May 29, 2016

Average Profit Margin is 7.5% For 212 Industries

Apparently the public opinion is that businesses have a profit margin of 36%.     However the actual average profit margin for 212 industries is 7.5%.

I'm simply paraphrasing what is covered in the article The public thinks the average company makes a 36% profit margin, which is about 5X too high from the American Enterprise Institute.

This isn't the same as saying that the average business has a margin of 7.5% but that the average among industries is 7.5%.   But its useful to know that a lot of industries have lower margins.

That article got their data on industry margins from Yahoo's business site.

A lot of industries have low profit margins.     Grocery stores are at 1.4%.    Movie theatres are 1%.   It also includes those industries that are losing money (at least temporarily).      Oil and gas drilling and exploration is at -6.8%.       On the other hand there are industries that make pretty high profit margins.    Wireless communications is at 29.7%.   Real estate development is at 38.7%.      Regional Midwest banks made 24.1%.    Around the middle are things like restaurants at 7.5%, jewelry stores at 7.6% and multimedia and graphics software at 7.1%.

--

May 27, 2016

Best of Blogs for Week of May 27th

Every Friday afternoon I share some of the more interesting or notable posts that I have seen in the personal finance blogs and other sources for the past week

MyMoneyBlog tells us about Free FICO Score For Everyone via CreditScoreCard, No Credit Card Required

MMB also talks about Credit Card Churning vs. Sustainable, Efficient Sampling

DQYDJ made a Compound Annual Growth Rate Calculator (CAGR)
--

HSN and Ebates - $10 Cash Back With NO Minimum Purchase -YMMV

I recently had a $10 cash back deal for QVC with Ebates and made about $5 on that one.   I checked my Ebates account again just now and found another very similar deal from HSN.    The offer is good till 6/26.



To find the offer I clicked on the link in the upper right hand corner to get to my account.    Then the offer was listed in the section "special bonus offer just for you".    I'm pretty sure these are targeted offers so YMMV.


Like the QVC deal this could be a money maker.    HSN has clearance deals some of which have free shipping.    I found a garment bag with free shipping for $5.    With $10 cash back that should net me $5.    Plus Ebates also pays 5% cash back on the purchase so I'll get another 25¢ on the deal.

For new HSN customers they also have a deal for $10 off of purchases of $20 using promo code BEAUTY10.    You could get $10 off and $10 cash back on a $20+ purchase.    That deal expires 5/31 though.


Standard Ebates blurb:To get cash back from Ebates you need to be signed up with Ebates.  Then simply go to Ebates to get the referral to the store before you do your shopping.  I also get a referral bonus if you use my links to sign up with Ebates.   


--This article may contain referral links which pay this site a commission for purchases made at the sites.

May 25, 2016

About 2/3 of Student Loan Debt Is Owed By People Over 30 Years Old

I saw an internet meme recently depicting a 20 something woman with a caption basically whining about student loan debt.    I'd expect that the common picture of a student loan debtor is someone who's in their 20's.   But in reality MOST student loan debt is held by people over 30 years old.

Sources are the Federal Reserve Bank of New York page Student loan debt by age group and report Household Debt and Credit: Student Debt.

As of 2012 the share of debt held by age group is as follows:

age group % of debt
60+ 5%
50-59 12%
40-49 17%
30-39 33%
under 30 33%

and graphically :

Of course that data is a few years old now but the trend is for the % of debt held by people under 30 to be dropping.   In 2005 the under 30 group held about 40% of the debt.

--

May 20, 2016

Best of Blogs for Week of May 20th

Every Friday afternoon I share some of the more interesting or notable posts that I have seen in the personal finance blogs and other sources for the past week

MyMoneyBlog passes along the idea to Do What You Love – If You Can Work For Yourself
which came from a book that neither he nor I have read, but we both think its a good idea.

MMB also addresses the LendingClub Drama: Should Investor-Lenders Be Scared of Bankruptcy?

