We Buy A Staggering Amount Of Clothing, And Most Of It Ends Up In Landfills

This article is part of HuffPost’s “Reclaim” campaign, an ongoing project spotlighting the world’s waste crisis and how we can begin to solve it.

“Too much of a good thing can be wonderful,” Mae West, the Hollywood actress and style icon, once famously quipped.

At a casual glance, you might think her quote would accurately describe the fashion industry. The availability of an endless supply of cheap clothing has unleashed a whirlwind of color and beauty, giving people the chance to express themselves ― even on a tight budget ― and stamp their identity on the world.

But the dark truth about the fashion business is that too much of a good thing is creating environmental destruction and human misery on an unprecedented scale.

Let’s be clear: There is nothing beautiful in seeing a river polluted by toxic dyes or a garment worker surviving on a pittance while toiling in dangerous sweatshop conditions.

The merry-go-round of new apparel ranges the industry spews out at a dizzying rate is fueling an addiction to clothes and a perceived need to constantly be at the cutting edge of fashion. As a result, people around the world collectively consume more than 80 billion items of clothing each year, and those items are increasingly seen as disposable.  

We need to slow things down and become more aware of the negative impacts of our actions. That does not mean taking the fun out of buying clothes. It just means becoming less impulsive in our shopping habits and thinking twice before paying $4.99 for another cheap top to add to our already cluttered closets.

In order to help in this process, The Huffington Post is today launching the second stage of our “Reclaim” campaign, which aims to examine and fight the world’s waste crisis. For the past two months we have focused on food waste, creating more than 180 articles and more than 20 videos. We will now be putting our attention on fashion.

The facts speak for themselves. Fashion is considered to be one of the most polluting industries in the world, and the 1,135 people who died in the 2013 collapse of the Rana Plaza building in Bangladesh are a constant reminder of the terrible conditions suffered by millions of garment workers around the globe.

Andrew Biraj / Reuters

People rescue garment workers trapped under rubble at the Rana Plaza building after it collapsed April 24, 2013.

Americans alone produced 15.1 million tons of textile waste in 2013, and around 85 percent of that ended up in landfills, according to the Environmental Protection Agency.

On average each American throws away roughly 70 pounds of clothing and other textiles per year, equivalent in weight to more than 200 men’s T-shirts. 

The scale of waste is no great surprise when you consider that retailers tend these days to focus more on price than quality, which means many garments may survive only a few washes. More than this, the constant change of styles leads to heavy markdowns as retailers need to get rid of stock to create space for the newest styles.

Those clothes that don’t get thrown away often end up in cheap markets in the developing world. This ever-growing mountain of garments prompted five East African countries earlier this year to announce they are considering banning the import of secondhand clothes because their own domestic garment industries have no hope of competing against them.

While the scale of the industry’s problems are immense, the good news is that there are many solutions out there and many more in development.

We are seeing an immense amount of innovation, ranging from the development of less toxic materials, to new technologies that can transform old clothes into new garments, in a similar way to paper recycling.

Environmental organization Greenpeace is campaigning for the apparel industry to eradicate toxic chemicals, and there is increasing pressure for garment workers to be given a living wage to support themselves and their families.

There is also an emerging movement, supported by organizations such as Fashion Revolution, to find alternatives to buying new clothes. These range from going to thrift stores, swapping clothes with your friends or work colleagues, and renting clothes for a special occasion.

Though retail giants seem unable to break out of the fast fashion system they have created, a number of them are taking action to make their products more sustainable. Nearly three-quarters of Nike’s footwear now contain materials made from waste products from its own manufacturing process; H&M is investing in new recycling technology and offering in-store collection points, where customers can deposit old clothes.

But much more needs to be done. First and foremost, the big fashion companies need to be more transparent about the environmental and social impacts of the products they sell. It’s no wonder customers keep shopping to the max if they don’t feel any connection between what they buy and the environmental and social impacts, which disproportionately play out in developing countries, where regulations tend to be lax and the public’s gaze doesn’t often turn.

