MONEY Greece

How Investors Should React to the Greek Crisis

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Louisa Gouliamaki—AFP/Getty Images The Greek economic crisis isn't ending anytime soon.

Step one: Don't panic.

Even from afar, it’s hard for U.S. investors to ignore the Greek economic crisis, which continues to roil global markets.

After Greece saw its bailout funds expire Tuesday—and became the first developed country to fail to pay back a loan from the International Monetary Fund—Greek prime minister Alexis Tsipras sent a letter offering concessions to European creditors in hopes that a new agreement might help the country remain afloat.

The fate of the Greek economy depends in large part on whether its government can quickly make a deal with European leaders.

One point of tension: Leaders in Germany, Greece’s biggest creditor, are insisting that the country accept additional austerity measures like pension cuts before it can get more emergency funds. Though a compromise could be reached this week, the worst case scenario is that Greece would continue to miss debt payments and, eventually, be forced out of the euro currency. Doing so would allow Greece to pursue its own fiscal and monetary policies in pursuit of economic recovery.

But what would that mean for investors around the world? The short answer, assuming you have a fairly diversified portfolio of stocks and bonds, is that it probably wouldn’t have a dramatic long-term effect.

Here’s why: If you look at the kind of target-date mutual funds that are popular compenents of many American retirement accounts, like 401(k)s—the Vanguard Target Retirement 2035, for example—about a third of their holdings are in foreign stocks. And of those foreign stocks, only a small fraction tend to be Greek companies. The Vanguard Total International Stock (which the 2035 fund holds), for example, has only about 0.07% of assets in Greek companies. So not a lot of direct impact.

The indirect impact is also likely to be muted. More than 45% of the holdings in Vanguard Total International Stock are in European countries—and if Greece leaves the Eurozone, that could affect companies and markets throughout the Continent. But some analysts are arguing that the market has already reacted, and perhaps even over-reacted, to the possibility of a so-called Grexit. “You have to assume that a substantial amount of the correction is priced in,” Lawrence McDonald, head of U.S. macro strategy at Societe Generale, recently told MarketWatch.

That being said, a note of caution ought to be sounded about the dollar. If the Greek crisis isn’t resolved quickly, it could lead to a flight to safety away from the euro and toward the U.S. dollar. The dollar’s strength has already led to sluggish profit growth in the U.S. In the past few months, the euro has rebounded a bit. But the euro could weaken again if crisis persists in Greece, putting U.S. companies that sell their goods abroad in a tough spot.

Still, even if you believe things in Greece will get worse before they get better, history suggests you’d be unwise to pull much of your money from the market right now. Though we could be in for more bad news and some painful market gyrations in the near term, keeping your money invested and sticking to your long-term strategy will likely pay off in the end—no matter what happens in Greece. Plus, there’s potentially good news for bond investors: If fear of European instability drives investors to seek out safe assets like U.S. Treasuries, then many bond funds will do well.

MONEY Love and Money

Financial Habits That Will Make You Sexier

couple on first date, man paying with credit card
Alamy

Money skills are more important than good looks when seeking a mate.

Ditch the makeup and hair products. Your budgeting skills might be the thing you should really show off on your next date.

In a recent survey about relationships and finances, MONEY found that both baby boomers and millennials agree on the three most attractive traits in a potential mate: a sense of humor, compassion, and—yes—financial responsibility. For both groups, those qualities all rank higher than physical chemistry, diligence, and even intellect.



Don’t worry if you don’t make a ton of money now. The survey, which included about some 500 millennial and 500 boomer respondents, found that smart financial habits were deemed more important than current salary among members of both age groups.

Both generations ranked budgeting and timely bill paying as particularly attractive behavior, though younger survey takers were more likely to value future earning potential in a mate. Property ownership was the least important for both generations.

Read next: Are You and Your Partner a Money Match?

MONEY Taxes

Corporations Dodge $200 Billion in Taxes Each Year

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Peter Dazeley—Getty Images

Developed countries lose out on $100 billion in revenue annually.

A new report from the United Nations finds that global companies are able to avoid hundreds of billions of dollars in taxes annually by moving profits offshore.

