TIME Personal Finance

Knowing Your Net Worth Can Help You Plan

Calculating your net value will help you plan your future more productively.
Calculating your net value will help you plan your future more productively. David Emmite—Getty Images

Calculating your net worth is easy, and a valuable exercise. Here's how.

Your boss doesn’t know your value, right? But do you even know it? Most people have never taken the time to figure their net worth even though it’s a fairly simple calculation. Why not take stock now? The New Year is still full of promise.

Your net worth is what you’d have left after selling everything, paying the bills and settling all debts. Think of it as your liquidation value. The number is of keen interest to heirs trying to understand what will be theirs. But it’s useful for you as well. Calculated annually, your net worth provides the clearest picture of whether you are getting ahead. It helps gauge when you might retire and gives a roadmap to where you are losing or gaining value. That makes it easier to adjust and meet your goals.

Say, for example, your goal is to retire with $1 million. But during the worst two years of the recession your net worth—your total liquid value—went from $380,000 to $250,000. You’d understand right away that you need to adjust. Net worth hits home in a more visceral way than, say, looking only at a 401(k) statement that provides only part of the picture.

To figure your net worth you need two sheets of paper, one of them labeled assets and the other labeled liabilities. You want to add all assets and subtract all liabilities, reducing your life thus far to a single number. You can find online calculators to help. You can also see how you stack up against people your age and at your income level. For example, the median 55-year-old has a net worth of $180,125; the median net worth of households earning $75,000 a year is $301,475, according to Nielsen Claritas.

Start with assets, including retirement savings, checking and savings account balances, bonds or annuities, the total value of any stock holdings, your home and automobiles. To really fine-tune the figure include artwork, jewelry, furniture and other possessions that for most people do not move the needle a great deal. Put a value on each of these things and add them.

On the liabilities sheet, list all credit card balances, personal loans, student loans, auto loans and mortgages. Then add those and subtract it from the figure you got on the assets sheet. Voila. You now know what you are worth on paper. Watching this number from year to year shows how new debts and all spending subtract from your net worth, while general thrift, retired debts, and investments that rise pad your net worth.

The figure is not perfect. Figuring your net worth is especially difficult if you own a small business, which may be difficult to value. If you are young and in a great career your net worth might be negative—but that’s okay. Once those college loans are paid off and you get a few raises that can turn around quickly. Likewise, if your net worth takes a dip because the stock market or housing market fell, that’s not so terrible assuming you can hold on for the recovery. But it’s always good to know where you stand.

TIME Banking

This Plan Could Save the Post Office From Extinction

Incorporating financial services could be the post office's saving grace.
Incorporating financial services could be the post office's saving grace. J. Scott Applewhite—AP

Go to the post office, send a package, pick up some stamps and deposit your paycheck or pay a bill? That’s the newest idea for rescuing the cash-strapped USPS floated in a report published by the U.S.P.S. Office of Inspector General. (more…)


New Guilty Verdict Could Be Bad News For SAC Capital’s Steven Cohen

Former SAC Capital Advisors LP Portfolio Manager Mathew Martoma Found Guilty On Insider Trading Charges
Mathew Martoma, center, a former portfolio manager with SAC Capital Advisors LP, exits federal court in New York, U.S. following the jury's verdict, on Thursday, Feb. 6, 2014. Louis Lanzano / Bloomberg via Getty Images

Former hedge fund manager Mathew Martoma faces 45 years in prison on charges of insider trading.

There’s nothing like the prospect of prison time to make one reconsider one’s choices.

In the wake of the guilty verdict Thursday in the insider trading case against former hedge fund manager Mathew Martoma, prosecutors will certainly make another attempt to “flip” him–he is the most likely source of evidence, if any exists, of wrongdoing by Steven Cohen, the founder of the beleaguered SAC Capital Advisors. But for Martoma, who has never claimed to have any evidence against Cohen, it may be too late to make a deal to stay out of jail.

Martoma and Cohen had a 20-minute phone conversation on Sunday July 20, 2008 the morning after Martoma had a lengthy meeting with a doctor consulting a drug company on clinical testing of an Alzheimer’s drug. The day after Martoma’s call with Cohen, SAC began getting out of $700 million of investments affected by the outcome of the trials.