Even if a piece of clothing is made from organic cotton, the customer has no idea of whether the factory that produced it treats its workers fairly or whether the dyes used are polluting local rivers.

But while the fashion industry has a clear responsibility to take action, just as important is the need for every one of us to become more responsible about the amount of clothing we buy. That means taking a moment to breathe every time we get tempted by the latest fashion ― or enticed by a new markdown ― and asking ourselves a few very simple questions: Do I really need this, will it make me happy and will it make the world more or less beautiful?

How To Learn And Master Any Skill Twice As Fast, According To Science

Whether you're trying to be pro at Photoshop, or step up your tennis game, or master a dueling banjo song, you're probably dutifully following the age-old advice that practice makes perfect.

However, contrary to popular belief, doing the same thing over and over again might not be the most efficient way to learn foreign concepts.

Traditionally, we're taught using the "blocking" strategy. This instructs us to go over a single idea again and again (and again) until we've mastered it, before proceeding to the next concept. But several new neurological studies show that an up and coming learning method called "interleaving" improves our ability to retain and perform new skills over any traditional means by leaps and bounds.

What interleaving does is space out learning over a longer period of time, and it randomize the information we encounter when learning a new skill. So, for example, instead of learning one banjo chord at a time until you perfect it, you train in several at once and in shorter bursts.

Below are a some practical ways you can use interleaving to train your brain to pick up new skills quickly and effectively starting today:

Practice multiple parallel skills at once

Whether you're trying to improve your motor skills or cognitive learning abilities, the key to transforming how your brain processes new information is to break out of the habit of learning one facet of a skill at a time. The advantage of this method is that your brain doesn't get comfortable or store information in your short-term memory. Instead, interleaving causes your brain to intensely focus and problem solve every step of the way, resulting in information getting stored in your long-term memory instead.

For example, one study gave a collegiate baseball team extra batting practice and broke them up into three groups: a control group, a blocked group, and a random group. The blocked group faced a variety of pitches in a set order, and the other group encountered pitches randomly. After six weeks, researchers found that the random group improved 56.7%, while the blocked group only improved 24.8%. That's a massive difference! And similar results have been replicated in other sports and classroom learning studies.

Interleaving doesn't cut any corners, so your brain is always on guard. Think of the difference between blocking and interleaving like a boxer who practices one move over and over again versus a boxer who practices by sparring in the ring. In the ring, you have to be ready for anything. It makes you faster, sharper, and more versatile.

Plan your lessons in advance

Since randomization and spacing out lessons are crucial to the interleaving process, try planning when and what you want to cover in a lesson in advance. As block learning is such a linear technique, we might not normally think to do this, but a little pre-planning will make adopting a new skill set go by much faster.

Think of it like pre-planning a workout. If you go to the gym without having a plan in mind, you can lose time and momentum by trying to decide what to do next. But if you know you want to work on legs that day, you can create a plan that will help you achieve that goal without missing a beat. When it comes to interleaving, this will keep you from getting frazzled with the new learning process.

Go back to basics

When we progress with a new skill, it's easy to forget to practice older material. But going back over the basics is an integral part of the interlearning process. Doing so strengthens our brains and reinforces our long-term memory of a skill. It also has the added benefit of spacing out learning and giving our minds a break from taking on a new concept right away. This will result in higher and faster retention overall. Even pros like University of Georgia's football coach, Vince Dooley, subscribe to this methodology when it comes to training.

Keep track of your progress

If you find interleaving to not be as immediately gratifying as the blocking technique is, don't get discouraged, you're not alone. In one study, "80% of students claimed that the block style helped them learn better, despite testing better when using the an interleaved method."

In some ways, interleaving feels counterintuitive because the wide majority of us were taught to get comfortable with learning one concept at a time through school. But sticking with it and monitoring your results in a measurable way is the best way to stay motivated and see that the proof is in the proverbial pudding.

Break out of your comfort zone

Often, we're gravitated towards repeated tasks that we already have a basic grasp of and exist in our comfort zones. The whole process of interleaving feels pretty uncomfortable at first, especially when you're trying skills from new angles and failing a lot.

