Investing In New Media


It sounds like free money:  Everywhere you look, people are glued to their mobile phones, whether they’re in line at the post office, watching TV in their living rooms or cutting you off during the morning commute. All you have to do is throw some money at the stock offerings for Facebook or Twitter and wait for the cash to start rolling in, right? But, if you’ve checked recently, Twitter’s stock has plummeted, they’re laying off workers and investors are panicking. Facebook had the same growing pains, and anyone old enough to remember Y2K also knows the names etched on the gravestones in the social media graveyard: Friendster, Myspace, Google Buzz, etc.

How can you protect yourself from disaster without missing out on what appears to be the wave of the future? You don’t want to end up kicking yourself because you missed out, just like you don’t want to kick yourself for buying too much. Below are some tips for investing in emerging technologies without losing your shirt. 

1. Understand the product.  You’d never buy Coca-Cola stock if you didn’t know what a soft drink is, so don’t buy stock in social media unless you understand their business. Social media sites are in the business of selling data to advertisers.They make their money by developing sophisticated algorithms that claim to understand you very well, so advertisers don’t have to spend big money to broadly distribute their message. What this means is that users are the product and advertisers are the customers. 

Facebook and Twitter have very different ways of displaying content to users, and therefore have different pitches when they talk to advertisers. The best example of the difference between the social media giants is from summer 2014: Facebook was filled with Ice Bucket Challenge videos while Twitter was full of unrest in Ferguson, Missouri. At the time, this was seen as an indictment 

of Facebook: Its vaunted algorithm was weighted too heavily to favor users’ immediate network and content that utilized Facebook add-ons like its video player.  Twitter was correctly identified as the better medium for serious news. In retrospect, the seriousness of Twitter is its problem – users go to Twitter for news, revealing less of themselves and making themselves less easy to target for ads. 
2. Understand the market.  Facebook is preferred by Baby Boomers, while Twitter is preferred by millennials, mostly because Boomers (their parents) are on Facebook. As of right now, Boomers are a more lucrative market because they have higher incomes and net worth. However, over the next five years, Millennials are expected to comprise more than half of all workers in the country and have an even larger share of personal spending. Boomers will be retiring as millennials are buying houses, minivans, golf clubs and all of those markers of suburban middle age. They can’t just buy coffee, cellphones and tattoos forever.
If you’re buying Twitter stock, you’re planning on holding it until the millennials come of age, and therefore you’re betting on Twitter figuring it out over the long term. If you’re buying Facebook, you’re planning on selling sometime before the Boomers disappear from the workforce. Remember, all of those headlines about Boomers spending more in retirement are looking at Boomers at the beginning of retirement – when time seems ample, energy seems infinite, and all of those hobbies put off for decades need new supplies.  Even America’s most mercurial and surprising generation will eventually succumb to the comforts of retirement. 
3.  Understand the risk.  There’s never been a guaranteed safe play in the history of tech stocks. It’s doubly so for social media. Bear in mind that Facebook and Twitter compete directly with Google, Microsoft and increasingly with Apple for generating data to sell to advertisers. Of those companies, Google has always been tethered to the massive losses from YouTube, Microsoft took a major hit with its antitrust suit, and Apple nearly went belly up during Steve Jobs’ absence. It’s easy to read that last sentence as a list of great businesses beating the odds and overcoming adversity, but it ignores all of the companies that failed to do so.  Buying Facebook or Twitter is going to be risky.
There are lots of ways to combine those three ideas to better protect yourself. If you want to offset risk, there isn’t much of a better investment than the savings products we have at Destinations Credit Union. Take a look at the Kasasa Saver account you can pair with Kasasa Cash Rewards Checking! By stocking up on our certificates or a High Yield Account, you can use low-risk investments to protect yourself, while still getting a higher return than one of those corporate banks can offer. Check out our rates.

If you’re worried about the time involved in your investment, our savings products can help there, too. If you’re buying Twitter now, you’re making a deal with yourself that you won’t sell it too soon and miss out on profits. But what if you need the money soon? Our Kasasa and High Yield accounts have no penalty for withdrawing your cash if you need it, helping put your mind at ease.

Whatever your plan for investing, we can help you fill out your portfolio to help you reach your goals. Just give us a call and let us know what you want to do. We’ll sort out the rest.
Sources:

http://www.americanpressinstitute.org/publications/reports/survey-research/millennials-social-media/ 

The Shoulds Of Retirement


When it comes to retirement, the variety of ways to save money can be so confusing that even the most diligent investors might wonder if they are looking at the right information, doing the right thing or if they’re even on the right track. Would you know if you should be using a fancy savings plan?  Should you put more in? Less?  Should you panic?  While we’ll get to the rest of the questions, the answer to the last one is no, you should not panic.  There is no retirement plan anywhere that does better when you panic.