Trial results on the drug were announced on July 29, 2008 and SAC earned $276 million in profits and avoided losses thanks to their trades in the preceding days. SAC pleaded guilty in November to insider trading charges. Cohen has denied any wrongdoing, and prosecutors have not brought any criminal charges against him.

Martoma has reportedly declined to cooperate with the government in the case, to the mystification of members of the white collar bar and prosecutors.

The problem for Martoma is that the value of his testimony in any future case has diminished over the course of his trial. The convictions on two counts of securities fraud and one of conspiracy cast doubt on Martoma’s credibility. And on the eve of his trial it emerged that he had been expelled form Harvard Law School for falsifying his transcript when he applied for a clerkship with a federal judge.

Still, at 39-years-old, Martoma may be eager to do what he can to pare down the potential 45-year maximum sentence that comes with his conviction on the three counts.

TIME Media

The One (and Most Important) Way HBO Dominates Netflix


HBO to Netflix: Come at me, brah

Netflix has famously claimed that it wants to “become HBO faster than HBO can become us.” But his company has a long way to go to reach HBO’s fat profit margins, which were revealed for the first time by parent company Time Warner in an earnings report Wednesday (TIME is also owned by Time Warner.)

The media giant announced that its HBO division, which includes the eponymous flagship channel and Cinemax, generated $4.9 billion in revenue in 2013, a 4 percent increase from the year before. The division had an operating income of nearly $1.7 billion for the year, up 8 percent from the year before. The two channels combined added 2 million U.S. subscribers in 2013, Time Warner CEO Jeff Bewkes said in an earnings call with investors. It was the largest growth figure in 17 years. “HBO remains in a league of its own,” Bewkes said, noting that Netflix had no discernible negative impact on the company’s business.

Netflix has almost managed to catch up to HBO in sales, generating almost $4.4 billion in revenue in 2013. But the company is well behind in operating income, earning $228 million for the year. Netflix incurs huge costs for maintaining its online streaming infrastructure, spending $379 million on technology and development in 2013. HBO doesn’t have to worry about that since it’s mostly distributed by cable companies. The streaming service also has to go it alone on marketing costs ($503 million last year), while HBO is heavily promoted by pay-TV providers in bundle deals.

(MORE: Netflix Mulls Price Tiering as Subscriber Numbers Soar)

Netflix’s greatest advantage is that it’s growing at a much faster clip. The company added 6.2 million U.S. subscribers in 2013, compared to HBO’s 2 million, and its revenue leapt 21 percent, compared to HBO’s 4 percent jump. Netflix has aims to expand dramatically abroad in 2014 and is likely eyeing large markets like France and Germany. Creating a larger international footprint could help it inch closer to HBO’s total global subscriber base, which dwarfs Netflix’s at about 130 million (Netflix has 44 million global customers).

The disclosure of the HBO figures is the latest move by Time Warner to dispute the narrative that its premium cable channel is being eclipsed by Netflix. Last month HBO threw cold water on an NPD study claiming that U.S. subscriptions to premium TV channels were declining. And the company is experimenting with new payment models that would allow subscribers to pay for HBO along with an Internet package without buying a pricey cable subscription.

TIME White Collar Crime

‘Guilty’ Verdict in Biggest U.S. Insider Trading Case

Former SAC Capital portfolio manager Mathew Martoma (C) arrives at the Manhattan Federal Courthouse with his lawyer in New York, January 7, 2014. Martoma is charged with using confidential information provided by two doctors involved in clinical trial to trade in drug companies Elan Corp Plc and Wyeth, which is now owned by Pfizer Inc.
Former SAC Capital portfolio manager Mathew Martoma (C) arrives at the Manhattan Federal Courthouse with his lawyer in New York, January 7, 2014. Martoma is charged with using confidential information provided by two doctors involved in clinical trial to trade in drug companies Elan Corp Plc and Wyeth, which is now owned by Pfizer Inc. Brendan McDermid—Reuters

Former SAC Capital trader Mathew Martoma becomes the 79th person convicted as part of a sweeping Wall Street insider trading crackdown

Mathew Martoma, the former hedge fund trader charged with what federal prosecutors called the most lucrative insider trading scheme in U.S. history, was found guilty on Thursday. Martoma, who once earned millions of dollars working for Steven A. Cohen’s hedge fund SAC Capital, faces decades in prison, but will likely serve less than that.

