TSD Memphis

Thu04242014

Business

Did you know that you can lose money that is invested in bonds?

CharlesSimsJr-160This is a question you could soon begin asking as a recent rise in interest rates contributed to price declines in many bond funds. News the Federal Reserve feels comfortable enough with the strength and state of our economy to consider a change in current monetary policy is, without doubt, a positive development. Unfortunately, for some bond investors, good news may be bad news!

Bond prices and yields have an inverse relationship, meaning they move in opposite directions. This means as yields (interest rates) rise, bond prices (values) can fall. Many investors – driven by fear, the need for income, increasing underweight allocations, or other factors – have invested heavily in bonds. Over the past five years, this demand has helped drive bond prices higher, lowering yields and subjecting many investors to the often ignored or forgotten risks associated with these investments, one of which is "interest rate risk".

"Interest rate risk" is a term used to describe how an investment's value will change due to an increase or decrease in interest rates. As a simple example: a bond yielding 4 percent is more valuable to investors if interest rates fall to 2 percent and is less valuable to investors if interest rates rise to 6 percent. This is because their fixed interest income would either be greater than or less than what a new investor would receive purchasing a bond at current rates. Interest rate risk affects all bondholders, but typically bonds with longer maturities and/or lower yields are most impacted.

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Booming entrepreneurship among black women

blackwoman 600WASHINGTON – Cheryl Lofton had never intended to be a small business owner. Her grandfather, J.C. Lofton, was the first African American to own a tailoring school and related business in Washington, D.C. She spent her summers working with him, learning the craft. She was able to earn money while enrolled at Howard University by ironing, mending, and tailoring her classmates' clothes.

When her grandfather became ill, she found herself spending more time on the business – including purchasing a new building – and less time sewing and attending to financial matters.

"The day I opened the doors to the new building was the day he died," she recalls. "I was the first college-educated person in my family, and I went so I wouldn't have to join the family business. But my conscience wouldn't let me let the business go under. At the time, no one else in the family was interested or able."

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The business of childcare

wealthy 600Quality childcare is not just about babysitting and entertaining the child. As competition amongst centers increases, so does the need to offer a creative and learning environment where a child's appetite for learning is stimulated.

Tiffany Glover, owner of The Academy of Creative Learning, makes it her mission to challenge and develop young minds at her three-star academy. Equipped with an advanced degree and credentials, Glover prides herself on heading up a staff of like-minded professionals that use every opportunity to educate and motivate the children in their care.

Carlee McCullough: Tell me about yourself?
Tiffany Glover: I am the owner of The Academy of Creative Learning. I hold an MBA and I have over 18 years of professional experience as a human resources professional, entrepreneur, leader, early childhood educator and consultant. Additionally, I have a credential as a Tennessee Early Childhood Administrator (master level).

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1 in 6 unemployed are substance abusers

substance 600NEW YORK – About 1 in 6 unemployed workers are addicted to alcohol or drugs – almost twice the rate for full-time workers, according to the government's National Survey on Drug Use and Health.

The survey shows that 17 percent of unemployed workers had a substance abuse disorder last year, whereas 9 percent of full-time workers did so. The numbers are self-reported, and therefore, could be even higher in reality.

Substance dependence is defined by several factors, including having withdrawals, repeatedly using a substance over the course of one month and witnessing related adverse effects at home, work or school. Addictions to alcohol, illegal drugs and misused prescription drugs are all included.

 

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On Our Way To Wealthy: day-cares

CarleeMcCullough-160Entrepreneurs with a passion for childcare and child development may become attracted to the idea of day-care business and what they consider a lucrative calling. The demand for services is increasing steadily and as the industry has evolved, so have the reimbursement formulas.

Parents in search of quality childcare typically will find their options fall into three categories: family care provided by a relative, in-home care provided by a nanny or babysitter, or day-care center.

Competition among day-care businesses is fierce. As more people move into the childcare business that equates to more options for parents and potentially diluted attendance at many centers. On the face of it, a move into childcare would appear a profitable business venture. However, state regulations have increased, funding formulas have caused decreased payments, and many centers are barely operating at break even.

 

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Walmart VP pitches principles to biz-seeking entrepreneurs

MBDABusinessoftheYear 600Service, price and commitment to the community are bankable principles the way Kevin S. Jones sees them and he shared that viewpoint while in Memphis last week.

Vice President of Inbound Transportation for Walmart Corporation, Jones was the keynote speaker last Friday (Nov. 16) at the Holiday Inn-University of Memphis as the Mid-South Minority Business Council (MMBC) Continuum and the Minority Business Development Agency (MBDA) Business Center wrapped up MEDWeek 2013.

Walmart, said Jones, was founded on the principles of service, price and commitment and still operates on them today. Small business owners who become part of the corporation's system of suppliers mirror Walmart's embrace of those principles, he said.

