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Seven Strategies to Protect You Against The Volatile U.S. Dollar

A generation of American investors had been, until recently, lulled to sleep by two apparently reliable long-term trends: common stocks that only go up and agreeably tame inflation — a buck is pretty much a buck, today, tomorrow, and five or 10 years hence.

As a result, Americans have been able to ignore currency fluctuations for decades. The dollar was like the horizon, never moving. In the rest of the world, investors have always had to think of the dollar as an investment asset, something to buy or sell when it moves one way or another against the local currency.

Now, U.S. investors must find their footing in this new, suddenly unstable world. The country is headed toward major change — if not utter devalua-tion, we face at the very least unprecedented dollar volatility. The U.S. Dollar Index, which reflects the greenback against a basket of foreign currencies, has traded below 72 and above 88 within the past five years, a 22 percent gap.

Very little about the index’s five-year movements suggest complacency is in order: While the five-year trend is down, the rises and declines have been, at times, close to vertical. The only consistency has been that the dollar seems to move in mirror opposite to the Dow Jones Industrial Average.

March 2012 / Vol. 4, No. 3

Continued on page 2

INSIDE . . .6 Turn Clutter Into Cash! •There’smoneyinyourclosets!Howtoclean

houseandturnaquickprofit

10 Investing •Goforthegoldwiththesegold-bullionETFs

11 Retirement •Conservative-leaningoptionstotheAARP

13 Spending •RewardscheckingaccountoraCD?

15 Your Home •Whatyouneedtobewaryofbeforesigninga

realestatelistingagreement

16 Dr. Franklin’s Mailbag •Paintingonthecheap,ahealthystepinthe

rightdirection,dentalcareforless

18 Franklin Matters

20 Ask Franklin

2 FranklinProsperityReport.com March 2012

How can an investor insulate his or her portfolio from dollar risk and, hopefully, find a meaningful profit in the chaos to come? The Franklin Prosperity Report polled a selection of financial experts on ways to build a defense against dollar volatility. Here are some of the approaches we heard from money managers and investing experts, ranging from a hands-off view to actionable advice for the fully engaged trader.

Approach No. 1: Don’t worry yourself into losses. Currency fluctuation is an issue but perhaps a red herring for most inves-tors, says Michael Farr, president of money management firm Farr, Miller & Washington in Washington, D.C., and author of The Arrogance Cycle.

“I think that Americans who are investing in dollars and using dollars to buy domestic goods and services here in the U.S. don’t really suffer when our currency inflates or deflates,” Farr explains. “If they are earning

their money in dollars, you get an inflated stock or an inflated asset like real estate in exchange for those dollars.”

Most investors should steer clear of currency investing altogether, Farr says. “It raises a level of complexity that they cannot compute.

Investors tend to get blown around by headlines, and almost every invest-ment idea that comes from being blown around by headlines is a mistake,” he says.

Sometimes, too, markets do funny things. “Even with the creation of all this money and deficits, we saw a promise of QE3 and the dollar rallied in the third quarter,” Farr says. “Sometimes there are these flights to safety.”

Instead, discipline should be paramount, Farr advises. “When you add that extra layer of complexity to something people already find intimidating and scary, it’s more of an excuse to keep folks from doing what they need to be doing, which is investing prudently for the long term,” he says.

Approach No. 2: Leave it to the professionals. Volatility is just another variable, one that individual investors are perhaps not equipped to master, suggests Elle Kaplan, CEO and founding partner of Lexion Capital Management in New York. “Currency fluctuation can be either a head wind or tail wind to investments in the foreign markets. In recent years, with a weak dollar, foreign investments provided a boon to investors as they made money in both the markets and from the currency differential,” Kaplan explains. “Once the dollar strengthens, that boon turns into a weakness.”

Kaplan says individuals should avoid buying foreign stocks directly via American depositary receipts and instead rely on funds. “They should look for mutual funds where both the investment and currency fluctuation are

Michael Farr is president of Farr, Miller & Washington, a money management firm located in Washington, D.C. He is also the author of The Arrogance Cycle.

March 2012 Moneynews.com 3

two sources of alpha,” she says. “Good money managers hedge (or, when the dollar is weak, leave unhedged) currency risk as an additional alpha source.”

Approach No. 3: Long term? Buy a farm.One way to counterbalance a declining dollar is to buy producing U.S. farm-land, says Mitch Kasper, founder of Midwest Ag Investors, a farmland fund. The global population just rose past 7 billion and diets are improving in emerging markets, with more demand for rice, wheat, corn, and oils, in part to feed livestock.

“Agriculture is one of the few industries where the U.S. is a net exporter,” Kasper says. “Fluctuations on currency can have a big impact on those investments. As the dollar gets weaker, that makes corn and soybeans grown here cheaper, and there’s huge global demand for all these commodities.”

Kasper plans to open his fund to investors next year, he says. Returns, according to the NCREIF Farmland Index, have long been in the low single digits, although they spiked up to nearly 23 percent in the fourth quarter of 2005, as the real estate boom gobbled up acres. Recent quarters have been back to about 2 percent.

“You’re not going to make 20 percent on an investment like this, but you’re not going to lose money, either. I think high-net-worth investors should allocate a percentage of their portfolio to this and forget about it,” Kasper says. “Twenty years from now, they’ll be thrilled they did.”