The guilty verdict, which was delivered by a 12-member jury in a federal court in lower Manhattan, is the latest blow for SAC Capital, which last fall pleaded guilty to fraud charges and agreed to pay a $1.8 billion in the largest insider trading fine in U.S. history. As part of a settlement with the government, SAC agreed to shut down its investment advisory business and turn itself into a so-called “family office” to manage Cohen’s multibillion-dollar wealth.

Martoma, 39, was charged with trading illegally on inside information he obtained from doctors involved in a 2008 pharmaceutical trial for an Alzheimer’s drug. Martoma’s trades allowed SAC to make gains and avoid losses of $276 million. In court proceeding over the last several weeks, prosecutors said that Martoma “corrupted” two doctors involved in the drug trial in order to obtain advance notice of its results. After the verdict, Richard Strassberg, Martoma’s lawyer, said, “We’re very disappointed and we plan to appeal.”

(MORE: Inside the Biggest Insider Trading Case in American History)

Martoma was found guilty of two counts of securities fraud and one count of conspiracy to commit securities fraud. Each fraud count carries a maximum penalty of 20 years in prison; the conspiracy charge carries a maximum sentence of five years. Experts believe Martoma could ultimately be sentenced to seven to ten years behind bars. In bringing the case, Bharara said the alleged insider trading occurred “on a scale that has no historical precedent.” Martoma becomes the 79th person convicted as part of Bharara’s sweeping crackdown on insider trading on Wall Street. Bharara’s office has not lost a single case.

“Martoma bought the answer sheet before the exam — more than once — netting a quarter billion dollars in profits and losses avoided for SAC, as well as a $9 million bonus for him,” Bharara said in a statement. “In the short run, cheating may have been profitable for Martoma, but in the end, it made him a convicted felon, and likely will result in the forfeiture of his illegal windfall and the loss of his liberty.”

When the FBI showed Martoma’s multimillion-dollar Florida mansion in late 2011, the trader fainted on his front lawn. Prosecutors had hoped to discuss Martoma’s fainting spell during the trial, arguing that it constituted “evidence of his consciousness of guilt.” But U.S. District Judge Paul Gardephe denied that request, saying that “when an individual who works in the hedge fund industry is approached by the FBI and is accused of having engaged in insider trading in specific stocks and while employed at a specific company, it is likely to be a shocking and highly disturbing event, whether the person is innocent or guilty.”

Federal prosecutors were successful in their attempt to unseal documents related to Martoma’s 1999 expulsion from Harvard Law School for fabricating his academic transcript and then trying to cover his tracks by concocting “evidence” from a phony computer forensics firm. After his expulsion, Martoma changed his name, which previously had been Ajai Mathew Mariamdani Thomas, to Matthew Martoma. He later applied to, and was accepted by, Stanford Business School, where he earned an MBA.

(MORE: Here’s Why Former SAC Trader Martoma Was Booted From Harvard)

Federal authorities have been investigating SAC for a decade — rumors of insider trading have been swirling around the firm for years — and have secured guilty pleas or convictions from eight of its former employees. Cohen, who remains under investigation by the FBI, has not been charged with a crime — and has maintained that he acted appropriately at all times — but he does face civil charges alleging that he failed to supervise Martoma and another SAC trader who was convicted of insider trading last December.

Cohen is a legendary Wall Street figure who amassed a $9 billion fortune while building a reputation as one of the most successful hedge fund traders of his generation. For years, SAC Capital consistently delivered astounding returns of 30% or more to its clients. During one seven-year stretch, SAC only had two losing months. Thanks to SAC’s trading success, Cohen amassed a fortune that enabled him to purchase a 35,000 square-foot Connecticut mansion filled with hundreds of million of dollars worth of art and a 6,700-square-foot ice skating rink.

Last year, SAC was charged with securities and wire fraud for a decade-long scheme in which the fund engaged in a pattern of “systematic insider trading” that allowed it to reap hundreds of millions of dollars in illegal profits. Federal prosecutors said Cohen’s firm displayed “an institutional indifference” to unlawful conduct that “resulted in insider trading that was substantial, pervasive and on a scale without known precedent in the hedge fund industry.”

