Contactless Payments Good For Mastercard But Bad For Consumers

Universal contactless smart card reader symbol (Photo credit: Wikipedia)

We all know that when using credit cards to make purchases we tend to spend 18% more than if we used cash. The convenience of a credit credit and its psychological detachment from real money makes us spend more. Don't think it can get worse than that? With the current introduction of contactless payment methods we now are going to spend 30 percent more, according to a new study released by Mastercard.

Contactless payments come about when credit cards or smart phones that feature smart chips implanted with radio frequency identification, generally referred to as RFID. Consumers merely "wave" the card or smart phone across a payment terminal instead of having to "swipe" the card through the terminal.

Contactless payment methods are becoming a lot more common. Visa has lately ushered in PayWave; MasterCard has PayPass and American Express has

Express Pay. The MasterCard study anticipates 150 million mobile devices will be contactless enabled within the next a couple of years.

The MasterCard study took some of their customers and divided the accounts into low, medium and high spend segments according to their monthly spending prior to ushering in the contactless payment methods. The 30% increase in spending was consistent across all three segments.

The study also found that after the first contactless transaction, users spend an average of 25 percent more online, 64 percent more abroad and 20 percent

more in recurring payments.

"While this increased spending may be good news for banks and retailers, contactless payments can be dangerous to the household budget," says Bill Hardekopf, CEO of LowCards.com. "You can now make a purchase with just a wave of your phone without a thought about how much the purchase really costs. It could make it too easy for some people to buy something spontaneously or throw a few more items into the shopping cart. Making good spending decisions takes analysis and discipline. We probably need to feel the pain of money leaving our bank account to help us evaluate if we can afford it and if we really need it."

Investing In Gold Takes Many Forms

American Gold Eagle (Photo credit: Wikipedia)I always found investing a fascinating subject. Having your money work for you and growing in value made a lot of sense to me. Sending your money off to your financial planner to invest for you is what most people usually do. But some investors choose a different path and invest in gold and choose to physically hold the gold in their possession, which they can't do with a paper share investment.

Gold is one of the few investments where you can actually see and hold it. Many people combine their investing goals with their love of coin collecting by investing in gold coins. Many countries issue their own gold coins like the American Eagle, Canadian Maple Leaf, the South African Krugerrand, and the Austrian Philharmonic.

The U.S. government issues gold coins which are authorized by the U.S. Congress, minted at the U.S. Mint and produced with a U.S. Mint mark and U.S. Dollar denomination...making them Legal Tender.

The US Money Reserve offers a wide variety of gold numismatic coins including American Eagle proof gold coins and modern Congressional gold coins available in mint and proof grades. Many gold coin investors realize the added value and security of holding gold coins minted by the U.S government and which are also legal tender.

Gold and gold coins can be a part of a diversified investment strategy. Being weighted in any investment to a great percentage is not good investment practice. But being diversified is good practice and gold can be a small part of that.

Will The Facebook IPO Be A Boom Or Bust For Investors?

                         (Photo credit: Wikipedia)This week the Facebook IPO will hit the street with much anticipation. Something this big will be good for the market and may help raise the over mood of the traders. But is it good for the average investor? I am so temped to get in on this IPO and own a piece of the Facebook phenomenon. But is it good for me and my overall goals.

My investment plan consists of building a portfolio of low expense index funds and Facebook is a detour in my plan. What is it about the IPO that is drawing me to it like a moth to the flame? Lets remove the emotion and go to the numbers.

Thomas Baekdal at Baekdal.com had a great Google+ post comparing it to Ford Motor Company. He wrote: 

- Ford has 36 times higher revenue- Ford has 8 times higher profit- Ford has 8 times as many assets (including a much larger cash reserve)- ...but Ford is valued at only 41% of Facebook's expected market cap. 

More to the point. Ford's market cap is valued at 70% of their total assets. Meaning that if Ford where to closed down today, the investors could just sell the assets and get their money back.

But Facebook is valued 1,370% higher than what they have in assets, meaning that if Facebook closed down today, we are talking serious financial loss.
This is the dot.com era all over again. Value is being determined based on activity (page views, ad impressions, users), instead of real things like... you know... money and assets.

At the high end of a projected range of $28 to $35 a share, Facebook would be valued at 99 times its earnings, a higher multiple than 99 percent of companies in the Standard & Poor’s 500 Index, according to Bloomberg Business week.

When looking at the numbers, the urge to buy this stock is fading. No matter what happens, the Facebook IPO should go down in stock market history. Look for this weeks Facebook IPO, with its stock market symbol (FB) and buy a share for me.

