Surgeon's Bulletin Board

May 25, 2007
Surgical Rounds, April 2006, Volume 0, Issue 0

A financial how-to book that doesn't mentally tax its readers

How many of us are guilty of reading only the first couple of pages of the latest financial best seller and then leaving it sheepishly on our nightstand for another evening when our minds are a bit more focused? Financial how-to books have the tendency to leave their readers feeling like they need the Cliffs Notes version to truly understand their meaning. Now an easy-to-digest translation of finance is available to anyone who ever wanted to know what a contango was, but was too embarrassed to ask. In The Wall Street Journal Complete Money & Investing Guidebook (Three Rivers Press; 2006), Dave Kansas does not simply supply a map, compass, and a half-hearted "good luck," but instead leads the reader through the world of finance by the hand. Part history book and part financial text, each chapter covers a topic simply and thoroughly, as if the reader were a visitor from a foreign land. Economics, Wall Street, stocks, bonds, mutual funds, retirement, real estate, and nontraditional investments?Kansas skillfully covers these subjects by drawing on his knowledge as an editor of The Wall Street Journal's Money & Investing section. Illustrations break down how to read the distinguishing marks on paper money, and graphs show you how the Dow has fared through past presidential administrations. Kansas even explains how to read those intimidating charts in the back of financial publications. As complete as its title proclaims, Kansas' 200-page guidebook is a must-have crash course on money and investing. Although beginners will benefit the most, experienced surgeon investors can also discover new financial facts with Kansas' exploration.

Debit rewards programs stalled

With slowing profit margins due to fierce competition among credit card issuing banks, companies are now offering rewards programs for debit cards in an attempt to attract customers to use their plastic rather than cash or check. According to the Wall Street Journal, 36% of banks that issue debit cards offer rewards programs, up 12% from 2 years ago. While some carry annual fees, many offer a reward for purchases made only with a signature and not PIN-based transactions. Yet debit rewards programs, which allow card users to redeem points for such items as gift cards or even trips, remain a struggle for banks, and a winning strategy for rewarding customers for loyalty has yet to emerge. One of the problems is linked to the very nature of debit cards. Whereas credit cards allow a grace period for repayment, debit cards are linked directly to the consumer's bank ac?count, a direct payment that does not allow for reliance on America's greatest standby?debt. The fact that institutions earn more money from credit card transactions than debit card transactions compounds the issue. Not only do card issuers receive finance charges and late fees for using credit cards, but merchants pay on average 1.6% for every credit card transaction, compared with 1.3% for signature-required debit transactions and 0.8% for PIN-based transactions. These fees fund the rewards programs, and the 0.8% difference between debit and credit card fees could explain the less-than-stellar debit rewards programs.

Learn to shop around for the best prices on college textbooks

As a medical school graduate, you know how outrageously expensive textbooks can be. According to the Wall Street Journal, these pricey primers aren't getting any cheaper, with costs going up an average of 6% a year since 1986. But if you have children in college, there are ways they can cut down on textbook spending. On?line shopping is the easiest way for students to find the books they need and compare prices among different sites. Web sites such as AddAll.com and BestBookBuys.com search doz?ens of online stores at once to find the low-est price. Students with similar course loads can also swap textbooks through SwitchTextbooks.com. But keep in mind that although a site may have the best price for one book, it may not be the lowest for another, so you should shop around for each textbook needed. One drawback to online book buying is that students have to wait several days for the book to be shipped, so they have to know exactly what they need long be-fore classes begin, which isn't always possible. College scholars can try to locate used textbooks at local bookstores, but most of the time professors require the latest editions, which come out frequently. When it comes time to sell the books back, eBay is a better bet to get maximum value than the campus bookstore, which usually offers a refund of roughly 50% of the purchase price.

