MONEY Leisure

WATCH: George Takei Talks Marriage, Money, and the Right Way to Pronounce His Name

Actor George Takei tells Money's George Mannes how he handles his finances — and how he's fighting rising ticket prices on Broadway.

MONEY Careers

Work for the Man? That’s So Over, New College Grads Say

With banks dissing them and peers largely underemployed, Millennials are finding an alternative financial future.

Big companies still have many high-paying positions, and with the job market perking up those opportunities will expand. But young adults are still having trouble establishing basic financial security—or landing a decently paying entry-level job. Instead, they are forging different paths to financial success.

This search for alternatives starts with checking and saving. Banks haven’t figured out how to serve this new generation. Millennials have big debts from college, and instead of a single, steady full-time job, a recent grad may have four or five paying gigs. Banks can’t fit them into an existing box. But this new generation still needs credit and banking services.

Faced with this inflexibility, one third of Millennials seek to cut ties with traditional banks and financial companies, according to market researchers. Half say they are counting on start-up firms to overhaul how banks work, and 75% say they would prefer financial services from the likes of Google, Amazon, and PayPal. They are also turning to alternative financial firms like Square, Betterment, Robinhood, and Wealthfront to manage their payments and manage their money.

In their search for financial options, young adults are also finding new ways to launch their careers. Millennials have seen under-saved Boomers delay retirement, while corporations have shed workers and their peers are settling for jobs below their ability. As a solution, more twentysomethings are turning to entrepreneurship. Six in 10 recent college graduates are interested in starting a company, according to a new survey by CT Corp., a small business services firm. Those results mirror similar findings by other polls.

Entrepreneurial pursuits offer the potential to put individuals squarely in charge of their future. This is the mindset that the Thiel Foundation capitalizes on with its 20-under-20 fellowship, which seeks to develop entrepreneurs right out of high school and convince them they don’t need college or the student debt that comes with it.

The problem is that while many recent college graduates say they want to be their own boss, a large portion doesn’t really understand what that entails. So while 61% say they’d like to start a company, only 45% believe it’s feasible, CT found. Meanwhile, 67% display a knowledge gap around practical aspects like incorporating, registering a business name, securing a domain, and marketing their products or services.

Still, the entrepreneurial spirit runs deep in this crowd. One in five recent grads started a business while in college, and even among those who don’t believe they’ll ever start a company a third dream about doing so. More than half believe that being their own boss offers greater rewards and more financial security over the long run. Let’s hope they are right because in the new normal this is the path often taken.

TIME States

Colorado’s New Pot Banking Law Won’t Solve Cash Problems

Over 400 Marijuana Stores Ordered To Close As City Regulates Industry
Tim Blakeley, manager of Sunset Junction medical marijuana dispensary, shows marijuana plant buds on May 11, 2010 in Los Angeles, California. Kevork Djansezian—Getty Images

A new law signed by the governor offers a symbolic fix to a serious problem

Colorado Gov. John Hickenlooper signed a bill Friday designed to create the world’s first state-level banking system for legal cannabis companies, which have complained that their lack of access to basic banking services creates difficult and dangerous risks.

But the financial industry quickly cast doubt on whether the legislation will address issues faced by marijuana businesses in the state, where recreational pot became legal this year. Asked what it would accomplish, Colorado Bankers Association CEO Don Childears said: “Basically, absolutely nothing.”

“We don’t think it can be effective, and it can never get off the ground,” he said.

The bill allows legal marijuana shops to create a makeshift financial network that would help them gain access to credit and merchant services. A lack of access to banking has been the single biggest problem for Colorado’s recreational weed merchants, which have been legally operating in the state since Jan. 1. Forced to operate million-dollar businesses in cash, marijuana companies run the risk of robbery and face myriad logistical difficulties.

The problem with the bill is that it does nothing to change the reality that blocked pot shops from banks in the first place. Marijuana, which is classified as a Schedule I drug, remains illegal under federal law. As a result, financial institutions are wary of taking on cannabis companies as clients, even in states where some form of the drug is legal.