For anyone confused about retirement, there are lots of sources that explain who, what, how, when and why, but very few places to turn for one of the most important questions – should.  This guide is meant as a quick reference to that really tricky word, with some of the most common “should” questions answered. Like any other guide, though, it can’t be as specific as you’d like, so if you have more questions, get in touch with us at 410-663-2500, or ask questions our Facebook pageAsk us your shoulds or see what shoulds other people are asking.  If you’ve got a question, it’s a safe bet you’re not alone. 
Question:  How much money should I have when I retire?
Answer:  This is the most common “should” question in America right now, probably because of its importance.  The answer that most experts give, “as much as you’ll need” isn’t particularly helpful.  A better, although still maddeningly incomplete answer involves some simple math you can do on the back of a napkin: take your annual income the year before you plan to retire and subtract your annual retirement income (Social Security, pension, trust, etc.) from it. Whatever that difference is, multiply it by the number of years you expect to live after retirement, probably 15-20.  That’s how much you need, give or take a bit.
For example, if your Social Security and pension pays you around $50,000 per year and you’re making around $150,000 before you retire, the difference is $100,000.  Multiply that by 20, and you’ll probably need around $2 million.  If that sounds like a whole lot of money, that’s because it is a whole lot of money.
Question:  How much should I be saving now?
Answer:  Another question that all-too-often results in a frustrating answer. You should save as much as you can, but not more than you can.  A better answer is that retirement should be your savings priority, ahead of college funds or other long-term savings simply because you can’t get a loan to retire, but you can for virtually everything else.  If you feel like your monthly contributions are just drops in the bucket, stop focusing on the bucket.  Instead, take a look at your monthly picture.  Make a pie chart with five big slices:  Bills, debt, spending, short-term savings and long-term savings.  This isn’t yet the time to go through and figure out how to trim your bills or refocus your spending, just look at those five. How much of your long-term savings is being used for retirement?  Could that number be higher?  If so, put more into retirement.  If you want to find ways to reduce your costs so you can save more money for retirement, look at those categories again and start making cuts from right to left.  First, cut some spending from other long-term savings.  Then short-term savings, spending, debt and finally bills.
Question:  When should I start saving?
Answer:  If you read the last two questions and have sharp pattern recognition skills, you might expect a frustrating answer, but this one is actually easy.  If you haven’t started, start today.  Like, right now. Seriously, either click this link for information on our IRA programs. It only takes a few minutes, and you’ll feel so much better.  Remember the motivational cliché: the best day to plant a tree was 20 years ago, the second-best day is today.
 
Question:  What kind of retirement account should I get (or get next)?
Answer:  There are three major considerations when selecting a retirement account.  First, how many years do you have until you retire?  The answer to that question should help determine your risk.  The second question is how much money do you make?  The answer to that question determines whether you’d like to be taxed on the income now or in retirement.  Unfortunately, you’ll have to pay taxes on it at least once.  Finally, have you maximized the benefits of another account?  If you’re past the point of getting your employer to match your 401k, look at all of your options.  If not, put in as much as you can that your employer will match. You’re not going to find a lot of retirement plans that pay more than the 100% rate of return your employer is offering by matching funds, and if you do find one that can consistently outpace your employer’s contributions, it’s probably illegal.

Once you have the answers to those questions, check the link above or drop us a line at info@destinationscu.org and we’ll set you up with the best plan we can.

There are a lot of retirement guides out there, but most of them aren’t very good at those “shoulds” that matter so much in our daily lives. Hopefully, this guide has given you enough information to know what questions to ask.  We’d love the opportunity to talk about these shoulds or any others you might have. For now, check out our Facebook Page and join in the conversation!

Sources:

http://www.savingforcollege.com/articles/coverdell-ESA-versus-529-Plan
http://money.cnn.com/retirement/guide/basics_basics.moneymag/index7.htm

http://money.usnews.com/money/personal-finance/articles/2014/12/19/7-retirement-savings-accounts-you-should-consider


Shop Local!


Your credit union is built on the idea of people helping people.  You already know we can do a better job looking after your money than a mega-chain bank that answers to shareholders, because we know you and our community.  So why give that up when you find a bargain online?  Shopping locally is better for the community, better for the environment and the best way to find something unique that can make all of your friends say “wow.”  

Shopping locally benefits your community. 

When you shop locally, the money you spend stays in the community.  Buying a new pair of shoes from a local shop takes dollars out of your pocket and puts them into the pockets of a local resident, of course.  What you might not consider is that those dollars get spent by the business owners as well, and they’re also likely to spend their money locally.