Small shops struggle with high-tech car tools

If you have ever brought your vehicle to a local repair shop and have been turned away because your mechanic does not have the necessary equipment to fix it, you are not alone. As vehicles have become increasingly more computerized and complicated over the past 10 years, many manufacturers require expensive and often unaffordable diagnostic tools simply to figure out what is wrong with your car. Small, independent garages that work on several different brands are hit the hardest because they do not have the money to invest in each manufacturer's tool, according to the Wall Street Journal. For example, Ford Motor Company charges independent repair shops $11,000 for a Volvo scanning tool and the accompanying software. A study by the research firm Tarrance Group of Alexandria, VA, found that 59% of independent auto technicians had problems acquiring necessary equipment or information from manufacturers, and 67% of shops had to divert business to a dealership. This epidemic of lost business may explain why parts and service comprise 44% of dealer profit, while only 28% stems from new car sales, according to the Wall Street Journal. After years of problems, the concerns of drivers and mechanics are finally getting heard. This past November, Rep. Joe Barton (R-Tex) spoke to a House Energy and Commerce subcommittee about the "Motor Vehicle Owners' Right to Re?pair Act," which he introduced in March 2005. If passed, the bill would direct the Federal Trade Commission to institute rules that would ensure independent repair shops and dealers have equal access to repair information.

Did you know?

$36 billion?Net earnings last year for Exxon Mobil, up 42% from 2004. (Reuters, 2006)

1?Number of new blogs created every second. (Entrepreneur, 2005)

1 in 7?Proportion of dollars that will be spent on ethnic food over the next decade. (Entrepreneur, 2005)

70%?Percentage of divorces initiated by women. (Worth, 2005)

60%?Percentage of Americans aged 75 and older who depend on Social Security for at least 50% of their in?come. (Journal of Financial Planning, 2005)

52%?Percentage of college students who say it is okay to download and swap copyrighted files. (BusinessWeek, 2005)

3%?Percentage of Americans who walk to work. (Health, 2005)

Cookies, love, and money for college

Today's grandparents give more than just $20 in a birthday card to their grandchildren. With 70% of the country's wealth controlled by the 50-plus generation, grandparents are in a better position than ever before to contribute to expensive upbringing necessities such as braces and college. According to Money, unless parents are savvy and work together with grand?parents, financial aid problems and tax issues may arise. For items such as braces, generous grandparents should pay orthodontists directly. If they wish to contribute to a future college education, grandparents should open a 529 savings plan in their grandchild's name. An?nual gift-giving al?lows grandparents to move money out of their estate without paying a gift tax. What is more, grandparents can contribute 5 years' worth of contributions in a single year without alerting the gift-tax po?lice, but they should check the cap on their state's 529 plan. Keep in mind that if the grandchild is of college age and applying for financial aid, his or her chances of receiving help could be hurt if significant funds are found in the grandchild's name. Stud?ents should wait to receive their financial package, and then ask Grandma to write a check directly to the school to make up the difference.

Paying bills late is at an all-time high

If you're a surgeon who has paid a bill late at one time or another, you're not alone. Bill-paying tardiness is becoming a national epidemic. Increasing numbers of Americans are paying their bills more than 30 days late, according to the Association of Independent Consumer Credit Counseling Agencies (AICCCA). A report by the American Bankers Association revealed that credit card payments made over a

month late rose to a record high of 4.81% for the April to June 2005 period. If you're having trouble with late payments, the AICCCA recommends that you take steps to correct the problem. Figure out precisely what you owe, so you know where you stand. Then, take a close look at your daily spending habits to determine where you can cut back to save money to pay your bill.Most importantly, stop charging altogether so you do not make the problem worse. If you find that you're still ringing up charges and your payments are out of control, seek help from a certified credit counselor. Visit www.aiccca.org or call (800) 450-1794 to find a credit counselor near you.