The legislation signed Friday allows pot businesses to petition the Federal Reserve for clearance. But even industry advocates acknowledge that the chances of obtaining a green light are slim. “It’s probably not going to work, but we’re trying,” said Mike Elliott, executive director of the Medical Marijuana Industry Group.

The point of the effort is simply to demonstrate that. The industry believes that the banking conundrum can only be solved in Washington—either by Congressional action, or by rescheduling marijuana as more and more states adopt permissive laws. The law signed Friday is an effort to show federal authorities whom Colorado officials have been petitioning for a solution that the state has done everything it can to resolve the issue.

“I don’t see anything coming out of it; it’s more symbolic than anything,” said Elan Nelson, who works in business development for Medicine Man, a legal retail shop in north Denver. “I think this starts the conversation. And if, for some reason, it works—great. We need this desperately.”

MONEY fees

No More ATM Fees? Sign Us Up!

Pile of money
B.A.E. Inc.—Alamy

FreeATM, which allows customers to watch a quick ad in lieu of paying the usual annoying $2 or $3 ATM fee, has big plans to expand, starting this summer.

Consumers run into plenty of tacked-on charges in today’s world—hello airline baggage fees!—but the ATM fee, small as it is, is up near the top in terms of generating aggravation. There’s just something patently absurd and beyond annoying about paying money to get your money.

According to a survey conducted on the behalf of TD Bank last summer, nonbank ATM fees were given the nod as the most frustrating bank fees, named by 38% of those polled. (Overdraft fees, which cost far more than the $2 or $3 charged by ATMs, came in second, with 27%.) In a previous survey, 77% of consumers said it is not OK for banks to charge ATM fees, and the majority of consumers said that a fair fee for using an ATM is … $0.

That’s just the amount consumers will incur when they an ATM service that plans on expanding rapidly throughout the country soon. First introduced in 2011 with a single ATM in New York City, the company—appropriately called FreeATM—announced that after the latest round of raising money from investors, it has plans for surcharge-free ATMs to open in 20 New York neighborhoods on the same (yet to be determined) day in August 2014.

In lieu of a fee for using an out-of-network ATM, customers will be shown a 15- to 20-second targeted ad on a screen, and then be able to use the machine fee-free. It doesn’t matter if your card is prepaid or a regular bank debit card; FreeATM won’t add a fee. (While the machine won’t charge you a fee, the bank or other service that issued the card might tack on its own fee, so watch out.) The plan is for around 250 ATMs in the New York metro area to start using the platform within a year.

Clinton Townsend, founder and owner of FreeATM, originally had the idea that his company would own and operate ATMs. That vision has evolved, however, and now FreeATM is partnering with major cash-machine operators Everything ATM, ATM Money Machine Inc., and NationalLink. The latter operates roughly 10,000 ATMs around the country.

“We have demand from operators from Boston to Hawaii, but we’re trying to control the roll-out,” Townsend said via e-mail. “We’re targeting the week of August 18th to launch. This may move around by a few days or so, as we are coordinating several venues to be unveiled at the same time.”

(MORE: How Do I Pick a Bank?)

If and when such ATMs arrive in your neck of the woods, you can say goodbye to the out-of-network ATM fee, which averages $2.60 nationally, according to Bankrate.com study. It’ll be great to get rid of one of life’s most annoying fees. Now we just have to wait and see how annoying the targeted ads are that are replacing the fees.

Bear in mind that there are other ways to avoid ATM fees, the most obvious of which is only using machines that are in your network. Also, a couple of convenience stores actively promote the fact that they have fee-free ATMs—a wise move considering that it gives consumers an extra reason to swing by and maybe buy some chips, jerky, and soda and gas up the car while they’re at it. Last fall, the Sheetz chain announced a partnership with PNC Bank to host 480 surcharge-free ATMs in its stores in Maryland, North Carolina, Ohio, Pennsylvania, Virginia and West Virginia. Wawa, meanwhile, has hosted surcharge-free ATMs for years, and celebrated its one billionth free ATM withdrawal back in 2010.