The paper, produced by the UN’s Conference on Trade and Development, suggests that strategies involving “foreign direct investment” result in lost tax revenue for developed countries like the United States—to the tune of $100 billion. Estimated losses for all developing nations are similar: Between $70 and $120 billion.

Companies are able to avoid taxes by shifting earnings away from countries with high tax rates—even if the profits were actually generated there—and moving them to nations with famously low rates.

For example, the report points out that the British Virgin Islands received more than $70 billion in foreign investment, nearly double that going to the United Kingdom—despite having an economy 3,000 times smaller.

International forums and organizations like the G20 and OECD are currently working toward an international agreement that would limit tax avoidance.

Read More: Everything You Need to Know About Companies Leaving America for Taxes

MONEY Sports

NBA Draft Tickets Are Crazy Expensive Right Now

NBA Commissioner Adam Silver commences the 2014 NBA Draft at Barclays Center on June 26, 2014 in the Brooklyn borough of New York City.
Mike Stobe—Getty Images NBA Commissioner Adam Silver at the 2014 NBA Draft at Barclays Center.

Fans are paying hundreds of dollars to watch the "action."

Some basketball fans are so excited for the coming NBA season that they are paying upwards of $300 for tickets — not to any game, mind you, but to the league’s draft.

The draft is being hosted by the Brooklyn Nets, and will take place Thursday night at the Barclays Center. Tickets on the secondary sales site SeatGeek right now are going for an average of about $90, though seats closer to the stage where NBA Commissioner Adam Silver will announce the picks are being listed for between $200 and $500.

The highest anyone has actually paid so far is reportedly $350, but some resellers are asking for thousands of dollars.

Face value for these tickets is $25 to $55, but demand has been especially high for this draft, leading to higher resale prices. The average ticket price for Thursday’s draft is higher than all but a handful of the Nets games that will take place in the upcoming season, says SeakGeek analyst Chris Leyden.

Why are prices hitting the roof for an event that basically consists of someone reading names? Local interest seems to be playing a big role. The New York Knicks are slotted for fourth pick of the draft, which is the team’s highest position since 1985, when it chose Georgetown’s Patrick Ewing. Of those searching for tickets to the draft on SeatGeek, 80% are based in the New York metro area, says Leyden.

The nearby Philadelphia 76ers have the third pick in the draft this year, which means Philly-based fans don’t have far to travel if they want in on the fun. The Minnesota Timberwolves and Los Angeles Lakers have first and second pick, respectively.

Read next: Patriots’ Rob Gronkowski Hasn’t Spent a Dime of His NFL Salary

MONEY internships

Here Are the Best U.S. Cities for Paid Internships

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Oli Kellett—Getty Images

Nationwide, only about half of student interns get paid.

College students flock to big cities like New York, Los Angeles, Chicago, and San Francisco hoping to land internships. But students who want to earn money in addition to experience while taking on an internship might want to consider looking elsewhere.

In Omaha, San Jose, El Paso, and Milwaukee, more than 70% of interns get compensated for their work, according to a new report by Looksharp, a company that matches students and recent graduates with internships.

The survey found that across America, 53% percent of college seniors were paid during their most-recent internship, up slightly from 48% percent last year. The cities where more than half of interns are unpaid included New York, Los Angeles, Baltimore, Miami, Sacramento, San Diego, Tucson, and Washington, D.C.

As for the best cities, where the highest proportion of student interns got paid? Here’s the top 10:

1. Omaha, Neb. (81.1%)
2. San Jose, Calif. (74.1%)
3. El Paso, Texas (72.8%)
4. Milwaukee, Wisc.(70.1%)
5. Houston, Texas (69.1%)
6. Denver, Colo. (68.1%)
7. Indianapolis, Ind. (67.9%)
8. Oklahoma City, Okla. (67.0%)
9. Dallas, Texas (65.6%)
10. Jacksonville, Fla. (65.4%)

Unfortunately, the group above does not match up with the list of top cities in which college and graduate students said they wanted to work:

1. New York City, N.Y. (24.5%)
2. Los Angeles, Calif. (15.0%)
3. San Francisco, Calif. (11.5%)
4. Chicago, Ill. (5.6%)
5. Washington, D.C. (4.9%)
6. Boston, Mass. (4.4%)
7. San Diego, Calif. (4.0%)
8. Seattle, Wash. (3.3%)
9. Denver, Colo. (2.3%)
10. Atlanta, Ga. (2.3%)

Perhaps unsurprisingly, among students working in creative fields—like film, fashion, music, and journalism—fewer than a third get paid for internships. On the other hand, there’s good news in the report for engineering students. The industries most likely to pay student interns include:

1. Transportation (87.5%)
2. Manufacturing (84.2%)
3. Oil/gas/utilities (84.1%)
4. Construction (81.0%)
5. Hardware/Software (79.6%)
6. Banks/financial institutions (78.9%)
7. Services companies (73.3%)
8. Retail trade (70.0%)
9. Consulting/professional services (68.0%)
10. Agriculture (63.1%)

Also noteworthy: The well-known wage gap between men and women was mirrored in the Looksharp findings. While 63% of male interns were paid, only 45% of female students were compensated. Moreover, when students were asked to describe what they thought would be a fair hourly wage, men said $14.37, on average, while women said $12.01. That’s one indication that female students should start learning early on how to ask for fair pay in their field.

For those young people who are still looking for an internship this summer—whether paid or unpaid—there is some good news: There are several steps you can take right now to make sure you land a gig that will look great on your resume.

Read More: Here’s Why the Summer Job is Disappearing

MONEY groceries

Whole Foods Is Accused of Overcharging Customers Again

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Bloomberg—Bloomberg via Getty Images

New York investigators say it's the "worst case" they've ever seen.

Turns out there might be a reason Whole Foods is not America’s favorite grocery store.

New York City investigators have launched a probe of the chain after finding that local stores have regularly overcharged shoppers over the last five years, according to a report by the Daily News.

The investigation comes just a year after Whole Foods had to pay an $800,000 settlement in California because inspectors found the chain caused customers to overpay for food that was priced by weight.

In New York, consumer protection agents say they found violations that included inaccurate weight labels on pre-packaged food and adding tax to non-taxable items.

“Our inspectors told me it was the worst case of overcharges that they’ve ever seen,” New York City Department of Consumer Affairs Commissioner Julie Menin told the News.

A spokesman told the News the chain never intentionally mispriced items, and other industry representatives have pointed out that mislabeling is often the fault of manufacturers packaging foods—not grocers. And the News also found that mislabeling sometimes actually works in a customer’s favor.

One takeaway?

It’s a good idea to check food weights using grocery store scales, even on pre-packaged items.

It also pays to compare prices for your favorite foods at different chains: MarketWatch has found that items like hummus can be less expensive at Whole Foods, while many others like produce and cheese are cheapest at competitors like Trader Joe’s, Target, and Safeway.

Finally, if you’re a Whole Foods die-hard, shop smart; the best sales are apparently on Wednesdays.

Read More: Here’s How to Save Hundreds on Groceries

 

MONEY pay TV

Hulu Subscribers Just Got a New Perk

Lizzy Caplan as Virginia Johnson and Michael Sheen as Dr. William Masters in Masters of Sex (season 3, episode 1) on Showtime
Michael Desmond—Showtime A scene from Showtime's "Masters of Sex"

If you already pay for Hulu, you can now get cheaper access to certain cable shows.

Streaming media provider Hulu has just announced a new deal that will allow current subscribers to get a discount on Showtime’s new standalone service.

The offer shaves $24 off the annual price of Showtime’s platform, an HBO Now-like service that will serve as an alternative for viewers who want access to the network’s popular shows—like Masters of Sex, Nurse Jackie, and Homeland—without paying for a cable package.

The service, which you can try out free for 30 days, normally costs $11 per month, but Hulu Plus subscribers can get it for $9. All told, a Hulu and Showtime subscription together would cost a little more than $200 per year.

If you don’t find Hulu’s offerings to be generally worth paying for (say, because you use rabbit ear antennas to watch network TV for free), but you do want to be able to watch cable shows and movies, check out our guide to choosing the perfect combination of streaming services—and never paying a cable bill.