When you realize that practice does not mean perfection, and that every step new towards finding a skill is a step forward (even if it seems like a step backwards), you'll have the winning attitude to use interleaving to your advantage.

By following these steps, you'll be able to use interleaving to your advantage and learn any skill at lightning speed like a champ.

At America's Largest Companies, Just 7 Percent Of CEOs Are Women

The visibility of CEOs like IBM’s Ginni Rometty, General Motors’ Mary Barra and Hewlett Packard’s Meg Whitman may give the impression that America’s largest companies are finally embracing female leadership.

But as a recent Fortune report reveals, that couldn’t be further from the truth.

Women comprise less than 7 percent of chief executives at Fortune 1000 companies ― America’s largest corporations based on revenue ― according to a recent survey conducted by sales analytics software company DiscoverOrg. “That means that for every [Rometty, Whitman, or Barra], there are a dozen male chief executives,” said Fortune.

Of the almost 10,000 C-level executives DiscoverOrg surveyed, just 18 percent were women. Only 6.7 percent of all chairs of the board, 7.2 percent of chief operating officers and 8.8 percent of chief financial officers were women.

Women are well-represented in two C-level positions, however: They make up almost half of chief marketing officers and more than 60 percent of chief human resources officers, according to the survey.

“You sort of wonder if women are being pigeonholed,” DiscoverOrg’s co-founder, Henry Schuck, told Fortune.

Chip Somodevilla/Getty Images

Nancy Pelosi, center right, was the first female Speaker of the House. She served in the role from 2007 to 2011. 

The gender leadership gap is not limited to Fortune 1000 companies. According to a recent American Association of University Women study, women remain “underrepresented at all levels of leadership” in the U.S., from the realms of politics to education. 

Women make up only 1 in 5 members of the U.S. Congress, the study said. As of 2012, only 26 percent of colleges and universities were headed by women. 

Women of color hold even fewer leadership positions. Last year, less than 3 percent of board directors at Fortune 500 companies were Asian, black or Hispanic women.

“To achieve gender parity, we need women willing and able to take up leadership positions. We need men willing and able to take on more domestic responsibilities so that more women have the opportunity to pursue demanding fields,” the AAUW wrote in its report. “We need employers to embrace a more flexible workplace, allowing women and men to move in and out of the workforce as they balance careers, family, and personal goals. In essence, we all need to intentionally engage in making diversity and inclusion work on a daily basis.” 

11 Surprising Habits Of Powerful People

Power gets a bad rap, but only because people pursue it for the wrong reasons. When power is pursued for the right reasons, it can be a tremendous force for good.

Niccolo Machiavelli spread the belief that people can only become powerful by exploiting the worst aspects of human nature. One of this teachings was, "A wise ruler ought never to keep faith when by doing so it would be against his interests." Machiavelli was essentially saying that you're an idiot if you keep your promises or stick to your values when you'd benefit more by breaking them.

Not only did we hear it from Machiavelli, but also from plenty of voices in our own time, such as Robert Greene, who said, "The key to power is the ability to judge who is best able to further your interests in all situations." It's no wonder so many people think that the only way to get power is to be a jerk.

Fortunately, Machiavelli and Greene had something in common: They were both wrong. Recent research from UC Berkeley shows that when it comes to power, nice guys finish first. The researchers found that the most powerful people (according to ratings from their peers) were those who were the most considerate and outgoing. They also found that those who were the most Machiavellian -- using things like gossip and manipulation to gain power -- were quickly identified and isolated and ended up with no power at all.

Studies like these are rehabilitating power's bad rap. Power isn't inherently evil, and it isn't inherently bad to seek power. Without power, you can't accomplish anything, good or evil. Even those who want nothing more than to make the world a better place, can't do so without exerting the influence of personal power. It's the abuse of power and the underhanded things people do to achieve it that cause problems.

People who earn and use power wisely have a profound impact on everyone they encounter. Yet, they achieve this power only because they exert so much influence inside, on themselves. We see only their outside; we see them innovate, speak their mind, and propel themselves forward toward bigger and better things. Yet, we're missing the best part. The confidence and wherewithal that make their influence possible are earned.