Approach No. 4:Diversify into foreign stocks.“Now more than ever, it’s vital that people who invest in stocks invest in stocks worldwide,” says Eric Tyson, syndicated newspaper columnist and best-selling author of multiple investment guides, including The Wall Street Journal best-seller Personal Finance for Dummies. “I’ve been saying

that since 1990, and people looked at me, like, ‘What are you talking about?’”

Buying foreign stocks via mutual funds or exchange-traded funds automatically creates currency diversification, Tyson explains. “You get better growth rates. Most overseas economies are growing

better than ours and have lower rates of unemployment,” he says.

Tyson offers a few caveats, however. One is the coming U.S. presidential election. If a Republican takes office, that might be the end of Ben Bernanke, chairman of the Federal Reserve System. Bernanke gained a second four-year term in early 2010 after being nominated by President Barack Obama,

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Eric Tyson is a syndicated newspaper columnist and the author of many investment guides, including Personal Finance for Dummies.

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but only by the narrowest of margins.

“Most of the candidates have said they would have a Federal Reserve chief who would address the value of the dollar,” Tyson says. Presumably, that will mean a strong dollar policy and an end to Fed intervention. Bernanke’s term is up Jan. 31, 2014, but the market could move in advance of a GOP Fed nominee.

Like Kaplan, Tyson advises leaving the large question marks up to the professionals. “People should do that through well-managed, diversified mutual funds,” he says. “You want to use mutual funds or exchange-traded funds. I would avoid country-specific funds. Volatility and risk defeat the purpose of diversification. Brazil might be hot today, but five years from now, it might not be the place to be.”

Approach No. 5:Volatility as your friend, if you’re agile. “The way we look at it is, How can an investor profit?” says Matthew Tuttle, CEO of Tuttle Wealth Management in Stamford, Conn. “Currency, as an asset class, is noncorrelated with the stock market and has a lot of good opportunities.”

Tuttle advises against trading currency directly in the foreign exchange market, however. “The leverage means small moves could wipe you out,” Tuttle explains. “We do it using exchange-traded funds. We can make money

on a dollar increase or a dollar decrease with-out having to predict the long-term trend for the dollar. We do that with gold, as well.”

Tuttle also cautions against leveraged ETFs because of the potential for tracking error. Tuttle says that he has found that currency ETFs

tend to have less of a problem keeping up with the market. “An oil ETF is going to have tracking error because of the way the market is structured, but we don’t see that with the currency ETFs,” he says.

Approach No. 6: Buy shares in oil-producing countries.One good long-term play on the declining buck is to buy the currencies of oil producers nearest to the United States — Canada and Mexico, says Sean Hyman, editor of the Ultimate Wealth Report currency and commodity invest-ing service, published by Newsmax.

Hyman believes that the best long-term approach is to start insulating your portfolio from the eventual decline of the dollar. “The real battle we face is against inflation, he says. “And what is inflation essentially? Commodities. It’s the stuff we use every day to survive: oil, gasoline, agriculture, and copper.”

The central commodity for all of us is oil, Hyman explains. “Americans may not be able to tell you what sugar costs, but they can usually tell you

Matthew Tuttle, a regular expert contributor to The Franklin Prosperity Report, is the CEO of his own firm, Tuttle Wealth Management, located in Stamford, Conn.


how much they’re paying for gasoline. Aside from housing and food, it’s one of the largest costs that we incur each month,” he says. Oil is the funda-mental ingredient in plastic, as well, so it’s a huge part of the economy besides energy.

A way to profit from the rise in oil is to invest in major oil-exporting countries. Most people think that means buying into the Middle East, but

that’s just not true, Hyman explains. In fact, we import most of our oil from Canada and Mexico.

“As oil goes up, the dollar goes down. However, the Canadian dollar and Mexican peso also follow oil as it heads higher,” Hyman explains. He recom-mends ETFs that track these two currencies: the

CurrencyShares Canadian Dollar Trust (FXC) and the CurrencyShares Mexican Peso Trust (FXM).

Approach No. 7: Buy gold or a similar “anti-dollar” asset.Newsletter editor David Skarica is a strong proponent of gold and gold stocks as a strategy for getting away from dollar risk. His Gold Stock Adviser newsletter, published by Newsmax, is a good source of actionable advice for those seeking gold stock positions.

Some investors, he admits, might be skittish about gold, which has been volatile in 2011. (For those interested in buying gold for their portfo-lios, we do list the most common gold-bullion ETF options in the “Investing” section on Page 10.)

Beyond gold, Skarica’s advice is to consider other ways to diversify, and soon. “The U.S. dollar has been in a long-term decline. It has been in decline for the past 10 years and some would say for over 40 years against some currencies,” Skarica says.

Like Hyman, Skarica sees a clear exit from the buck in foreign currency ETFs. “As currency fluctuations are usually not as volatile as stocks or gold, they are a nice, conservative way to play the decline in the dollar,”

he explains.

Two of the currencies Skarica likes are the rupee and real. “Both of these countries have strong, fast-growing economies with little consumer debt. Both have much higher real interest rates than the United States,” Skarica says. He recommends

the WisdomTree Dreyfus Indian Rupee Fund ETF (ICN) and WisdomTree Dreyfus Brazilian Real Fund ETF (BZF). An alternative to currency funds are foreign bonds, Skarica says.