Again, while these machines don’t tack on fees, your bank might for using an out-of-network ATM. Check your bank policy before finding a $2 or $3 fee on your monthly statement—because while all fees are annoying, they’re especially annoying and unpleasant when they come as a surprise.

MONEY Odd Spending

There’s Probably No Cash in Your Wallet. Could That Cost You?

140528_EM_NoCash_1
Nikola Bilic—Alamy

If you walk around with little or no cash, you're in the majority. But choosing plastic over cash for everyday purchases could mean you'll spend more in the long run.

According to two recent surveys, the majority of consumers walk around with little or no cash. Most prefer plastic for the sake of convenience and safety. There could be an unfortunate side effect, however, based on the theory that people spend more when making purchases with credit or debit cards rather than cash.

Last week, VoucherCloud, a UK-based deals and coupon site, released the results of a survey of 2,341 Americans indicating that “over half of American citizens (57%) ‘never’ carry cash, instead relying solely on credit and debit cards to pay for their daily expenses.” Only 10% of survey participants said that they “always” carry cash, and another 33% said that they carried cash “rarely” or “sometimes.”

Could this be true? Do the majority of American adults you pass on the street really have empty wallets? There’s reason for skepticism. Let’s start with the question that prompted the responses: “How often do you carry cash with you on an everyday basis?” Many may read this question as essentially asking, Do you always carry cash? That’s different than asking if you usually keep a few greenbacks in your pocket.

What’s more, another recent survey, from Bankrate, focused on the same subject but ended up with very different results. In its survey, which asked, “How much cash do you usually carry on a daily basis?” Bankrate found that only 9% selected the option “Don’t carry cash/does not apply.”

There’s no denying that folks carry a lot less cash than they used to. According to Bankrate’s data, more than three-quarters of people generally walk around with $50 or less: 40% usually have less than $20 on hand, 29% say $20 to $50, and 9% typically go cashless (or “does not apply,” whatever that means).

In both surveys, participants said they felt safer that way. The top reasons given in the VoucherCloud survey were “concerns over safety and the risk of theft” (65%) and “risk of losing my wallet and/or its contents” (53%). Women tend to carry less cash than men—77% of female respondents said they keep $50 or less handy, versus 61% of men—perhaps owing to the fact that women “may prefer to carry less cash than men so as to reduce the risk of being a target for criminal activity,” according to Bankrate chief financial analyst Greg McBride.

As for whether it’s wise to carry little or no cash, the surveys come to very different conclusions. When asked, “Do you spend more or less when paying by card instead of cash?” 84% of VoucherCloud respondents said they do more damage when spending with plastic. “While using payment cards rather than cash is a widespread modern phenomenon, because it is so quick and convenient, it can become a dangerous trend for some of us!” VoucherCloud’s Matthew Wood warned. “It’s much harder to keep up with what you’re spending as you don’t see the money leave your hands and, because it’s just a little piece of plastic, it doesn’t feel like a real exchange. It’s easy to get carried away.”

There’s plenty of research out there to back up this theory. Generally speaking, the idea is accepted that handing over cash feels more tangible and “hurts” more compared to quickly swiping a card. Many budget and personal finance experts recommend going cash only and maybe even freezing credit and debit cards in a block of ice as a strategy to limit one’s spending.

The Bankrate study, on the other hand, makes the argument that people today think of any cash as “petty cash” that will inevitably be spent quickly and carelessly. So it stands to reason that people don’t want to carry around too much. “If you’re carrying more, maybe you feel you have more, and you feel you spend more easily,” Joydeep Srivastava, a professor of marketing at the University of Maryland, told Bankrate. To many consumers, cash on hand is as good as cash spent. “As soon as you draw it from the ATM, it’s like you’ve already spent it,” said Srivastava. “You don’t feel that pang of guilt of spending it anymore.”