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Dan Loeb reveals stake in FedEx

FedExdanafter 600NEW YORK – Hedge fund manager Dan Loeb revealed a stake in FedEx Tuesday morning, adding the he likes the stock and the management of the company.

Shares of FedEx spiked following the announcement.

Speaking during a conference Tuesday hosted by The New York Times Dealbook blog, Loeb told the audience that he met with FedEx CEO Fred Smith in Memphis last week.

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Time to raise minimum wage!

wage 600The first federal minimum wage of 25 cents an hour was established in 1938. Since then, it has been raised 22 times. It's time to increase the floor for the 23rd time, from its current $7.25 to at least $10 an hour.

According to the Center for Economic Policy Research, the value of the minimum wage peaked in 1968. If the minimum wage had been indexed to the official Consumer Price Index each year, the minimum wage today would be $10.52. The last time the minimum wage was raised was in 2007, when it was raised from $5.15 to $7.25.
Still, there is resistance.

Republican leaders say raising the minimum wage will cost jobs. But opponents, such as Washington Post columnist Jared Bernstein, argue that rather than job loss, employers compensate by charging higher prices and increasing productivity.

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Hospice care: the business of providing a dignified death

CarleeMcCullough-160ON OUR WAY TO WEALTHY Be strong. Fight until the end. Never give up. Continue to pray.

If anyone close to you has ever experienced a life-threatening illness or accident, such phrases may have been used as encouragement.

Still, death is inevitable, with the business of providing a dignified death known as hospice care. Although often thought of as a physical place, hospice is a specific type of healthcare with the primary focus of providing the patient with comfort and palliative care. Palliative care refers to the relief of the pain, symptoms and stress of serious illness. Once the doctor and patient are in agreement that the illness can not be reversed, hospice care becomes a consideration.

Hospice care may be provided in the home or in a hospital, assisted living, veterans, prison or a long-term facility. Hospice is not designed to hasten or prevent death. It is an option that provides the patient with management of pain and symptoms, an increased quality of life, and also emotional and spiritual support. Ultimately, terminally ill patients in hospice are given the opportunity to choose the end-of-life care received.

From a business perspective, hospice care is a multimillion-dollar. Businesses are compensated based on enrollment. With little to no expenses earmarked for a cure, the profit margins tend to be great. A very profitable hospice business can be established with the appropriate resources, a solid business plan and knowledge of the industry or affiliation with professionals that possess the requisite knowledge.

 

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Preparing for medical expenses with an HSA

CharlesSimsJr-160According to a 2013 survey, almost 90 percent of middle-income Americans do not feel prepared to handle the financial cost of a critical illness. Most respondents said they would have to use their savings, but 75 percent had less than $20,000 in savings and 25 percent had no savings at all.

A critical illness can be especially challenging, but even healthy people with medical insurance can face substantial out-of-pocket expenses. The total health-care cost for a typical family of four covered by an employer-sponsored PPO insurance plan is $22,030 in 2013. More than 40 percent of this total – $9,144 – is paid by employees through payroll deductions and out-of-pocket expenditures.

One strategy that may help reduce health-care costs while saving for future expenses is to combine a high-deductible health plan (HDHP) with a health savings account (HSA).

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African-American luxury spending power; Is Barneys jeopardizing it?

Barneys handbag-400Luxury spending power by African Americans is estimated to be nearly $90 billion, according to Diversity Affluence, a consultancy for upscale brands.

This includes affluent African-American households with an individual salary of $75,000 and households with income of at least $150,000.

Trying to protect its brand and sales, Barneys New York executives met with the Rev. Al Sharpton and other leaders from the National Action Network on Tuesday to address the allegations of racial profiling.

As Barneys and Macy's investigate these allegations their brands may be tarnished, especially with African-American luxury shoppers.

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What is an IRA rollover?

CharlesSimsJr-160If you leave a job or retire, you might want to transfer the money you've invested in one or more employer-sponsored retirement plans to an individual retirement account (IRA). An IRA rollover is an effective way to keep your money accumulating tax deferred.

Using an IRA rollover, you transfer your retirement savings to an account at a private institution of your choice, and you choose how you will invest the funds. To preserve the tax-deferred status of retirement savings, the funds must be deposited in the IRA within 60 days of withdrawal from an employer's plan. To avoid potential penalties and a 20 percent federal income tax withholding from your former employer, you should arrange for a direct, institution-to-institution transfer.

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Small businesses must plan for the unexpected

CarleeMcCullough-160ON OUR WAY TO WEALTHY: Even with the full understanding that some accidents and illnesses cannot be avoided, few small business owners plan for the unexpected. One step in the planning process is to make sure proper insurance coverage is in place.

For the most part, we are all accustomed to purchasing the basic insurance policies that cover our home, car and life. But there are different types of disability income insurance plans that will protect income and even pay bills when necessary.

Disability income insurance is designed to maintain financial stability when you are sick, hurt or unable to work by providing a monthly income directly to the business owner. It is typically used as the primary income replacement that helps prevent the depletion of savings and retirement income.

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