Bharara’s investigation into insider trading in the hedge-fund industry has already led to the convictions of former Galleon Group founder Raj Rajaratnam and former Goldman Sachs director and McKinsey managing director Rajat Gupta. Rajaratnam is currently serving an 11-year prison sentence, and last year Gupta was sentenced to two years in prison. Bharara says the U.S. Wall Street insider trading investigation is ongoing.

TIME Food and Beverage Industry

Who Really Owns Your Craft Beer?

Seemingly independent, craft beers are actually owned by large corporations.
Getty Images

Based on their labels, and even by the long histories detailed on their websites, you’d never know some seemingly independent, seemingly craft beers are owned by gigantic corporations.

Thanks to rounds of industry buyouts, combined with marketing that’s been declared by beer enthusiasts as misleading—or “crafty”—it’s sometimes difficult to tell which beer brands are truly the indie craft operations they present themselves to be. Here are a few examples:

Blue Point. The company’s story began in Long Island more than ten years ago, when a pair of home-brewing enthusiasts decided to open a microbrewery—reportedly Long Island’s first. The timing coincided with the rapid expansion of craft brewing around the country, and eventually the Blue Point Brewing Company worked its way to be among the top 50 American craft brewers by sales volume. Blue Point’s official status as a craft beer ended this week, however, when it was purchased by Anheuser-Busch InBev, the world’s largest beer company.

Blue Moon. The largest of the so-called “crafty beers,” which are marketed as their own indie labels yet are produced by industry giants, Blue Moon is owned by MillerCoors. While the MillerCoors site acknowledges this is the case, Blue Moon’s “Our Story” page skips over the corporate parentage issue.

(MORE: That Craft Beer You’re Drinking Isn’t Craft Beer. Do You Care?)

Boulevard. Based in Kansas City, Boulevard ranked as the nation’s 12th largest craft brewer before it was bought by the Belgian brewer Duvel last fall.

Goose Island. “Goose Island is a craft beer, period,” Goose Islander founder John Hall told me last summer. According to the Brewers Association’s definition, however, Goose Island’s qualification as a craft product ended in 2011, when the popular Chicago-based brewer was purchased by Anheuser-Busch. One of the association’s requirements to be in the craft category, you see, is independent ownership.

Leinenkugel. The brew with the name often mistaken as an import is another MillerCoors offering listed under the company’s “Craft” section. The others are Blue Moon (see above), Batch 19, Crispin Original Cider, Henry Weinhard’s Private Reserve, and Killian’s Irish Red.

Redhook. Despite its prominent spot in the Craft Brew Alliance, which also includes the Widmer Brothers, Kona Brewing, and Omission brands, Redhook is not considered a craft brewer by the Brewers Association because one-third of the company is owned by Anheuser-Busch InBev.

(MORE: In the Craft Beer World, a Pecking Order Emerges)

Shock Top. The fact that it’s brewed in St. Louis is the only hint that Shock Top is owned by another brewer that was born in the city and has since fallen into the hands of foreign owners: Anheuser Busch. So like Blue Moon, Shock Top is considered in the beer community as a faux-craft “crafty” beer, rather than the genuine article.

TIME twitter

Twitter’s User Growth Is Slowing Because It’s Not Great for Conversations

Traders get to work during Twitter Inc.'s IPO on the floor of the New York Stock Exchange in New York Nov. 7, 2013.
Traders get to work during Twitter Inc.'s IPO on the floor of the New York Stock Exchange in New York Nov. 7, 2013. Brendan McDermid—Reuters

The company has strayed too far from its roots as a group messaging app

Twitter’s stock took a tumble Thursday after news the company’s user growth slowed last quarter, adding only 9 million new people in the last quarter of 2013. That’s the company’s slowest growth period since 2010, while its biggest competitor, Facebook, already has five times Twitter’s user numbers and is continuing to grow consistently year-over-year.

Why the drop-off in users? Twitter’s well-documented high barrier to entry is certainly a big reason for that. It’s just too difficult for some newbies to learn how to use the platform, pick accounts to follow and get the hang of the customs and inside jokes with which hardcore users are familiar. On Wednesday’s earnings call, Twitter CEO Dick Costolo acknowledged its difficulty problem and said the company’s working on improvements that’ll roll out this year.