MONEY Sports

Patriots’ Rob Gronkowski Hasn’t Spent a Dime of His NFL Salary

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Kevin C. Cox—Getty Images Rob Gronkowski of the New England Patriots celebrates after Super Bowl XLIX on February 1, 2015.

Gronk claims he has not spent "one dime" of his $10 million in contract money.

New England Patriots tight end Rob Gronkowski has been saving like a pro during his five seasons in the National Football League—at least according to his new book, It’s Good to Be Gronk.

The football star claims he has been spending only his endorsement money, not his NFL salary, and avoids making big-ticket purchases.

“To this day, I still haven’t touched one dime of my signing bonus or NFL contract money. I live off my marketing money and haven’t blown it on any big-money expensive cars, expensive jewelry or tattoos and still wear my favorite pair of jeans from high school,” Gronkowski writes in an excerpt of the book published Monday on Sports Illustrated‘s MMQB blog.

If that’s true, he’s likely amassed at least $10 million (or more, if he’s been investing his savings). Given that a disproportionately high number of NFL players blow through their money and end up filing for bankruptcy, it seems that Gronk is a rare role model among his peers.

Well, at least when it comes to money.

MONEY Jobs

Here’s Why the Summer Job is Disappearing

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PeopleImages.com—Getty Images

Teens today are half as likely to have summer gigs compared to the 1970s.

A new Pew report finds that employment for 16 to 19-year-olds has been on a steady decline over the last couple of decades, with fewer than a third of teenagers working a summer job last year.

Between 1950 and 1990, employment of U.S. teens generally rose and fell with the economy. But ever since the recession in 1991, young people have had a harder and harder time getting jobs—even during periods of recovery.

Last summer, less than 32% of teens were employed between June and August, compared to 58% in 1978. The current rate is barely higher than the all-time low of about 30% in 2010 and 2011.

fewer teens have summer jobs

One reason for this steady drop in employment, the Pew report suggests, is a declining number of entry-level jobs, as well as an increase in pressure on young people to take unpaid internships rather than waitressing or lifeguarding gigs. Many of these problems aren’t limited to Americans, as younger workers across the world are facing much tougher labor markets than in years past.

Pew researchers also found that teen employment differed across racial groups. White teenagers in the U.S. were more likely to work summer jobs last year, with employment at 34% for white 16 to 19-year-olds—versus 19% for black teens, 23% for Asian teens, and 25% for Hispanic teens.

White Teens Most Likely to be Employed, Especially During the Summer

Read next: These 5 Industries Are Hiring Like Crazy Right Now

MONEY sharing economy

Airbnb Says Renting Your Place Is Like Getting a Big Raise

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Steve Lewis Stock—Getty Images

A new company report claims being a host nets you about $7,500 a year.

Airbnb is busting out big guns in its latest PR move. The lodging rental business has hired former White House National Economic Advisor Gene Sperling (now a consultant) to report on the impact of Airbnb-style home sharing on middle class incomes.

Unsurprisingly, Sperling’s new report comes to sunny conclusions: He claims “the typical single-property host makes an extra $7,530 annually” by renting his or her primary residence for about two or three months each year—the equivalent of a 14% raise for a household that pulls in the median income of $52,800 a year.

The paper—which surveys Airbnb earnings in New York, Boston, San Francisco, Los Angeles, and Portland, Oregon—goes on to say that the extra cash earned via Airbnb can help offset the fall in real income for middle class Americans over the past 15 years.

Of course, not everyone might see Airbnb as a boon to the middle class. For example, some long-term tenants claim they’ve been evicted by landlords looking to profit from more lucrative short-term rentals.

And New York’s state attorney general has claimed that about 70% of Airbnb’s New York City listings are illegal, with most of the money going to landlords who are essentially operating unregulated hotels. That could mean lost tax revenue—and higher rents and housing costs for the city as a whole.

Even the statistics in the Airbnb report suggest the site’s customer base is not overwhelmingly middle class: 45% of Boston Airbnb hosts reported household incomes of more than $100,000 in 2013.

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