American Express estimates that about 68 cents out of every dollar spent in local shops stays at home, and if that dollar is spent locally three times, it means that – for every dollar you spend at local shops – $1.45 goes back into the community.  It’s what economists refer to as the multiplier effect, and it’s very powerful.

Fun fact:  The multiplier effect is why the government is still willing to make pennies, even though minting them costs more than one cent.  The multiplier effect is powerful enough to justify all that loose change in the jar next to your bed, and it’s powerful enough to make shopping locally a force for change.

Of course, that money doesn’t just go to shopkeepers and restaurant owners. The local government takes out its share in local taxes.  Even if you hate the idea of taxes, and we all may grumble in April, local taxes go to schools, firefighters, and other services in the area.  Buying dinner at a local bistro can be the reason the town has enough money to fix the potholes on your street. Not a bad dessert.

 Shopping locally is better for the environment. 

You already know about the danger of greenhouse gases and the effects of global warming.  If you don’t remember anything else, you probably remember Al Gore’s visual of a polar bear floating away. What’s easy to forget is that everything you buy had to come from somewhere.  If you’re drinking imported spring water from Fiji, that water flew halfway around the world.  If your new pants were made in China, they racked up frequent flyer miles, too.

It’s really hard to avoid foreign manufacturing, but many local businesses have locally made goods for sale, which eliminates at least one flight your product might take, saving on fuel and greenhouse gases.  Even if the product you’re buying was manufactured overseas, buying it locally can shave a flight or two off the product’s carbon footprint.

Shopping locally is the best way to find hidden gems. 

There’s nothing quite like the feeling of finding something your friends have never seen before. Whether it’s jewelry from a local metalsmith, a purse from a local boutique or pottery from a local artisan, local shops have the best potential for one-of-a-kind, where-did-you-get-that, I-love-it-so much uniqueness out of any shopping you can do.  Anyone can get on Amazon or check out a department store.  It takes a real connoisseur with a real eye for style to shop locally and find the best products.  Show off your personal style with buys from local artisans. The Parkville Towne Fair or the many ethnic festivals are great places to look for local crafts.

One final benefit of shopping locally is that many of your finds come with a story.  Those earrings might be from a local artist who got the inspiration from the nursery rhyme her mother told her, or those plates might borrow their pattern from the artist’s love of pop art.  Whatever the story, local artists will tell you how they came up with their unique designs.  Part of the fun of local shopping is the connections you can build with local artists, and hearing their stories is part of it.

San Francisco started recognizing the historic contributions of local businesses by listing important shops on its historic registry.  Looking around Parkville and Baltimore, which businesses would you nominate for historic status?


And, don’t forget to keep your banking local.  Destinations Credit Union (along with many other credit unions and local banks) is right here in Parkville offering world-class financial services and access wherever you travel.  We’re owned by our members and the money is invested back into our residents and our communities.

Check out the Parkville/Carney Business Association to see many local businesses who support our community.

Sources: 

http://money.usnews.com/money/personal-finance/articles/2011/10/28/how-consumers-and-communities-can-benefit-from-buying-local

"ISIS" Hacks Credit Unions – What You Need To Know


ISIS is the new face of terrorism and the Internet is the next front. Terror organizations use social media to recruit members, spread their messages and plan attacks. That they would also use hacking to evoke fear should come as no surprise.

That appears to be what happened on March 9 this year when visitors to the websites of several credit unions did not see the front page they were expecting. Instead, they saw a black screen with the logo for the Islamic State. Under the image were the words “Hacked by Islamic State (ISIS) We Are Everywhere :)” along with a link to a now-defunct Facebook page.

A closer examination of the defacement suggested to the FBI that this was not the work of the international terrorist group. First, the smiley face at the end of the message does not fit the tone of other messages the group has sent. Second, the targets, which included several small businesses and credit unions, seem out of character for the group. Most of the group’s rage tends to focus on agents and governments it views as occupying territory in the Middle East. Third, the level of damage was relatively low. A sophisticated hacking operation would aim to debilitate or destroy economically or politically important assets. While taking down a credit union’s website for a few hours is certainly disconcerting, the dollar amount of that can be applied to the damage is relatively low.

Rather, the FBI suspects this is the work of fairly unsophisticated domestic hackers. The target selection fits more with an attention-seeking group of malcontents. The strategy of website defacement is popular among amateur computer security students seeking to prove their skills or leave a “calling card.” No member data, accounts, or contact information was compromised in the hack and the defacement of the websites has already been reversed.