But there’s another, more ironic factor at play here, too. When Twitter was first born as “twttr,” it was designed as a hack around SMS-based group text messaging: Early twttr users could send a text message to a single number and it would be automatically broadcast via SMS (Short Messaging Service — basically, text messages) to all the twttr users who were following the sender. While Twitter users can still tweet via text message, the platform has grown exponentially more complex than that to the point where many people don’t even consider that original use case a valid way to use the site anymore.

And therein lies the problem: People still want simple, cross-platform group messaging that ducks the cost of sending international SMS messages, as evidenced by group messaging app WhatsApp’s skyrocketing growth over the past year or so. Cellphone operating system designers are, to the frustration of many users, fans of walling their messaging systems off from rivals: Apple’s got iMessage, Android has Google Hangouts and BlackBerry has BBM. Ever try to have a group chat when some people have iPhones and others are on Android? It’s not a very easy proposition but one solved by cross-platform apps like WhatsApp.

Twitter, though, could’ve been that app, if it only stuck closer to its group-communication roots while it evolved over the last several years. Twitter still has a chance of reclaiming some of that territory — Costolo promised better direct messaging and other changes in the coming months to compete with WhatsApp, Snapchat and other messaging apps. But in the eyes of many, Twitter’s only useful for celebrities, companies and public figures with something interesting to say publicly — it’ll be an uphill climb to escape that stigma and start claiming new users who just want to Chat With Friends.

TIME Travel

Tourists Give Theme Parks Good Reason to Keep Jacking Up Prices

Tourists will be shelling out more money in order to go to theme parks such as Universal Studios and Walt Disney World.
Martin Hospach—Getty Images

There may come a day when theme park companies see a backlash among vacationers, who refuse to pay ever-high admissions prices. But that day hasn’t come yet. (more…)

TIME Scams

The 10 Weirdest Things Thieves Love to Steal

Thieves won't always steal the possessions you would expect.
Thieves won't always steal the possessions you would expect. Pierre Wayser—Getty Images/Flickr Select

Today in 'wtf crime'

This post is in partnership with 24/7 Wall Street. The article below was originally published on 247wallst.com.

Cars, smartphones, jewelry and cash are among the many valuable items most people expect thieves to target. As a result, Americans take precautions to keep such possessions safe. Not many, however, would think to lock up their Nutella, pregnancy tests or Tide laundry detergent. Yet, these everyday, ordinary household products are among the most commonly stolen goods.

Some stolen items seem unusual because their value is not easily visible. For example, thieves steal catalytic converters for the platinum. Frank Scafidi of the National Insurance Crime Bureau (NICB) gave the example of manhole covers, as well as a variety of other metal objects, that are often stolen to be resold as scrap metal. Incidents of these kinds of theft have risen considerably, likely due to the rising price of metals like copper, and platinum.

Similarly, the production of maple syrup relies heavily on weather patterns. With poor sugaring conditions in recent years, the price of sap and maple syrup have risen considerably, increasing the potential reward for thieves targeting the product. Another grocery item, steak, has also become more vulnerable to shoplifting due to rising prices.

Another explanation for unusual incidents of theft is unmet demand. In the case of shrubbery theft, for example, collectors are willing to pay large sums for rare and valuable plants –even illegally. Nutella, which is relatively expensive and in high demand, is a commonly stolen product, according to the National Retail Federation (NRF).

According to Rich Mellor, senior advisor at the National Retail Federation (NRF), the “easiest thing to steal is getting stolen, not necessarily for its desirability.” So, while intrinsic value and price increases are important factors, a thief ultimately wants to avoid getting caught.

24/7 Wall St. consulted the National Retail Federation and the National Insurance Crime Bureau to identify a variety of commonly stolen objects. We also reviewed various news sources to identify 10 of the strangest things thieves steal.

Here are the 10 weirdest things thieves steal.