So which theory is true? If you’re trying to avoid unnecessary spending, should your primary mode of paying be plastic or cash? And by extension, is it best to carry lots, some, or no cash? The truth is, the answers probably vary a lot from person to person.

If you’re the type who is constantly piling up credit card debt or getting hit with overdraft fees on a debit card, it may be time to put the plastic on ice and limit yourself to cash-only expenditures. And it’s probably best to try to plan out your daily expenses and limit how much cash you carry around. Because if you have more cash than you need, you know you’ll just spend it.

TIME Companies

Barclays Cutting 19,000 Jobs in Major Trim of Investment Banking Ambitions

The British bank is scaling back on its ambitions to join the ranks of Wall Street's biggest investment banks.

Barclays will cut 19,000 jobs over the next three years as part of an anticipated new slim-down strategy announced Thursday, two days after the British bank said profits fell more than expected.

The bank is largely returning its focus to its retail operations, cutting 7,000 jobs in its poorly performing investment banking division alone, according to the report released by Chief Executive Antony Jenkins.

Barclays said Tuesday that first-quarter profit fell 5% from a year earlier, with profit in the investment banking division falling 28%. Its retail banking operations saw profits rise 7%.

“This is a bold simplification of Barclays,” Jenkins said in a statement. “We will be a focused international bank, operating only in areas where we have capability, scale and competitive advantage.”

The beleaguered bank, which began boosting its investment banking operations in 2008 when it acquired Lehman Brothers’s U.S. operations, has recently lost some of its top executives and faced criticism from shareholders and politicians alike for its high bonuses.

TIME Drugs

Pot Banking Greenlit in Colorado, But There’s a Hitch

Pot Marijuana Bank Colorado
Grower Joe Rey feeds marijuana plants a combination of nutrients and molasses in a flower room at 3-D Denver Discreet Dispensary in Denver on Dec. 04, 2013. Craig F. Walker—Denver Post/Getty Images

The financial cooperatives could theoretically give the medical marijuana industry easy access to banking services, but they're unlikely to receive the necessary approval from the U.S. Federal Reserve.

Colorado lawmakers approved a financial system that aspires to provide access to banking services for legal marijuana sellers who have largely been shunned by wary banks.

The bill, which still has to be signed by Gov. John Hickenlooper, a Democrat who has supported the idea, aims to wean the marijuana industry off of its dependence on cash, which makes it a target for criminals and is less easily tracked for tax purposes, the Associated Press reports.

Most banks rejected pot businesses even after Jan. 1, when Colorado became the first state to allow recreational pot sales, amid concerns that the federal government would come after them. The Obama administration has signaled that it would let banks do business with state-license marijuana suppliers despite federal law, but it has not issued blanket immunity.

“This is the final piece to our pot puzzle,” Representative Jonathan Singer, the chief sponsor of the proposal, told Reuters. The bill would create financial cooperatives, similar to credit unions, for marijuana businesses.

But while the proposal highlights the problems facing the legal marijuana industry, it’s unlikely to pan out. The cooperatives would only take effect if the U.S. Federal Reserve lets them perform services like accepting credit cards and checks, which is unlikely particularly because the cooperatives will not have deposit insurance.

[AP]

TIME Advertising

This Bank Ad Hilariously Mocks Google Glass

Takes aim at "glassholes"

The faux PSA is a well-worn advertising trope. Now, many advertisers are using it to take aim at the glut of technology in most consumers’ lives. Take this new ad for FirstBank. The spot, created by agency TDA_Boulder, paints a vaguely dark scene from the not too distant future. An entire family is totally distracted from their dinner because they’re all wearing futuristic headsets not dissimilar from Google Glass. (They don’t look as nice.) Pop-up ads, selfies, and games turn the normally Norman Rockwell-esque scenario into a comedy of spasms. The tagline is “get back to the real world”—which in this case consists of a banking app that is apparently pretty easy to use.