And while what people are influenced by changes with the season, the unique habits of powerful people remain constant. Their focused pursuit of excellence is driven by eleven habits, which you can emulate and absorb until your power and influence expand:

1. They don't wait for a title to lead. It's important not to confuse power with authority. The right title can give you authority, but it can't give you power. On the other hand, you don't need a title to be powerful. You can lead without being a boss and you can have a powerful influence upon your workplace and community without a title.

2. They're graciously disruptive. Powerful people are never satisfied with the status quo. They're the ones who constantly ask, "What if?" and "Why not?" They're not afraid to challenge conventional wisdom, and they don't disrupt things for the sake of being disruptive; they do so to make things better.

3. They think for themselves. Powerful people aren't buffeted by the latest trend or by public opinion. They form their opinions carefully, based on the facts. They're more than willing to change their mind when the facts support it, but they aren't influenced by what other people think, only by what they know.

4. They focus only on what really matters. Powerful people aren't distracted by trivialities. They're able to cut through the static and clutter, focus on what matters, and point it out to everyone else. They speak only when they have something important to say, and they never bore people with idle banter.

5. They master conflict. People tend to err on one of two extremes when it comes to conflict: some are passive and avoid conflict altogether, while others seek out conflict aggressively, thinking that this will make them powerful. People who master conflict know how to approach it directly and assertively, yet constructively. In essence, they practice emotional intelligence. Truly powerful people do not react emotionally and defensively to dissenting opinions -- they welcome them. They're humble enough to know that they don't know everything and that someone else might see something they missed. And if that person is right, they embrace the idea wholeheartedly, because they care more about the end result than being right.

6. They inspire conversation. When powerful people speak, their words spread like ripples in a pond. Influencers inspire everyone around them to explore new ideas and to think differently about their work.

7. They know their strengths and weaknesses. People who get seduced by power and, therefore, start abusing it are often blind to their own weaknesses. To become truly powerful, you have to see yourself as you really are and to position yourself to use your strengths for the greater good. That means taking a clear-eyed look at your strengths and your weaknesses and owning them both completely.

8. They grow and leverage their networks. Those who grow power the Machiavellian way don't bother with people who aren't useful to them. People see this coming a mile away, and it doesn't win any friends. Truly powerful people know how to make lasting connections. Not only do they know a lot of people, they get to know their connections' connections. More importantly, they add value to everyone in their network. They share advice and know how, and they make connections between people who should get to know each other.

9. They ask for help when they need it. It's easy to mistakenly assume that powerful people never ask for help from anybody. Asking for help when you don't know the answer or can't do it all by yourself is not a sign of weakness; it's a sign of strength. It sends the message that you're not so insecure as to put your ego above the mission. It takes a tremendous amount of confidence and humility to admit that you need assistance, and asking for assistance is critical, because there's nothing worse than trucking down the wrong path when you're too embarrassed or proud to admit that you don't know what you're doing.

10. They believe. Powerful people always expect the best. They believe in their own power to achieve their dreams, and they believe that others share that same power. They believe that nothing is out of reach and that belief inspires those around them to stretch for their own goals. They firmly believe that one person can change the world.

11. They do it now. Way back in 1894, Orison Swett Marden made an important point: "Don't wait for extraordinary opportunities. Seek common occasions and make them great. Weak men wait for opportunities. Strong men make them." If you put off growing your power until the right opportunity comes along, it's never going to happen. Powerful people know that developing power is a lot like lifting weights or running a 5K. The only way to strengthen those muscles is by using them, so stop making excuses and just start. You know what you believe in, you know who you are, and you know what you want to become, so act like it. Yes, it will be uncomfortable at times, and yes, some people will tell you you're doing it wrong, but the only way to achieve power and use it for good is to get out there and do it.

Bringing It All Together

Boris Yeltsin once said, "You can make a throne of bayonets, but you can't sit on it for very long." Forget everything you've heard about power, because, in the end, the nice guys really do win. Whether you call it power or influence, it's okay to want it and it's okay to have it. You just have to pursue it and use it with integrity.