DoughRoller has a list of 30 Items You Need to Budget for When You Buy a Home

--

May 18, 2016

8"x8" Photo book From Shutterfly ($7.99 shipping) via DiscoverDeals

Discover Card is offering a free 8"8" hard back photo book at Shutterfly through their DiscoverDeals portal.    You do have to pay the $7.99 shipping charge.    $8 for a custom photo book is still a good deal though.  I've used Shutterfly a few times and their software works well.

You have to be a Discover card holder and log in to their site to use the Discover Deals.    If you search for shutterfly you'll find the offer there.    Offer expires June 30th


(no commission links here, but feel free to throw money at me through your monitor)

--

May 17, 2016

$10 Cash Back at QVC from Ebates for NO Minimum Purchase YMMV, possible Money Maker

I just logged into my Ebates account and noticed an offer there for $10 cash back at QVC with $0 minimum purchase.


To find the offer I clicked on the link in the upper right hand corner to get to my account.    Then the offer was listed in the section "special bonus offer just for you"
From the wording there I'm thinking this might be a targeted offer but I'm not sure, so YMMV.

This could be a money maker.    QVC has some clearance items that are under $10 and some of them have free shipping.   I just bought a clothing item on clearance for $5.06 with free S/H and that should qualify me for the $10 cashback and then should net me $4.94.

Update 5/18 :    I can confirm the $10 bonus deal works.  I ordered the item yesterday for $5.06 and today I see a $10 credit in my Ebates account.  I also got the normal Ebates 1% cashback for shopping at QVC





Standard Ebates blurb:To get cash back from Ebates you need to be signed up with Ebates.  Then simply go to Ebates to get the referral to the store before you do your shopping.  I also get a referral bonus if you use my links to sign up with Ebates.   


--This article may contain referral links which pay this site a commission for purchases made at the sites.

May 10, 2016

Rental Sale Tax Calculator


I found a calculator that figures your tax bill between capital gains, depreciation recapture and medicare tax :

Capital Gain Tax Calculation

Use it for estimation purposes only.

The calculator is hosted by Asset Preservation Inc. who handles 1031 exchanges.     I am not a CPA or anything and I can't attest to the 100% accuracy of the calculator but it looks correct to me.    


We've got a rental property for which my initial investment was about $50,000.   If I sold that property today for $55,000  then my tax bill would be about $4750.   Huh?    Yeah.   Taxes would eat up almost my entire gain.   If our income was significantly higher we'd get hit with the new 3.8% Medicare tax and the bill would be $5548.    I could theoretically have a tax bill that eats up over 100% of our gains.   Yikes!     Well almost all of that is due to depreciation recapture.   I've owned that property for over a decade and would have to repay the depreciation at 25%.   That alone accounts for ~$4500 in taxes.   Remember folks that depreciation on rentals is really just tax deferral.



--

May 9, 2016

Eat for FREE - HelloFresh Meals via Groupon for New TopCashBack Members


TopCashBack is offering a $30/$36 cashback deal for NEW TopCashBack members on a Groupon deal for HelloFresh meals.   The Groupon deal is $29/$35 (vegetarian or regular) for a week worth of HelloFresh meals for two.   With the cashback the deal is effectively free and you can eat free for a week!   Looks like a week of membership is 3 meals for 2 people.

Follow this link for the deal

"Visit Groupon through TopCashback, purchase the 'one week of subscription cook-at-home meals for two from HelloFresh' deal priced at $29 for a vegetarian box or $35 for a classic box and within seven days either $30 or $36 cashback (depending on the box you choose) will post in your TopCashback account. "

Again this is only for NEW TopCashBack members.     Follow the link above to sign up with TopCashBack and then use their site to shop at Groupon.

And Yes I get a referral commission if you follow my link, so please do sign up via the link above.



--This article may contain referral links which pay this site a commission for purchases made at the sites.