As with every other security compromise, the possibility that a more serious data breach occurred is not out of the question. In most cases, this breach would involve rigging the website to install malicious software on users’ computers. While it is unlikely, precautions are free and an ounce of prevention is worth a pound of cure when it comes to information security. If you’re concerned about your computer integrity, take the following four steps.

1.) Install, update, and run security software

Using the Internet without antivirus software is like reaching your hand into a medical sharps disposal bin. You’re going to get something and the results won’t be pretty. Several free antivirus programs exist. Popular choices include Panda Security, AVG and Avast.

If you already have antivirus software, you might think you’re covered. Yet, antivirus programs only protect against specific kinds of malicious programming. While they’re certainly the worst of the worst, viruses are only one kind of threat you face on the Internet. You also need an anti-malware program, like MalwareBytes or Spybot. These programs find and remove security threats that, while not quite to the level of viruses, can still compromise your computer.

These programs are still serious threats. Data breaches at Home Depot, Target and others were caused by malware on company computers. Even professional security experts occasionally forget about defending their systems this way.

Once you get the software installed, make sure to keep it updated and run it regularly. The scans usually take between 20 minutes and an hour. That’s all it takes to stay safe from the worst threats.

2.) Change your passwords

It appears unlikely that any user data was compromised in this most recent round of hacks. Still, there’s no reason not to be cautious. Change the passwords you use to log on to major financial websites and any website where you use those same passwords. If you use your Destinations Credit Union password to access your email, change your email password, too.

It’s a good idea to cycle passwords every six months or so anyway. Doing so helps to keep your accounts safe. If you have trouble remembering to do so, consider using a password management service to keep track of your security.

Always choose strong passwords. Four random words with a number on the end is a great way to randomize passwords but keep them somewhat memorable. Just look around your computer area and use the names of the first four objects you see, followed by your birth month. Doing so creates a password that humans can easily commit to memory, but the most powerful computers would take years to crack.

3.) Get a credit score report

You can get a free credit report every year, and it’s a good idea to do so. If you’re planning to buy a house or a car this year, you might want to hold off and use your free report closer to your purchase date. If you don’t have major purchases planned for this year, you can use your free credit score report to check if you’ve been hacked.

Look for accounts you don’t remember opening or large, sudden upswings in debt utilization. These could be signals that someone’s compromised your identity. Call the credit reporting bureau immediately to report suspicious activity.

This alleged ISIS hack is nothing to fear, but it’s worth being cautious all the same. It’s much easier to take preventative action than to regret not having done so. Taking these steps can help ensure you stay safe, no matter what happens.

SOURCES:

http://www.cutoday.info/Fresh-Today/Hackers-Claiming-To-Be-ISIS-Take-Down-CU-s-Site

Financial Self Defense

Identity Theft and Technology – Including Social Media
A recent study put together by The Javelin Group has some disturbing findings: The incidence of identity theft was up 13 percent, compared to the previous year. The total amount stolen was about the same, but the thieves successfully scammed more people. Facebook, Google+ and LinkedIn users take heed: The study found that there were specific factors that put social media users at elevated risk of getting scammed:
  • 68 percent of social media users publicly shared their birthday.
  • 63 percent shared the name of their high school.
  • 18 percent shared their phone number.
  • 12 percent shared their pet’s name.
All of the above information represents the kinds of things a company would use to verify your identity, according to the study’s authors. In some cases, scammers have been known to bluff their way through customer service representatives to get access to other important information – and even wipe out entire accounts. When young or vulnerable people share this information, it could make them more susceptible to stalkers or sexual predators.
The Smartphone Factor 
The study also found that smartphone users were a third more likely to be victims of identity theft than non-smartphone users. This doesn’t mean, necessarily, that smartphones are to blame. But it does seem to indicate that the people who use smartphones are doing something to make them more vulnerable or attractive to scammers.
What can you do to avoid being a victim?
  • Password protect your phone.
  • Don’t use credit cards for Internet transactions over public networks. Thieves have “sniffers” that can extract that data.
  • Don’t store credit card numbers or bank account information on your laptop.
  • Use different passwords for mobile banking apps on your phone than passwords you do for your phone and email.
  • Promptly report any suspicion that your sensitive personal information has been compromised.
  • Keep documents that list Social Security numbers off of your laptop, or encrypt that data if you do store there.
  • Keep private information private. If any company uses specific information about you to verify your identity – your mothers’ maiden name, pet names, birthdays, etc., keep it off Facebook and any other social media site.
Tip:  Is your mother on your Facebook page? Does she use her maiden name? You are vulnerable.

Pro tip: If your mother is on your Facebook page, and you share your date of birth, you are a prime candidate for ID theft.