Have you seen people abuse power? Please share your thoughts in the comments section below, as I learn just as much from you as you do from me.

Now You Can Do Your Thrift Shopping Online, And It's About Time

This article is part of HuffPost’s “Reclaim” campaign, an ongoing project spotlighting the world’s waste crisis and how we can begin to solve it.

A slew of successful online secondhand stores has made it easier than ever for consumers to buy and sell old clothing.

The leaders of the upstart industry tout the environmental benefits of this new kind of thrift shopping experience. But will it be enough to meaningfully reduce the staggering amount of textiles pouring into our landfills every year, or is it just a way for savvy shoppers to ease their guilty consciences about the waste they produce?

For now, clothing resale is too small-scale to make a dent in landfill waste. And even if it does, it should not be confused for an environmental panacea. But if it forces us to question the way we shop and rethink the way we get rid of our old stuff, it’s a step in the right direction. 

David Goldman/ASSOCIATED PRESS

Shoppers at an H&M store in Atlanta. H&M is one of the big retailers known for "fast fashion," constantly introducing new styles at low prices.

“Even if we manage to come up with the ultimate technology solution, the positive impact of all of that is still outweighed by the amount that we produce and consume,” said Renée Cuoco, manager of the Centre for Sustainable Fashion at the London College of Fashion. “We need a whole scope of initiatives.”

For a variety of reasons, consumers in the developed world often have more clothing than they know what to do with. The rise of “fast fashion,” in which big retailers like H&M introduce new styles more frequently and at low prices, has accelerated this trend.

The short shelf life of many garments has major implications for the environment.

Americans threw away 15.1 million tons of clothing in 2013, with 12.8 million tons of it ending up in landfills, according to the Environmental Protection Agency.

Landfills are a top generator of methane gas, which contributes disproportionately to climate change.

Methane made up 11 percent of U.S. greenhouse gas emissions in 2014, according to the EPA. But methane traps warming in the atmosphere far more effectively than other GHGs, giving the gas a “global warming potential” that the federal environmental watchdog says is 25 times that of carbon dioxide.

A New Model For Thrift Shopping

Digital secondhand clothing and consignment stores did not arise to save unwanted clothing from landfills ― and the industry does not claim otherwise.

But San Francisco-based ThredUP, which may be the largest online outfit for secondhand clothing, markets the positive environmental impact of using its services.

“If 1 in 100 American households shopped resale, it would save over 1.1 billion pounds of CO2 emissions every year,” the company’s annual resale report notes.

There is no concrete data on how much ThredUP and comparable services like eBay Valet and Poshmark have actually reduced the amount of clothing sent to landfills.

By effectively “Uber-izing” the thrift store experience, however, these outfits enable people who might not otherwise want to deal with the hassle of brick-and-mortar thrift stores to clean out their closets without leaving the house.

If the model becomes very lucrative, it can change the market.Tasha Lewis, Cornell University

To send clothing to ThredUP, for example, all consumers need to do is order a “clean out kit” (essentially a free bag), fill it with unwanted clothes and send it to the company. The company only resells clothing and accessories that are “like new,” so it rejects about 60 percent of what it receives and offers to return the rest to senders or give it to other thrift shops or clothing recycling entities.

Once ThredUP has inspected an item and decided it is suitable for resale, it professionally photographs it and lists it on the site. The price is based on quality, original retail price and other factors.

For items that sell for under $60, ThredUP pays sellers between 5 and 40 percent of the list price up front, with the cheapest items offering the smallest payout.

ThredUP has a consignment system for items it lists for $60 or more, offering as much as 80 percent to consigners once the company succeeds in reselling an item. (The shipping and handling costs of sending the ThredUP “clean out kit” are deducted from whatever payout the company provides.)

ThredUP

ThredUP allows consumers to shop for high-quality secondhand clothing without some of the hassles of traditional thrift stores.

