet member to be given a prison sentence for his actions while in office. He received a sentence of one year in prison.
The Teapot Dome Scandal as well as other cases quickly tested the reach of the Senate’s investigative powers. In 1927, the Supreme Court ruled on the landmark case, McGrain v. Daugherty, and found that Congress had the right to compel a witness to testify before the committees of Congress.

Budgeting Software

Budgeting Software

When you are planning for the future, or just trying to eliminate unnecessary expenses, it is important to start and manage a budget.  A great tool for doing so is to use budgeting software.  Budgeting software comes in all shapes and sizes.  There are many free online budgeting software applications that an individual, family, or business can use through the internet in helping to formulate a budget.  
Exceptional free budgeting software such as Quicken Online can help you develop a budget and maintain your finances and even directly input your bank account and credit card information automatically.  Quicken Online will also let you view this data including your expenses, income, investments and retirement data through the use of charts and graphs.
When you have complex financial information coming in you may want to opt for budgeting software that does a little more.  Quicken offers a number of budgeting software choices that are specifically tailored to what your needs are.  The price ranges for budgeting software can vary from $50 to $200 for individuals with higher needs.
Quicken offers a number of products including Quicken Deluxe, Quicken Premier, Quicken Home & Business, and Quicken Rental Property Manager.  
Quicken Deluxe is the basic budgeting software offered by Quicken and allows the consumer to track assets in bank accounts, credit cards, investment and retirement accounts at once.  The program will automatically update information from those accounts for easy access so that you do not have to go searching through all of your accounts to find out the status of your income and investments.  Quicken Deluxe will also help you to categorize your financial transactions and reduce your debt over time.
More complex and expensive, budgeting software includes Quicken Home & Business.  This program has all the advantages of Quicken Deluxe and Quicken Premier but also compiles and categorizes data relating to both personal and financial finances.  The Home & Business budgeting software will also find tax deductible business expenses by looking through your financial data.  In addition, the budgeting software will create cash flow and profit/loss reports and charts to help you manage your business and assets.
Budgeting software is a vital tool in today’s complex society.  The amount of bills, expenses, and income that a person, and especially a business, deals with on a monthly basis can be overwhelming.  Budgeting software can save you time and accurately report your finances to help you save money and eliminate unnecessary expenses.  The cost of budgeting software may add up to $200 or more but it is often the case that the use of budgeting software will help you save more than that in a short period of time.

High Dividend Stocks

High Dividend Stocks

A dividend is a payment made to a shareholder of stocks.  A dividend serves as a share of profits the company is making and can be paid out on a scheduled basis or issued at the discretion of the executive board.  Typically, when a company earns profits over its operating costs, that money can be used to either reinvest in the company or be paid to the owners.  
High dividend stocks can return a high rate of income as the company pays out a large amounts per the price of the stock.  For example, some of the highest returning dividend stocks can return dividends as high as 20% of the stock purchase price.  These extremely high dividend yields are often difficult to predict, as the dividend is usually the result of an unforeseen increase in profits over a short period of time.  These extremely high dividend stocks are also usually high risk stocks, which may or may not be safe areas of long term investment.
Many blue chip stocks provide high dividend returns and provide a more secure place to invest over a long term period.  Many high profile stocks will return between 4% to 6% yearly on their investment.  These high dividend stocks are very unlikely to reach the dividend levels of higher risk stocks, however they provide a much more consistent and safer investment option.  
In order to best predict which high dividend stocks to invest in, it is important to understand the basic process of how a dividend is distributed.  
1. First, all dividends are at the discretion of the board of directors.  If a company becomes stagnant or loses money, dividends may be limited or not distributed at all.
2. In order to receive a dividend, you must own the stock before the ex-dividend date through the record date.  The time in between these dates can be a couple days to about a week.
3.  Payment of the dividend will be made on the payment date, which is often a few weeks after the record date.  
While high dividend stocks will often provide relatively quick returns on investments in the stock market, you must consider the tax consequences of these profits.  Currently, dividends are taxed according to the income bracket of the taxpayer and are taxed the same as any other source of income.  Tax rates can range from 10% for the lowest income bracket up to 25% for the highest taxable income bracket.  
Investing in high dividend stocks can provide a relatively safe and consistent source of investment income.  As most investment strategies call for, make sure to diversify you investment portfolio, using the numerous types of investment resources available.  High dividend stocks can play an important role in your investment portfolio.   
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