“Right now, all we hear is doom and gloom about the West. However, what people are failing to notice is that many foreign countries, especially in emerging markets, are actually seeing debt upgrades,” he says. “They have

David Skarica is a noted precious metals market investor and editor of two Newsmax financial services, The Gold Stock Adviser and The Gold Stock Adviser Pro.

Sean Hyman is an investing expert specializing in currencies and commodities. He is also a member of the Newsmax Financial Brain Trust.


high inflation rates, but those should come down as these economies become more advanced. In addition, that should mean that long-term rates come down and you get great returns on your bond investments.”

Finally, consider investing in countries with high levels of natural resource exports. “These currencies are the ones that are rising against the U.S. dollar, plus their shares will outperform as their markets are more related to commodities, which are in a major bull market,” Skarica says.

Two conservative ways to play this are the Australian and Canadian econo-mies, he advises. “Both are safe Western economies with a big exposure to commodities markets.” He suggests that investors consider iShares MSCI Canada Index Fund (EWC) or the iShares MSCI Australia Index Fund (EWA).

— Reporting by Greg Brown

Trash or Treasure? How to Turn Clutter Into CashGot a crowded closet, overstuffed attic, or jampacked garage that’s driv-ing you crazy? Feeling squeezed out by too much “stuff”? Wondering whether

it’s time to declutter and maybe make a few extra bucks along the way?

Geralin Thomas, who has served as a “hoardganizer” on the A&E TV show Hoarders, says there are a few easy ways to determine whether it’s time to clear out:

• You’ve run out of shelf, closet, counter, or drawer space.

• You’re renting a storage unit full of stuff with no future plans on how, why, or when to use it.

• You’ve stopped enjoying or using your possessions.

• You no longer want to take time to care for your items, so you stuff them in a closet, drawer, the back of the garage, a corner of a basement, or a crawl space.

If any of those instances sound familiar, Thomas says, read on.

Step 1: Sort Out What’s Sellable and What Should Be DonatedAs you’re wading through years of memorabilia, clutter, or junk, group “like” items to gain organizational control over a space and make assess-ing each item’s potential financial worth easier.

That way, if you’re planning on selling, you’ll have a better idea what to charge, and if you’re donating, you’ll be able to determine the current value so you know what charitable contribution to claim on your taxes.

Geralin Thomas is a nationally known professional organizational consultant who has served as a “hoardganizer” on the A&E TV show Hoarders.


However, be wary of the tendency to overestimate value. “Most people think their stuff is worth more than it is, so they want more money than they’ll be able to get,” Thomas warns.

Some of the most common things people think are valuable but aren’t include the following:

• Quarter collections (a quarter from all 50 states)

• Stuffed animals, especially those won at carnivals and amusement parks

• Dolls (most are mass-produced)

• Baskets

• Artwork from department or discount stores like HomeGoods and T.J.Maxx

• Cut glass that looks like crystal

• Clothes that aren’t designer labels

• Books (unless they’re first editions or signed by best-selling authors)

• Personalized items (while an autograph signed to your uncle is great, a simple signature is far greater when it comes time to sell)

“These things are best donated to save you time and frustration,” Thomas says. As far as books, if you have a lot of them and have a yard sale planned for the very near future, they’re best on a “free” table as “bait” to attract yard-sale shoppers.

Step 2: Set Your Asking PricesTchotchkes, collections and groups, and antique or vintage furniture hold the most potential. So as you’re giving things the “once-over,” look for maker’s marks, signa-tures, labels, and other identifiers of an item’s age, rarity, or authenticity. These are clues that an item may net you some cash.

“Maker’s marks and labels significantly influence value,” says professional estate coordinator Cathy Rissler, president of Total Estate Solutions in Atlanta. “Look for them on the backs and bottoms of things like china, stemware and flatware, and metal-ware like pewter and silver, ceramics and pottery.”

Then research the prices of similar new or used pieces at sites like Replacements.com

Ben’sOnline Picks

www.CraigsList.com: This is an expansive site that lists local classified ads, where you can buy and sell items, anything from crafts to furniture.

www.eBay.com: This is the world’s most well-known online auction site, where you can bid on products to buy or sign up as a seller and post items to sell.

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and auction sites like eBay or by perusing similar items at antique or vintage stores. In most cases, researching an item’s name, model identifi-cation, and/or any unusual markings will give you a good sense of the high, low, and average sales prices for the item in the current marketplace.

On eBay, you can use the closed items search tool that’s made available for free with registration to research the entire eBay database and see the final sales prices for any items sold worldwide on eBay in a two-week period. So whether it’s a weight bench, silver platter, or set of dishes, it’s smart to go into a sale knowing what the item is worth.

And keep in mind, size does often matter. “Serving dishes will sell more than dinner plates, which sell more than salad plates, etc.” Rissler points out. If you have the original box for flatware, china, and serving pieces, that increases the price, too.

Obviously, if the item is new, unused, or in mint condition, the value goes up. Conversely, if it’s barely hanging together, has lots of nicks, cuts, scratches, chips, pieces missing, etc., that lowers the value. (If you think about it from a buyer’s perspective, it makes perfect sense.)