Earn free miles when you fly with your pet

Pooches and kitties can now earn frequent flier miles just like their human companions. Midwest Airlines' Premier Pet Program offers your pet one free flight for every three paid roundtrip tickets or six one-way flights. An added bonus is that any person or animal that resides within the same residence can combine trip rewards. Owners can also redeem their 15,000 Midwest Miles for free roundtrip pet tickets. Some conditions do apply. Pets must fly with owners, and service animals or pets shipped as cargo are excluded. When looking for flights, keep in mind that pets are accepted on Boeing 717, MD-80, and Beech 1900 aircraft only. All pets must be in an approved carrier and are held in the forward compartment, which is temperature-controlled and pressurized. Pets and owners have 3 years to accumulate miles for free travel. For more information on how to earn free flights for your pet, contact Midwest Airlines at (800) 452-2022 or visit www.midwestairlines.com.

Finding child care in a competitive market

The hottest market around may not be real estate anymore?it's baby-sitting. That's right, finding in-home child care on a part-time basis is not easy these days, and the demand has pushed part-time rates to full-time levels, according to the Wall Street Journal. Changing work schedules and a growing emphasis on preschool education are fueling the need for part-time help. Instead of hiring a full-time nanny for a 3 year old, more parents split a child's care between part-time preschool and a part-time nanny. But it's not only dual-income households that are looking for help. With ever-increasing extracurricular demands, many at-home parents employ part-time help to manage children's daily activities. So how much are parents willing to invest in their child's daily care? If you live in an affluent area, expect to pay a part-time nanny as much as $20 to $25 per hour for a highly qualified individual, in addition to offering paid vacation and flexible hours to attract the right person. Recruiting fees range from $450 to $2,400, if you utilize a nanny placement agency that carefully screens candidates for you. The Wall Street Journal offers some strategies for hiring part-time child care:

?Set regular work hours, offering at least 20 hours per week.

?Offer paid vacations or days off.

?Raise hourly rates to full-time scale.

?Help nannies find a second part-time job, if necessary.

Phishing scammer caught in net swindle

A British man was sentenced to 4 years in jail for leading a six-man Internet gang that stole nearly $360,000 through a sophisticated fraud that took place over a 12-month period. According to the Associated Press, David Levi, 29, of Latham, England, orchestrated a high-level scheme that employed phishing e-mails to defraud unsuspecting eBay customers. The e-mails pretended to be from the online auction Web site and directed customers to bogus URLs, where victims were asked to input credit card or bank account information and passwords. The gang then used this in?formation to gain access to the financial records of more than 160 individuals. Other gang members' sentences ranged from 6 months to 2 years. The ring-leader's brother, Guy Levi, 22, was sentenced to 21 months.

What is the appropriate tip at a buffet restaurant?

Depending on the class of the establishment and the service you receive, you likely tip 15% to 20% of your check total at a restaurant, a reasonable compensation to a member of the wait staff working hard to serve you. But what if you have to do all the food serving yourself? In other words, what should you tip at a buffet, where service is minimal? The Wall Street Journal posed this question to Peter Post, a director of the Emily Post Institute, who says a suitable tip in a buffet restaurant is 10%. Although the servers may not be going through the rigors of a normal sit-down eating establishment, they're still catering to you by taking your drink orders, refilling them, clearing your plates, etc. Post also says to keep in mind that you should calculate your tip off of the pretax amount of the meal no matter what type of restaurant it is, because it's senseless to pay a tip on the tax.

Has the time come for your child to move out?

Naturally, you want your children to be financially comfortable, and as a result, you allow your children to live at home after college to save money. But what happens when the time comes to let your adult child go out into the world? According to the Wall Street Journal, if a child stays at home for an extended period of time, they may become overly dependent. They may lose the desire to move out and start careers because they feel they have a good, inexpensive living situation. While you are helping your children out by letting them stay in your home, the added cost can hold back your own retirement plans. The Journal article recommends that you set up a financial strategy with your child to prepare them for life on their own. Start by charging them rent, which will get them adjusted to making such a monthly payment and will alleviate some of your financial burden. Also, try to set a tentative move-out date. If your child is living at home while going to grad school, have them pay part or all of their tuition costs, so that putting off starting their career has a financial price. Remember: The point is not only to ease your financial situation but to prepare your child for adulthood.

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