May 8, 2016

10 Years of Dividend Yield Ranges for VNQ

I looked at VNQ (Vanguard REIT ETF) just now and noticed the dividend yield is at 4.21% as I write this.   Thats a bit higher than I recall seeing it.   The dividends you get from VNQ will vary because the dividends of the REITS it holds vary.    The price you pay for VNQ will also vary but because its traded on the open market and its market value fluctuates.   The yield you get from VNQ will depend on what you paid and what the combined dividend of the REITs happens to be.

I pulled the high and low trading value of VNQ for the 2005 to 2015 period (all off Yahoo Finance VNQ).   I also summed up the annual dividend payment for those years.    Between these I figured the range of dividends you'd get if you bought VNQ in each year.    For example: in 2005 the ETF traded between a low of $51.12 and a low of $63.45.    The dividend total for 2005 was $3.56.    If you bought at the low or high your yield would be 5.6% or 7% respectively.

Here's the chart :



And the price  & dividend data :

max min DIV
12/1/2005 63.45 51.12 3.561
12/1/2006 81.15 59.16 3.254
12/3/2007 87.44 60.01 3.111
12/1/2008 68.95 22.52 3
12/1/2009 46.64 19.95 1.964
12/1/2010 57.65 40.33 1.891
12/1/2011 63.32 47.10 2.05
12/3/2012 69.20 57.03 2.343
12/2/2013 78.86 63.40 2.791
12/1/2014 83.09 64.05 2.919
12/1/2015 89.27 71.67 3.124

The yields in 2008 and 2009 are higher for people who bought VNQ at cheap prices after the market crash.    In the past 5 years the dividend yield averaged 4%.

--

May 6, 2016

Best of Blogs for Week of May 6th

Every Friday afternoon I share some of the more interesting or notable posts that I have seen in the personal finance blogs and other sources for the past week

TheBigPicture shared Drivers of Equity Returns in the Past 50 Years

MyMoneyBlog asks Mortgage Rates at 3-Year Lows: Refinance Check Time Again?

ClarkHoward's site explains Why paying off PMI should be a top financial priority

--

May 5, 2016

I Wouldn't Worry About A Sub-Prime Auto Loan Crisis or Bubble

Looks like the "bubble to get worried about" for the day is the sub prime auto loan bubble.    I just saw two references about it in my daily twitter feed.     Apparently Esquire print magazine has an article and so does Slate.

So why shouldn't we get all worked up about it?

Buried halfway down a NYT article from 2014 in a mult-part discussion of the sub prime auto loan topic, they say :
"The size of the subprime auto loan market is a tiny fraction of what subprime mortgage market was at its peak, and its implosion would not have the same far-reaching consequences."


According to Credit.com as of 2015 the total car loan debt was $950B and sub prime market was 27% of that.    Thats about $256B in debt total.     I don't see general information on the average interest rates for the loans.   One reference, in that 2014 NYT article says that some bundled loans averaged 18.4%.    Of course thats way higher than the average car loan in general which is currently around 3% (sourced again from NYT).    

In 2006, just a single year, $600B in subprime home loans were originated.   (from Wikipedia)
Outstanding mortgage debt peaked around $14.7T in 2008 (the fed historical data )     Before the bubble burst about 20% of new loans were subprime.  

I also don't see any sign that this is really any kind of bubble.    There have always been high interest rate loans on cars for people with bad credit.   This isn't anything new and the rate of borrowing isn't even hitting the rate from before the recession.   This is really more along the lines of "business as usual" than a bubble as far as I see.

High interest rate car loans are certainly a problem and have really difficult impacts to low income / poor credit rating people who get them.   The loans are also often associated with predatory lending practices.    I don't want to minimize the negative aspect of these loans and the drag they have on peoples finances.    

But there isn't a bubble in the sub prime auto loan market and even if there was, if it were to pop it wouldn't have 1/10 the impact that the great recession housing bust had.


--

Blog Widget by LinkWithin