The completeness of an item is equally important. “Having all its acces-sories, parts, original paint or mechanisms, packaging and boxes increases the value, too,” Rissler says. “And collections and groupings, like stamps, coins, and war memorabilia, are often worth more when kept as a set.”

If you suspect you’ve got a treasure trove of valuables, an option to “guesstimating” value is consulting a professional appraiser.

“Look for an appraiser that follows the Uniform Standards of Professional Appraisal Practice, the generally accepted standards for professional appraisal practice in North America,” Rissler says. This will give you peace of mind that you’re getting an accurate appraisal.

Step 3: Find Your Sales OutletEven if your stuff doesn’t have maker’s marks or is gently used, your “junk” can still amount to a windfall. When Kelly Hayes-Raitt, of Santa Monica, Calif., cleaned out her garage, she made more than $1,000 selling the items on craigslist.

“I sold nothing for more than $200, and most of the stuff sold for less than $100,” she says. “But all the little things really added up. I was really glad I kept track of everything so I could see how much I made.”

“Ahouseisnotahomeunlessitcontainsfoodandfireforthemindaswellasthebody.”

Ben’s Good Cents


Here’s a look at some items Hayes-Raitt sold and the amounts she received for them:

• $40 for a box of old office supplies

• $55 each for old original iMacs bought for a movie set

• $90 for old record albums sold to a resale store

• $12 for a rolling backpack

• $12 for a computer bag

“I also sold file cabinets, a bookshelf, a scuba wet suit, and so much more,” she says.

Yard sales are popular avenues to turning clutter into cash, but they depend on the weather and traffic. That’s why many have turned to the Internet instead of sticking “garage sale” signs in their front yard. Craigslist and eBay are two of the most popular sites to sell clutter, and both have pros and cons.

On eBay, you have to pay a listing fee and a portion of the item’s sale price as a commission. Meanwhile, on craigslist, you can’t vet perspec-tive buyers to gauge whether they pay promptly. You should look into both, among other online options, and see which one you feel the most comfort-able with.

Step 4: Put Marketing Into ActionOnce you know where you’re going to sell, it’s time to market your goods. And the best way to do that is with great photos. Franco Lagudi, founder and CEO of SOCExchange.com, has these tips to make the most of an online sale:

• Use a digital camera to photograph your items against a neutral back-ground such as a large sheet of oak tag paper or a light-colored wall.

• Make sure there is plenty of natural light — set the item (if possible) on a table in front of a window or outside.

• Use a close-up or macro setting if your camera has one. Some cameras even have a special setting for taking photos of products you want to sell online.

• Take several photographs of each product from different angles to high-light details that will be attractive to buyers.

• Take photos of any damage or wear for prospective buyers to best gauge the condition of the product. Being upfront in this way helps avoid returns later.

— Reporting by Gina Roberts-Grey


Investing

How to Add Gold to Your Portfolio Through ETFsIt doesn’t take a high degree of market insight to know that gold has been a hot investment lately. Prices have soared in the past few years, and long-term gold bulls — like Newsmax’s Gold Stock Adviser newsletter editor David Skarica — see plenty of room left to run for the precious metal because of large sovereign debts and plenty of currency printing in the U.S.

If you want to add gold to your invest-ment holdings, there are two major ways: You can slowly stockpile physical gold in your home or some safe location, or you can take the easier route, investing through a gold-bullion exchange-traded fund. ETF’s are securities purchased like a stock that give shareholders partial ownership of an index or a basket of assets, in this case, gold.

The first thing to remember when investing in a gold ETF is to pick one that is backed by the actual metal and not by gold deriva-tives, such as swaps or futures contracts, says Larry Rosenthal, president of Financial Planning Services in Virginia. “I like ones that are backed by the metal itself because they tend to be spot on and they don’t usually trade at too much of a premium to the metal, rather than others that are not backed by the metal and tend to get a little frothy,” Rosenthal says. Investors can find ETFs backed by the metal by checking a brochure or prospectus.

Popular gold-focused ETFs include the SPDR Gold Trust (GLD), which purchases 400-ounce gold bars from London Good Delivery Bars, and it issues the shares at one-tenth of the price of an ounce of the gold; the ProShares Ultra Gold (UGL), a more risky ETF designed to double the investment return of gold bullion; the Market Vectors Gold Miners ETF (GDX), which seeks to mirror the NYSE Arca Gold Miners Index; The Central Fund of Canada (CEF) and the Central GoldTrust (GTU), managed by the Canadian Imperial Bank of Commerce; and iShares Gold Trust (IAU), which is also backed by physical gold.

Ben’sOnline Picks

www.StateStreetSpdrs.com: This site includes more information on the SPDR Gold Trust (GLD), an ETF that allows for a direct investment in gold bullion.

ProShares.com/funds/ugl.html: Here you can learn more about the gold-bullion ProShares Ultra Gold (UGL) ETF.

www.VanEck.com: The Market Vectors Gold Miners ETF (GDX) is a product of Van Eck Global. Type “GDX” in the upper-right-hand search box and hit “enter” to find more information.

www.CentralFund.com: The Central Fund of Canada is an investable fund that holds gold and silver bullion on a secure basis, with shares traded under the ticker CEF.

www.iShares.com: The iShares Gold Trust ETF (IAU) is a gold investing fund that seeks to track the day-to-day movements in the price of bullion. Search “IAU” in the site’s search box for more information.