TIME Economy

We’re Much Too Obsessed With Central Bankers

Bank Of Japan Governor Haruhiko Kuroda News Conference
This man can't save the economy by himself, and neither can any other central banker. Haruhiko Kuroda, governor of the Bank of Japan, during a news conference in Tokyo on April 8, 2014 Bloomberg—Bloomberg via Getty Images

Japan's struggles make clear that global financial markets are overly focused on what central banks are doing and not enough on what really ails the world economy

Turn on CNBC any given morning and you’ll endure fund-manager after banker after stock-market-analyst attempt to decipher what the U.S. Federal Reserve might or might not do, and when it might or might not do it.

The statements of Fed Chairwoman Janet Yellen are dissected syllable by syllable for clues of direction or intention over and over and over again. Across the Atlantic, Mario Draghi, president of the European Central Bank, garners similar attention. What will — or should — Draghi do to combat the euro zone’s continuing economic woes?

The financial world is obsessed with our central bankers. And though they possess great power over economies and markets — Draghi is credited with almost single handedly quelling the euro-zone debt crisis — the focus on what they say and do has gone too far.

That’s made obvious by the efforts of Haruhiko Kuroda, governor of the Bank of Japan. A year ago, when he first took that lofty post, Kuroda instituted a radical plan to jump-start the perennially sluggish Japanese economy with a massive infusion of cash — like the Fed’s quantitative-easing (QE) programs, but even more aggressive. The plan is part of a great experiment called Abenomics, named after Japanese Prime Minister Shinzo Abe, who inspired it. Abe believes that the central bank’s largesse, combined with government spending and economic reforms, will finally shake Japan out of its two-decade funk.

Yet what Abenomics has become is a study in the limits of central-bank power. A year into Kuroda’s stimulus program, Japan is only marginally better off than it was before. Kuroda has overcome the damaging deflation that plagued the economy, at least for now. But after an initial lift, Abenomics has done little to boost Japan’s growth.

GDP expanded only an annualized 0.7% in the quarter that ended in December. A cheaper yen, engineered downward by Kuroda’s actions, may be helping Japan’s exports a bit, but not enough to close a widening trade deficit. Wages have gone nowhere. Meanwhile, in an attempt to chip away at the government’s giant budget deficit, Abe hiked the consumption tax to 8% this month, which will further drain demand out of an economy that already badly lacks demand.

So inevitably, attention has shifted back to Kuroda. Some economists are expecting the Bank of Japan to step in and increase its stimulus even further to regain momentum. Yet Kuroda can’t fix Japan on his own. The problem is that he’s not getting enough help from Abe and his policy team.

Japan’s economy requires a serious makeover to enhance its ability to grow. Yet the part of Abenomics aimed at major reform, called the third arrow, has progressed much more slowly than Kuroda’s printing presses. Only now is Abe beginning to talk about tackling the economy’s most difficult problems.

In late March, the government began unveiling details of economic zones in which policymakers plan to experiment with looser regulation on labor, health care, foreign investment and other overly controlled sectors — all reforms economists believe are long overdue. But it isn’t clear at this point how far the deregulation will go. Nor is it clear how fiercely Abe is willing to take on those special interests (old-line politicians, civil servants, farmers) that prefer the status quo. Economists believe Japan would see a big boost from joining the Trans-Pacific Partnership, a free-trade agreement orchestrated by the White House, but talks have stalled in part because of Abe’s refusal to open the country’s protected rice industry.

Such reforms would achieve what Kuroda can’t — making Japan Inc. more competitive. In the end, Japan can be saved only by fundamental change to the way the economy works. The same can be said about the rest of the industrialized world. Draghi can help fight deflation or support the banking sector, but he can’t reform the euro zone to produce more growth and better jobs. That’s up to Europe’s political leaders, but their efforts at further integration have slowed. Nor can Yellen improve American infrastructure and education, reform the tax code or take other steps that would aid U.S. competitiveness.

We’ve come to rely so much on our central bankers because politicians and corporate leaders are failing to fix what really is holding us back. Whatever their meeting minutes might tell us, central bankers can never say enough to finally get the global economy on the road to health.

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