Reuters Money

One man’s retirement crusade to help Detroit and baby boomers

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Randal Charlton (REUTERS/handout)Randal Charlton has had a long, colorful career with plenty of ups and downs. In his 71 years, he’s done everything from tending dairy cows for a Saudi sheik to starting a jazz club in Florida. And as a lifelong entrepreneur, he has bought and sold 14 different companies.

Charlton’s last venture was a Detroit-based biotech company called Asterand, which he co-founded and then merged in 2006 with a U.K.-based competitor. He was 67 years old after the deal closed – a time when many would hang up their spikes and take it easy.

Instead, Charlton took on a daunting new challenge: fighting Motor City’s economic blight by building a successful business incubator for entrepreneurs called TechTown. Charlton raised $24 million from foundations and government, gathered together an impressive array of resources for training and start-up funding and recruited a small army of start-ups that have created a total of more than 1,800 local jobs.

TechTown is located in an old five-floor automotive plant with 130,000 square feet. When Charlton took over, just one floor was built out, and the center was running on loans guaranteed by nearby Wayne State University. Since then, the incubator has been home to 250 companies, and more than 2,200 entrepreneurs have graduated from its training programs. Last year, 14 TechTown companies received capital infusions totaling more than $1.35 million. The incubator has invested $700,000 directly in early-stage businesses and helped clients raise $14 million in follow-on funding.

Zap zombie funds within your portfolio

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zombie index fundsDo you have zombie index funds within your portfolio?

Instead of eating up your brains, they devour your nest egg with high expenses and walking dead performance. They may be lurking within your 401(k)-type plan or individual retirement account.

I like index funds because they generally can track nearly any kind of asset class. As such, they are the white bread of investing and should cost about the same from fund to fund. The cheaper the better. Why pay Nieman-Marcus prices for the same thing you can get at Costco or Sam’s Club for less?

Jobless rate for older workers is lower, not better

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Rick Lopatin has been looking for work for three years. The 56-year-old is the former chief financial officer of a middle-market pharmaceutical company in the Chicago area; ever since a merger and his subsequent job loss in 2008, he’s been job-hunting and networking intensively, and he’s landed  several interim CFO engagements – including one at a medical devices company on Long Island.

That company offered to make the job permanent, but Lopatin turned it down. He figured the position might have lasted just a few years, and it would have required relocating from the Chicago suburbs, where Lopatin’s wife has a secure managerial position at one of Chicago’s largest hospital systems — a job she’s held for 15 years. “We just couldn’t afford to put that income at risk,” Lopatin explains.

Medicare Part B premium hike will be smaller than expected

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Seniors caught a break Thursday when the Obama Administration announced that Medicare Part B premiums won’t rise as much as expected in 2012.

The premium for Part B – which funds doctor and other outpatient services – will be $99.90 in 2012, up just 3 percent compared with this year. And the Medicare Part B deductible will be $140, a decrease of $22 from 2011.

Tax deductions are popular, but penalties may work better

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The National Zoo's baby panda Tai Shan munches on a carrot in the Giant Panda Habitat of the new Asia Trail area at the zoo in Washington October 11, 2006. REUTERS/Molly RileyWhen making tax policy, there’s a choice between carrots or sticks: Does the government give taxpayers credits or deductions for doing the right thing (buying their homes, giving money to charity, not emitting greenhouse cases) or penalize them for doing the wrong thing?

Brian Galle, who is on leave as an assistant professor at Boston College Law School and currently a fellow at the Urban Institute in Washington, DC, has been analyzing those choices, and come to a surprising conclusion: Expenditures may be politically expedient, but penalties would often be preferable for fiscal policy.

With few female angel investors, signs of change

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In the traditionally male world of angel investing, Ed Reitler is used to having his voice heard. A partner in Reitler Kailas & Rosenblatt LLC of New York City, he’s also the founder of the ARC Angel Fund, a New York-based investing launched in 2010. So when he says that it’s “incredibly important” to develop female angel investors because “they are crucial to ensuring the funding of a more diverse group of companies,” you’d hope his male counterparts would take notice.

After all, Reitler’s got a point. A 2006 report by the Ewing Marion Kauffman Foundation on women and angel investing concluded that “women entrepreneurs gravitate to women angels,” and that those benefactors “look at more women’s start-up businesses than some of the more traditional [male] groups do.”

Meditations on money mania: Why we gorge on the financial buffet

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Are you a money maniac? While finishing up Michael Lewis’s “Boomerang,” his latest book on the financial meltdown, I was intrigued by a few of his observations on a cultural and psychological malady.

Since some of my academic training is in psychology, I’ll take a stab at what I think is going on. We spend (and eat) too much because the culture encourages it at every turn, but we have the ability to resist temptation. We’re hardwired to do the wrong thing, yet can still make rational decisions.

Turn home into a winter wonderland, reap profit later?

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Want to kick up your feet no matter how hard the cold weather kicks its heels? With winter on the way, we examine luxury renovations ideal for cocooning. Judge for yourself whether they’re worth a set of blueprints and a stack of greenbacks.

Item: Home theater system

Why you want it: Screening movies in your own theater — complete with rump-shaking sound and a larger-than-life picture — can bring out the Hollywood mogul in anyone.
Cost: Estimates vary widely, but figure a minimum of $5,000 for a high-end setup that includes 7.1 Dolby Digital surround sound, at least seven speakers and a subwoofer, amplifiers and a 73-inch rear projection TV that can reproduce 3D and HDTV images. Rich Conklin, a principal engineer with Grand Home Automation in Grand Rapids, says the company’s “Signature Series” surround systems range from $15,000 to $30,000.
Value: A survey conducted by Axiom Home Theaters in Dwight, Ontario, Canada found that a 375-square-foot home theater can add $15,000 to $25,000 to a house priced between $150,000 and $350,000. (Those figures apply to both U.S. and Canadian dollars.) However, this is one asset you can take with you to a new home, as many of the components are portable.
Did you know?: Music engineer/producer Jeremy Kipnis designed a home theater system that reportedly cost more that $6 million, and incorporates three dozen-plus speakers and a motion-picture screen measuring 18 x 10 feet.

Identity theft among family members affects millions

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Two million to three million elderly parents had their identities stolen between 2006 and 2010 by a younger family member for fraudulent reasons including opening lines of credit, according to a new study.

The report by ID Analytics is different from typical surveys on the subject, which only capture what people say. This time, company CTO Stephen Coggeshall says, the figures are based on analyses of 1 billion applications for credit cards and cell phones that showed just how many times younger family members apparently fraudulently used their elder parents’ credit.

Recent sell-off sets up next gold rally

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The following is a guest post by Lawrence Carrel, author of “ETFs for the Long Run” and “Dividend Stocks for Dummies.” The opinions expressed are his own.  Full disclosure: The author has had 7 percent of his personal retirement account in a gold ETF for the past four years.

When the price of gold plunged 20 percent last month, many market watchers declared the gold boom over. Stalled, yes; ended, no, according to many gold analysts, who believe the precious metal may instead be near a new sustained rally.