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Retirement

Four Alternatives to AARP Membership for Those Who Hold Conservative Political ViewsTired of the left-leaning politics of the AARP? You’re certainly not alone. CBS News recently reported that tens of thousands of former AARP members have jumped ship to join one of several organizations that help people get the best available deals on everything from Medicare supplemental plans to travel deals, all without promoting an AARP-like liberal agenda. The following four organizations aim to be an AARP alternative:

1. American Seniors AssociationTouting itself as “the conservative alternative to the AARP,” the American Seniors Association’s goals are reforming Medicare and Social Security, stopping illegal immigration, and writing an easily understood and simpli-fied tax code in the form of the fair tax. The group has no minimum-age requirement.

ASA partners with the Georgia Tea Party, Tea Party Patriots, the National Rifle Association, the American Family Association, and Americans for Prosperity, as well as with financial services firms that offer credit cards, mortgages and reverse mortgages, and various types of investments. The group offers low rates for Medicare supplemental policies that allow policyholders to visit any doctor or hospital anywhere in the nation, as well as medical, dental, life, long-term care insurance, pet insurance, auto club and travel benefits, discounts on brand-name and generic drugs through a large network of pharmacies, and identity theft protection.

Of particular interest: ASA’s cancer benefit can provide valuable financial support during cancer treatments and recovery, helping you protect your income and savings from expenses not covered by your medical insurance, including cancer specialists, experimental cancer treatments, deductibles, travel and lodging to treatment centers, and personal home care.

Cost: $15 a year / Contact: www.americanseniors.org, 800-951-0017

2. The Association of Mature American CitizensThe AMAC is a conservative, nonpartisan organization looking out for the interests of Americans 50 and older. Discounts for AMAC members include hotels and motels at more than 7,000 locations across the country, auto and homeowners insurance, dental insurance, and car and truck rentals, as well as discounts at a large number of national retailers.

The group says its local discount offerings have been well-received in the smaller markets it has tried in New York state, as well as central Florida. The organization now aims to expand the program to every town in the U.S., although a timetable for that is still in the works.


Of particular interest: Beyond Perks offers members up to 30 percent cash back when they shop at more than 1,000 online retailers, and it also offers coupons for local stores.

Cost: $16 (1 yr.), $42 (3 yrs.) / Contact: www.amac.us, 888-262-2006

3. Generation AmericaFounded in 2009, Generation America has members in all 50 states. In addition to supporting tax, Social Security and Medicare reform, the group aims to repeal the Patriot Act and Patient Protection and Affordable Care Act (Obamacare), promote affordable health care through deregulation and compe-tition, institute a balanced budget amend-ment, and end “cap and trade” legislation and government bailouts.

A sample of insurance costs for residents living in 78746 ZIP code show annual premi-ums of $79.50 for roadside assistance and $1,266.36 for medical insurance.

Of particular interest: Generation America’s website has a helpful news page that covers everything from fitness to financial topics.

Cost: $24 per year / Contact: www.generationamerica.org, 877-687-4362

4. American Senior Benefits AssociationFormerly the American Small Business Association, the American Senior Benefits Association membership stands at more than 700,000. “As the baby boomers age, it’s only natural that they will look for organizations that will serve their changing needs,” says Bill Hill, president and chairman of the board of ASBA.

The group offers information and help with elder care, financial services, fitness, health and wellness, health discount programs, home improvement/organization, insurance, reading, shopping, technology, and travel.

In the past year, ASBA introduced programs to help boomers and seniors obtain dental coverage through Delta Dental, address accidents and illness while vacationing, decipher complicated medical bills, obtain long-term care assistance, and evaluate their Medicare Part D coverage.

Of particular interest: ASBA family members can apply for a scholarship grant up to $1,000. “The program is one of ASBA’s most popular,” Hill says.

Cost: Free / Contact: www.asbaonline.org, 877-906-2722

Ben’sOnline Picks

www.AmericanSeniors.org: The American Seniors Organization is a right-leaning senior services organization, billing itself as a “conservative alternative to the AARP.”

www.AMAC.us: The Association of Mature American Citizens is another conservative alternative to AARP membership.

GenerationAmerica.org: Generation America is a benefits and advocacy organization for Americans 50 and older.

www.ASBAOnline.com: The American Senior Benefits Organization is a not-for-profit advocacy and education organization focused on Americans 50 and older.

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Spending

How to Choose Between Rewards Checking and a CDTorn between a rewards checking account and a CD? Tired from running all over town trying to figure out where you’ll get the best rates?

If you typically do your banking online, rewards checking may be for you. “Rewards checking is a checking account with no monthly fees, no minimum balance and the opportunity to earn a high Annual Percentage Yield (APY) and ATM fee refunds when certain criteria are met,” says Debbie McLamb, manager of retail and branch support at Crescent State Bank in Cary, North Carolina. “If a customer doesn’t do their banking online and doesn’t want a debit card, we steer them away from rewards checking accounts.”

That’s because most rewards accounts require making a minimum of 10 debit/check card transactions a month and having at least one direct deposit or authorization of one automatic payment from an account. “Customers are generally not charged for online checking and online bill pay,” says McLamb.