Use An Annuity Broker To Compare The Market For The Best Annuity Rates

Buying an annuity is something most people don’t think about until they reach retirement age. Once they do decide they are intending to purchase an annuity, most end up buying the annuity from the company with which they have been building up their pension with. This can be a costly mistake as your current pension provider is unlikely to have the highest rates on the market. Also not all providers offer the same annuity products, which means you will never know who has the best deal to suit your circumstances unless you shop around for the best rates.

Shopping for an annuity can be done in a number of different ways. You could in theory speak to each provider individually, although this would be extremely time consuming and indeed counter intuitive unless you are a pension guru yourself. The best way to compare the market for the best rates is to speak to an annuities broker. They will be able find out what your needs in retirement are and how best they can be met given your own financial situation. They will also be able to compare providers to help you find the best rates.

As mentioned previously not all annuity providers offer the same products with many companies simply providing standard, level annuities. These do not take into account a person’s health or the fact that they might want to increase their income in the future to protect against inflation. Those who have health conditions that shorten life expectancy could be missing out on extra income by not shopping around for the best deal. It is estimated that as many as 70% of all annuitants could be eligible for enhancements on their annuities. However because most retirees buy their annuity without comparing the market only 10% of all annuities purchased come with enhancements. This is course suits the providers as they are not obliged to offer any advice and also can make money by selling a poor value annuity.

If you want to avoid losing out on a potentially higher income in retirement then make sure you speak to an annuity specialist or independent financial advisor. The issue with annuities is that one you buy one that’s it, you can’t change it, swap it, or alter it…..you are stuck. Unlike with car or home insurance that can be swapped annually depending on who has the best deals, an annuity is for life. Your provider will offer some information about shopping around the market but it is not as yet the default position.

All Inclusive Holidays Growing In Popularity

                              (Photo credit: Wikipedia)

There is a growing trend in holiday vacations that gather all the parts of a vacation into one package, for one price. These all inclusive holidays include your hotel, food, kids entertainment, and even drinks for one price. Imagine, not having to worry about running out of money while on holiday. 

This idea of all inclusive holidays was invented by Club Med over 60 years ago. It has had much popularity over the years but not like it's seeing now. According to a Vacation Holiday survey, one third of all vacations are all inclusive holidays and this is up 50 % over the last 4 years. 

This type of vacation has changed the behavior of people on holiday. When they arrive at their destination 90 % of the guests do not venture off the resorts property. They believe that they already paid for their food and drink, why go off resort and have to pay money at a local restaurant or bar.

This has put a damper on the mood of local establishments. Businesses feel the loss of income and sometimes are closing because of it. Local businesses are reaching out to the resorts for relief. The resorts are looking into the problem and may be able to create a dine around plan to help alleviate the problem.

If you put yourself in the shoes of the vacationer, what would you do? The kids are having fun, drinks are on tap, and you have all the food you want; why leave.

Top 3 Ways to Help Your Adult Children Become Financially Independent

The Millennials (or Generation Y, as they’re sometimes called) have arguably been hit the hardest by the recession. In fact, some research estimates that only around 50% of recent college graduates find full-time jobs within a year of their graduation date. Because of how the economy has affected the Millennials, a considerable number of them rely on their Baby Boomer parents for financial support, often not out of choice but out of necessity. If your adult child is struggling to leave the nest and gain financial freedom, you probably feel the strain. Fortunately, there are some things you can do to help your adult children become more financially independent. Here are some of them:

1. Network for them – Your kids probably didn’t do much worthwhile professional networking in college. The other young people they know are unemployed too, and aren’t much help when it comes to referring them to potential employers. You’ve had decades to build a solid professional network. So, talk to people you know, and see if you can get your foot in the door at a few companies for your kids.

2. Encourage them to take any paid work – Yes, it’s frustrating to realize that your children can’t even get a job at Starbucks, even though you spent an exorbitant amount of money helping them through college. However, you and your kids need to swallow your pride. Any job is better than no job. So, encourage your child to take any work he or she can find, even if it’s part-time work. Any job will allow your son or daughter to acquire new skills, meet new people, and hopefully move up the ladder at some point. Starting off part-time in the mailroom can actually pay off.

3. Teach them good financial habits – You probably stressed the importance of saving money to your children throughout their lives. Now that their adults, they may need some extra help sharpening their financial skills. Remind them that credit usually isn’t the answer and budgeting can be a lifesaver. Teaching your kids how to make good financial choices will help them weather the storm of the bad economy and job market. Thanks to your guidance, by the time they do get the full-time job of their dreams, they’ll know exactly how to achieve financial success and security.

You can’t change the job market, but you can help your kids beat the system and become financially independent. You’ll be glad you put forth some extra effort when they’re out on their own and you’re able to save more for your retirement.

Author’s Bio: Carolyn is a guest blogger on the subjects of personal finance, small business finance, and ecommerce tools like order management systems, Shopify, 3dcart, and BigCommerce.