Friday Financial Five, May 30, 2014
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Friday, May 30, 2014
Dan Forbes, GoLocalProv Financial Expert
Unemployment down across the country
The unemployment numbers for April are out and continue a slow but sure improvement. Forty three states showed a decrease from the prior month and the national average rate is 6.3 percent. There is an argument to be made that the quality of the new jobs may not match those that were lost during the recession. As for individual states, North Dakota is still capitalizing on the expansion of oil production. The nation’s leader in housing growth sports an unbelievable rate of 2.6 percent. The worst states continue to be Nevada and Rhode Island, the only two with unemployment rates of 8 percent or above.
GDP now shows 1st quarter contraction
The first quarter Gross Domestic Product numbers were revised and the U.S. economy actually shrunk by one percent as opposed to growing by a small percentage. This is the first contraction since 2011. The first quarter economy as a whole seemed to be the victim of the cold weather and subsequent halt in consumer spending, but the numbers are expected to show improvement in the second quarter.
Another approach to Long Term Care pricing increases
Long term care policy owners, especially those holding older policies, are being slammed with massive price increases. Genworth, the largest seller of Long Term Care insurance, is lobbying regulators to change the way these increases take place. Instead of huge double digit hikes, the new methodology would subject the policy holder to yearly reviews and smaller price bumps. An insured might therefore sustain smaller increases each year over a 10 year period instead of an 80% increase at the end of the tenth year. This could allow for more preparation and increase the probability that the insured will keep the policy in force instead of letting it lapse in the face of a massive price hike.
Michael Jackson estate fiasco
There’s another high profile celebrity estate case to get people pondering the ramifications of their demise in terms of property transfer and possible estate taxes. In the case of Michael Jackson, years after his death in 2009, there’s still a question about the value of his estate and how much is owed in estate taxes. The executors handling his estate are arguing for a value of $7 million, which may seem slightly off since he earned $160 million last year alone. Meanwhile, the IRS estimates the value at more than $1 billion, meaning his heirs would owe more than $700 million in taxes and penalties. While most of us might not have estate planning needs of this magnitude, it reinforces the importance to properly value our assets, businesses, and Beatles catalogues so our beneficiaries aren’t left holding the bill.
Golf losing golfers
This Bloomberg report cites the large number golf course closings and the 400,000 people that left the sport last year. Golf has long been considered a high priced sport, but is there any correlation between the sport’s demise and the status of the wealthy? Another theory is that the sport is tied to the “Tiger Woods” market. With his high profile problems and injury issues, it may be that golf’s popularity ascended as high as Tiger’s successes and will now descend in concert with his regression.
Dan Forbes is a regular contributor on financial issues. He is a CFP Board Ambassador. He leads the firm Forbes Financial Planning, Inc in Providence, RI and can be reached at [email protected].
Related Slideshow: Massachusetts Business Rankings
See how Massachusetts stacked up.
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WalletHub
Massachusetts has 2015's 28th highest insurance premium penalties for high risk drivers, according to a WalletHub report.
Mass is behind Colorado and New Mexico who come in at 26 and 27 spots respectively while Mass is ahead of Tennessee and the District of Columbia who rank 29 and 30 respectively.
Massachusetts ranks 14th overall in the category of DUI conviction annual premium increase with an amount of $756.
Massachusetts ranks 20th overall in the category of speeding over 20 mph annual premium increase with a total of $261 while ranking 21 overall in the category of two accidents annual premium increase with a total of $1,364.
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WalletHub
Massachusetts has been ranked as the 5th most eco-friendly state in the country, according to a recent study by WalletHub.
Mass ranks tenth in environmental quality and fourth in Eco-Friendly Behaviors landing them in 8th overall.
Mass is behind Minnesota and New York who are in the fourth and third spots respectively, and in front of Washington and New Hampshire who come in at the six and seven spots.
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The Economist
Small Business Friendliness Grade: D+
The Economist grades states on an A+ to F grading scale for its small business climate. Massachusetts ranks near the bottom of the nation, joining New Mexico and New York in receiving D+ grades. 9 states scored worse than a D+ in the Economist rankings.
Overbearing bureaucracy and excessive licensing is stifling small business in America.
Read More About The Economist Grade Here
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CNBC
#25 CNBC
CNBC ranks each state in cost of doing business, economy, technology and innovation.
Massachusetts' unemployment rate as of May 2014 was 5.6 percent. The state added 9,100 jobs in the month of May.
Read More About CNBC Ranking Here
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Forbes
#13 Forbes
Forbes ranks each state in business costs, economic climate, and growth prospects.
The most damning in the commentary:
Massachusetts’ business costs, including labor, energy and taxes, are the highest of the 48 contiguous states—only Hawaii is higher—at 20% above the national average.
Read More About Forbes Ranking Here
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ChiefExecutive.net
#47 ChiefExecutive.net
ChiefExecutive.net ranks each state in taxations and regulations, workforce quality, and living environment.
The most damning in the commentary:
Taxation and regulation are always the key barometers. Massachusetts and Oregon are the worst.
Read More About ChiefExecutive.net Ranking Here
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Wallet Hub
#10 Wallet Hub
Wallet Hub ranks each state in ROI rank, state tax rank, and overall government services.
Massachusetts ranked #49 in worst roads and bridges, but ranked #7 in overall government services.
Read More About Wallet Hub Ranking Here
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ALEC
#41 ALEC
ALEC ranks each state in economic performance and outlook.
Although Massachusetts ranked low in economic performance, a forward-looking forecast is based on the state’s standing in 15 important state policy variables. Some of these variables include top marginal personal income tax rate and sales tax burden.
Read More About ALEC Ranking Here
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Kauffman Foundation
#29 Kauffman Foundation
Kauffman Foundation ranks each state in entrepreneurship.
Entrepreneurial activity generally is highest in Western and Southern states
and lowest in Midwestern and Northeastern states.
Read More About Kauffman Foundation Ranking Here
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Free Enterprise
#18 Free Enterprise
Free Enterprise ranks each state in performance, exports, innovation + entrepreneurship, business climate, talent pipeline, infrastructure.
Massachusetts's reputation as a hotspot for science and technology endures in this year's rankings. The commonwealth is a center for STEM jobs and university research and development, ranking 4th and 2nd, respectively, in those two categories. It also ranks 6th as a center for high-tech establishments. Massachusetts is taking aggressive steps to bolster economic activity with high-impact university-industry R&D projects and new tools for tech-based startup companies.
Read More About Free Enterprise Ranking Here
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