One primary advantage rewards checking accounts have over CDs is the abil-ity to withdraw your money at any time. “So if you need cash or see a better opportunity, you’re not locked in,” says George T. Conboy, president of the financial planning firm Brighton Securities in Rochester, New York.

There are downsides of rewards accounts. “Customers sometimes assume that when they use their debit card for the tenth time on the day before their statement cycle ends, they have met the 10 debit/check card transactions requirement, when in fact they have not,” McLamb warns. “Sometimes when you swipe your debit card, it can take two to four days to post to the account, so these transactions are counted on the next cycle.” In other words, you have to pay close attention to meeting the requirements.

As for Certificates of Deposit, McLamb says the basic CD customer is someone who wants the secure feeling that the rate of return will remain constant until the maturity date. “CDs pay a higher APY than rewards accounts and standard savings accounts, so they’re a good choice for customers with substantial savings,” she explains. “CDs with longer maturities pay a higher APY than those with shorter maturities, of course, and often have minimum investment requirements.”

On the other hand, CDs are restrictive. If you need your money before your CD matures, you’re likely to pay a steep penalty.

Ben’sOnline Picks

www.BankRate.com: BankRate is a leading online financial information publisher, aggregating market rates on mortgages, CDs, savings accounts, and more.

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Before stashing your cash in a CD, it pays to compare yields, and to decide how liquid you need that money to be. For rate comparison tools, try www.bankrate.com.

The Dos and Don’ts of Buying in BulkEvery budget-conscious shopper knows bulk shopping can be either your best friend or your worst enemy — the difference is in knowing what to buy and what to avoid. Here are 10 tips for getting the most out of your next shopping trip from Jackie Warrick, president and chief savings officer of CouponCabin.com.

6 Things to Always Buy in Bulk:

Paper goods. Demand has been known to exceed supply for paper towels and toilet paper at crucial times in everyone’s life. Stock up and minimize those moments.

Toothbrushes. “You only get a free toothbrush from your dentist twice a year, but you’re supposed to change your toothbrush four times yearly,” Warrick says. “Why spend $4 a pop when you can save on a larger amount?”

School supplies. Parents hate the mad rush for pens and notebooks every August, Warrick says, so it makes sense to stock up on items you know your

kids will need throughout the year.

Coffee. Buying your favorite brand of coffee in bulk saves money. “You can put it in the freezer to extend the shelf life,” she says.

Feminine care products. “You know you’ll need them every month, so why (make) constant trips to the store? Stock up and save money,” Warrick says.

Razor blades. If you know you’re going to need them sooner or later, buy them sooner and use them later. “Those are pricey, and they do get dull pretty often,” Warrick says. “So buying in bulk definitely makes sense.”

4 Things to Never Buy in Bulk:

Cleaning products. They lose their effectiveness over time, so buy what you need, use it up, then buy what you need again.

Diapers. “You don’t know how quickly your baby will grow, so you might need a different size before you use them up,” Warrick explains. Instead of buying in bulk, use coupon codes at stores like Target.com and Diapers.com.

Produce. It makes more sense to buy only a few days’ worth of fresh produce at a time to avoid spoilage.

Vitamins/medicine. They carry expiration dates on the label for a reason. “If you take expired products,” Warrick says, “you could get sick.”

Jackie Warrick is president and chief savings officer of CouponCabin.com, a consumer website that provides links to online and printable coupons.


Your Home

Be Wary of These Typical Listing Agreement ClausesThough many realtors will tell you that listing agreements are “standard,” most of the terms can be negotiated, and some terms you shouldn’t agree to at all, experts say. Here’s a rundown of what to be watchful for:

1. Length of the agreement: Chief among terms to take a look at is how long the listing agreement will be in effect, says Seattle real estate professional Julie Clark. “Sellers need to be able to hire a new selling or leasing agent, if needed,” Clark says. “I think three to six months is an appropriate period, since the listing agreement can always be renewed with the same person as needed.”

2. Marketing updates: Reporting and updates that specify how the market-ing efforts are measured are not a feature of most standard listing forms, Clark says. “To avoid frustration and confusion, it’s smart for sellers to outline how often they want to receive marketing reports and status updates from the agent or broker.”

3. Commission rate: Commissions, Clark says, are always 100 percent negotiable, and sellers can incentivize their agents or brokers by offering a higher percentage commission if the property sells for more than expected.

4. Payment parameters: Larry Elkin, president of Palisades Hudson Financial Group LLC, cautions sellers to be aware that the language used to describe when and under what conditions the agent is paid can prove dangerous to their financial health.

“A standard listing agreement may include language that entitles the agent to be paid as long as the agent has produced a buyer who is ‘ready, will-ing and able’ to purchase the property,” Elkin says. This technically means that once the seller accepts an offer from the buyer and any contingencies have been satisfied, the agent gets paid even if the buyer backs out of the sale and forfeits a deposit.

Listing agreements also may entitle agents to a portion of the forfeited money, up to the amount of the full commission on a sale — and if the agent subsequently finds another buyer, the agent gets another commission, thereby collecting twice for selling the same house. “Owners, who must pay the cost of carrying the property while trying to arrange another sale, should seek to keep any forfeited money,” Elkin advises.

Things can get worse if the seller decides to cancel the contract after the agent brings a buyer. “A Midwest brokerage is currently suing one of our clients, a recently widowed woman in her 70s, for a substantial commission as well as punitive damages following a canceled sale,” Elkin says.