1. Laundry detergent

Procter & Gamble and Arm & Hammer are not the only ones to discover the value in laundry detergent. Thieves have too. This relatively expensive everyday household product is found in nearly every home, which can partly explain its appeal as a stolen good. Consistent demand makes a product much easier to sell. In particular, Tide — a recognized, easy to spot brand — is traded on a regular basis for drugs, other illicit items, and sometimes right back to stores looking for better profit margins. Additionally, the lack of serial numbers on the packaging makes detergents very difficult to track.

2. Allergy medicine

Among organized retail crime gangs allergy medicines in particular have become quite popular, according to a 2013 crime survey conducted by the NRF. Part of the value of allergy medications may be the consistently high demand for the product, as many people suffer from allergies. According to Rich Muller at the NRF, however, people are often more willing to suffer through allergy symptoms than buy antihistamines. As a result, a cheaper, boosted product has more success among consumers. While recreational use of antihistamines could be another explanation, stolen allergy medicines are re-sold primarily for intended use.

3. Pregnancy tests

Pregnancy tests were among the most shoplifted items last year, according to the NRF. Younger thieves may lift pregnancy tests to avoid embarrassment. According to the NRF, however, the tests are targeted by organized crime groups for their resale value. Like detergent, demand for this product is so consistent that they can be sold for near-retail prices.

4. Catalytic converters

Among the base metals popular at scrap yards are platinum, rhodium and palladium, all of which can be components in catalytic converters. The price of these metals has risen considerably in recent years, which may partly explain the rise in catalytic converter theft. Platinum prices, for example, have risen substantially, from around $1,000 per ounce five years ago to just under $1,400 per ounce this month. Catalytic converter theft has become so widespread in places like California, that the state passed laws that mandate documentation of the car part’s sales. According to Frank Scafidi of the NICB, however, there is only so much legislation can do without proper enforcement. Recyclers can easily recognize when they are dealing with criminals, but have little incentive to turn them away.

5. Manhole covers

Weighing more than 300 pounds in some cases, and typically located on lit and visible streets, manhole covers do not seem like a worthwhile steal at first. But in the last few years, as base metal prices have risen, so have thefts of manhole covers. Thieves have been known to disguise themselves as construction workers and make off with the large discs single-handedly. In countries such as Colombia, where stealing manhole covers has become quite common, thieves have customized trucks with holes in the floors to steal the covers more discreetly. In addition to the costs incurred by utilities and municipalities from these thefts, missing manhole covers cause considerable danger to the public. Relatively high prices for base metals such as iron have encouraged thieves to commit a variety of other unusual crimes, including the theft of fire hydrant caps, gravesite vases, and stadium bleachers, likely to be sold for scrap. Manhole covers are typically made of iron, while many other valued items contain copper, also coveted among thieves, as its price has roughly doubled since 2009. The metal is essential in plumbing, electrical systems, and fiber optics.

For the rest of the list, click here.

Read more from 24/7 Wall Street:
Ten Brands That Will Disappear in 2014
Five Unusual Alternatives to Investing in Gold
America’s Least Healthy States


Early Unemployment Data Lifts Hope for Job Growth

Prospective job applicants wait in line to learn about job openings at the Kentucky Kingdom Amusement Park during a job fair at the nearby Crowne Plaza Hotel in Louisville, Ky., Jan. 4, 2013.
Prospective job applicants wait in line to learn about job openings at the Kentucky Kingdom Amusement Park during a job fair at the nearby Crowne Plaza Hotel in Louisville, Ky., Jan. 4, 2013. Luke Sharett —Bloomberg/Getty Images

Fewer unemployment claims than expected

The number of newly-unemployed workers seeking unemployment benefits fell last week by 20,000 to a seasonally-adjusted 331,000, the Labor Department said Thursday. That was below economists’ expectations of 335,000 and lifted hopes that Friday’s jobs report will show strong growth.

Last month’s job’s report was disappointing, showing that the economy added just 74,000 jobs in December. Employment data, however, can be highly volatile, and many economists predict that last month’s numbers will be revised upwards as other economic data—like GDP growth figures—point to a stronger economy.

“The sharp slowing in payrolls in the December employment report was not due to a weaker trend,” Jim O’Sullivan, Chief U.S. Economist at Hi Frequency Economics, wrote in a note to clients Thursday morning. O’Sullivan predicted Friday’s jobs report will show the economy added a healthy 220,000 new jobs in January.

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