Dr. Franklin’s MailbagDr. Franklin’s MailbagEvery month, we ask readers for their best tips on making and saving money. The amounts don’t matter; it’s about little changes anyone can make to keep more cash in their pockets to save, invest, or spend better elsewhere.

Change We Can Believe InI save money in my checking account by the way I record checks and depos-its in the register. I record checks in the payment column in the exact amount, but in the balance column, I round the check amount up to the next even dollar amount. When I record deposits, I round them down to the next even dollar amount.

For example, a check for $27.17 is recorded in the balance column as $28.00. I’ve “hidden” 83 cents, which is then basically “saved” in the account. A deposit, say, of $435.91 is recorded in the balance column as $435.00. I’ve saved 91 cents.

Since amounts are always zeros in the cents column, it makes it faster and simpler to do the addition and subtraction. Over the course of a year, it’s fun to see the amount hidden in the account add up. The more checks and deposits, the faster it accumulates.

— Frank B., Gunnison, Colo.

Discounts on the Flip SideOur family is on a very tight budget, and I’m always on the lookout for freebies. I’ve discovered that always checking the back of receipts from restaurants can garner free food. (In my experience, Burger King is the most consistent for issuing such free coupons.) Also, in the case of retail stores, at times I’ve received discounts for taking simple surveys online or by phone.

— Rebecca M., East Lansing, Mich.

Print on the CheapRefilling inkjet printer cartridges at a Walgreens drug store will save you money, but here’s an even better tip: Buy your ink cartridges online from eBay.com aftermarket sellers. There are always a dozen or more of them offering really great prices, depending on what brand you’re after, and some are often as low as $1 or $2 each when you buy a 12-pack or 15-pack.

I’ve been purchasing my inkjet cartridges this way for years, and I have never had a problem with any vendors or their cartridges. Be sure to only buy from eBay’s highest-rated sellers and you shouldn’t have any problems. And often, you’ll get free shipping and charged no sales tax.

— Lewis J., Prescott, Ariz.

Brush Up on SavingsIf you are planning on some spring painting, indoors or out, and are somewhat flexible on the colors you use, I’ve found that you can save 75


SHARE YOUR SUCCESS! SHARE YOUR MONEY-SAVING ADVICE AND GET $50! Send your tips on saving, spending wisely, and investing to [email protected] or by regular mail to Franklin Tips, P.O. Box 20989, West Palm Beach, FL 33416. If we publish your idea, we’ll send you a $50 Walmart gift card.

to 90 percent on the cost of the paint if you buy cans that have been mistakenly mixed by store employees.

If asked, the employees are generally very eager to help and will give advice with what colors to mix to get the color you want. Generally, it is easy to come up with a variety of browns, grays and off-whites for larger quantities of paint and a gallon or two of almost any color for the trim. I’ve seen literally hundreds of gallons of paint in a mistake pile at the stores where I shop.

A note: Make sure that the cans you’re mixing are the same base. Acrylic base paints won’t mix with oil base paints, and you won’t want to use interior paints for exterior uses.

— Robert B., Medford, Ore.

Cosmetology and Dental for LessGo to your local community college to get great prices in the cosmetology department. Services are done by students in their final semesters and supervised by their teachers, so you have some guarantee of performance.

In my city you can get haircuts, including shampoo for $5, manicures for $5, and hair coloring for $16, plus many other services like facials, color strips, highlights, etc. At the places I’ve been to, if you take your own products, they even reduce the price by half.

In a similar fashion, our local dental training school offers a range of dental services, which are performed by supervised students at very reduced prices.

— Genaro A., El Paso, Texas

Step Up for Your HealthWalking is plenty rewarding on its own, of course — it can boost your mood, trim your waistline, and decrease your risk of heart disease. Now I’ve found a gadget to sweeten the deal: the S2H Step, a pedometer that rewards physical activity with points redeemable for cool products.

For every 10,000 steps you take — a daily goal endorsed by many health experts — the pedometer displays a code that grants you 60 points at S2H.com. Rack up enough, and you can nab retail gift cards (1,600 points for a $10 card), DVDs (2,650 points), and more.

The pedometer costs $24.95 plus shipping and handling, but there is no fee to participate in the rewards program. The S2H Step is available at S2H.com, Amazon.com, and Sears and Kmart retail stores.

— Angelika K., Cleveland


This being an election year, what did Ben Franklin think of elections and partisan politics? Besides being a businessman, publisher, inventor, scientist and man of letters, Franklin spent a good deal of his career as a statesman, legislator and lobbyist.

In fact, the final 33 years of his life were largely engaged in politics as colonial agent in London, signer of the Declaration of Independence, first ambassador to France, and delegate to the Constitutional Convention. “It is a singular thing in the history of mankind that a great people have had the opportunity of forming a government for themselves,” he wrote. “We are making experiment in politics.”

Yet, the longer he stayed in politics, the more he disliked it. He came to see adversarial political wrangling as dysfunctional and irrational, full of ambition and avarice. The battles in the Pennsylvania Assembly, the Congress and Parliament created many enemies who held grudges against him until the day he died, and long afterward. He split over independence with his own son, William, who remained a loyalist to the bitter end. His lost friendships with his British businessmen and scientists during the American Revolution. He hated war, and thought it should be the last option in political intrigue, not the first.

When he retired from his printing business in 1748, he became involved in his scientific studies and civic duties in Pennsylvania. He was a big supporter of what we would call today the voluntary “non-government orga-nizations” (NGOs), and helped organize the Library Company, the City Watch and Fire Company, the Academy (later the University of Pennsylvania), the Philosophical Society, the Pennsylvania Militia (voluntary and overtly democratic), and the Pennsylvania Hospital, among other projects. He used his influence in the Pennsylvania Gazette to promote these good causes.

Inevitably, such philanthropic ventures involved the local government, and he was elected to the Pennsylvania assembly several times in the 1750s, though he avoided direct campaigning for the office. He famous motto was “never ask, never refuse, and never resign an office,” although he violated it several times in his political career.

He was a steadfast believer in democratic representation and laissez-faire government — a “Republic,” if you will. For most of his career, he had immense faith in the common man who was moral and well educated. “A virtu-

Franklin MattersFranklin on the Benefits and Shortcoming of Politics

By Mark Skousen


ous and laborious [industrious] people may be cheaply governed,” he wrote. “The system of America is to have commerce with all, and war with none.”

He was in the forefront of fights over taxation and Indian squabbles with the Penns, the governors of Pennsylvania; he argued with the British over the Stamp Act and American independence; he tangled with John Adams, Arthur Lee and other commissioners when he was ambassador to France.

Throughout it all, Franklin was the consummate diplo-mat and master politician. He was the only commissioner in France successful in raising funds and supplies for the American troops. He was the primary negotiator for the Treaty of Paris with England after the war, and designed the Great Compromise during the Constitutional Convention of 1787.

His true mode was not to challenge enemies to battle but to try to win them over by persuasion. He learned the value of compromise after years of experience in business and deal making. He would often remain silent and not respond to personal attacks. Nevertheless, he lost many battles and created enemies along the way. He was often vilified by his countrymen, lost his position in the Assembly, and was fired as postmaster general and colonial agent by the British before the American Revolution started.

When in France, he wrote, “I resolved to have no quarrel, and therefore have made it a constant rule to answer no angry, affronting or abusive letter, of which I have received many and long ones from Mr. Lee and Mr. Izard [fellow commissioners of France]. I never answered them, but treated the gentlemen with the same civility when we met as if no such letters existed. No revenge was necessary for me; I need only leave them to hiss, bite, sting and poison one another.”

At the end of his career, he became a bit more pessimistic about party poli-tics and working for government. He wrote a friend, “I am of the opinion that almost any profession a man has been educated in is preferable to an office held at pleasure, as rendering him more independent, more a freeman and less subject to the caprices of superiors.”

Be free,

Mark Skousen, Ph.D., a sixth-generation grandson of Benjamin Franklin, is aneconomist and holds the Benjamin Franklin Chair of Management at GranthamUniversity.He’s theauthorofThe Compleated Autobiography by Benjamin Franklin, atomethatfillsinthe33-yeargapleftbyFranklininhisoriginalworkfromage51untilhisdeath,usingFranklin’sownpapersastheguide.

“Youcanalwaysemploy

yourtimebetterthanin

polemics.”


Ask Franklin

My 86-year-old mother co-signed a school loan for my niece several years ago. There is no forbearance left on the loan, and my mother has been making the minimum payments for the last year. My niece has no money to help, and my mom doesn’t have the money to keep paying, either.

I’ve heard that even if my niece files for bankruptcy, these loans don’t go away and will follow her forever. What will happen if my mom stops paying the loan? I know it’ll affect her credit, but that’s OK at this stage. Will the loans accumulate to infinity if the payments are stopped? We need some good advice.

— Kim M., Racine, Wisc.

Admittedly, your niece and mother are in a tough spot. According to Olga Criel, collections specialist with the National Student Loan Program, student loans are not dischargeable in bankruptcy and the loan will continue to accrue interest so long as your mother is alive. In the event of death, collection attempts will cease.

However, Criel did locate a couple of cases for us in which bankruptcy courts allowed the loan to be discharged along with other debts — that was because the borrower proved to the court’s satisfaction that continu-ing to make payments would create a severe financial hardship for the borrower.

If your niece does proceed with a filing for bankruptcy, she should discuss this situation with a bankruptcy attorney to determine whether your mother would have to file for bankruptcy, as well, in order for the court to consider a financial hardship argument.

The Franklin Prosperity Report is a publication of Newsmax Media, Inc., and Newsmax.com. It is published monthly for $99 per year and is offered online and in print through Newsmax.com and Moneynews.com.

The owner, publisher, and editor are not responsible for errors and omissions. Rights to reproduction and distribution of this newsletter are reserved. Any unauthorized reproduction or distri-bution of information contained herein, including storage in retrieval systems or posting on the Internet, is expressly forbidden without the consent of Newsmax Media. For permission, contact the publisher at P.O. Box 20989, West Palm Beach, Florida 33416.

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NEED EXPERT ADVICE? Email your ques-tions to [email protected] or send by regular mail to Ask Dr. Franklin, P.O. Box 20989, West Palm Beach, FL 33416.

America’s Health Crisis#1FACT: 79 million American adults have blood sugAr levels that, while

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