ThredUP’s business is booming: It has resold over 10 million items and at least doubled its revenue every year for the past several years, according to Chief Marketing Officer Anthony Marino.

That can only have a positive impact on the U.S.’s landfill waste problem.

But there is a catch. Although the company’s selectivity is the formula for its successful business model, it demonstrates how difficult it is for secondhand clothing sites to turn online clothing resale into a profitable business.

ThredUP does not buy or sell men’s clothing, serving women and children only. The company told HuffPost it focuses on women because men’s clothing makes up a much smaller share of the resale market.

Until the economics of the business allow online secondhand shops to make up a bigger share of clothing sales, there are limits to their impact on waste.

“If the model becomes very lucrative, it can change the market,” said Tasha Lewis, a professor specializing in fashion sustainability at Cornell’s College of Human Ecology. “The only obstacle is the scale of these programs, and they are constrained by quality, size and color of the things they get.”

More Innovations, Persistent Challenges

Meanwhile, some brick-and-mortar retailers are trying to do their part to address waste with in-store recycling programs. Patagonia invites shoppers to return old clothing and sells used products on-site.

H&M also allows shoppers to return worn clothing to stores, where the retailer sorts it for resale or recycling.

One risk, however, is that clothing that gets offloaded to local thrift stores by major retailers or higher-end online secondhand sites will sit idly on shelves, too, and eventually end up in a landfill anyway. Unwanted clothing can also end up getting exported to developing countries, where it risks undermining local textile industries.

A way around that problem would be ensuring that clothing is made from recyclable material. For example, cotton and polyester blends, commonly used in items like T-shirts, are impossible to recycle.

Last March, H&M and Kering, the parent company of Gucci and other luxury brands, announced a partnership with technology startup Worn Again that aims to speed up that process. The companies will be “monitoring the testing” of technology developed by Worn Again that separates fibers and removes dyes and other chemicals that prevent textile recycling.

Some popular styles are impervious to this kind of innovation. Leather, a material with one of the most opaque supply chains, is not recyclable. (Though it is compostable in some circumstances.) Making it more sustainable, according to Cuoco, would likely mean phasing it out of our wardrobes altogether ― which, it’s safe to say, is not going to happen anytime soon.

Bloomberg/Getty Images

Discarded clothing contributes to landfill waste -- which emits methane, a greenhouse gas that's especially effective at trapping heat.

Even if all clothing becomes recyclable, there are limits to the environmental benefits of technological innovations.

It’s possible that after consumers clear their closets by reselling or recycling clothing, they’ll feel freer to buy more brand-new clothing, lessening the effect of the overall recycling trend.

Advanced recycling technology also requires energy and resource expenditures, which would have to be weighed against emissions savings from reducing landfill waste.

And, of course, landfill waste is just one way the ever-growing clothing industry affects the environment. Among other things, the energy expenditures from the agriculture and transportation needed to make and sell clothes will persist regardless of how many garments are saved from landfills.

Deeper change requires a cultural shift in the developed world, in which producers slow down fashion cycles and consumers demand higher-quality clothing that lasts longer, rather than just the newest styles at an affordable price.

“We need to be asking more insightful questions about how we purchase and consume,” Cuoco said. “If we relinquish too much responsibility from ourselves as consumers, that’s really dangerous.”

This article has been updated with additional information about post-consumer alternatives for leather products.

Edward D. Jones Accused of Cheating Its Own

A participant in the 401(k) Plan administered by Edward D. Jones for its employees has filed a lawsuit alleging breach of fiduciary duty and prohibited transactions by the broker-dealer under the Employee Retirement Income Security Act of 1974, as amended (known as ERISA). All of the claims in the Complaint are allegations that will have to be proven at trial.

The irony

It's ironic that these claims will be initially decided by a United States District Judge. That's a privilege denied to customers of Edward D. Jones and other broker-dealers. They require their customers to submit to mandatory arbitration of disputes, administered by the Financial Industry Regulatory Authority (FINRA). I am among the many who believe this system is rigged against investors and should be abolished. To date, Congress has not had the political will to do so.

The flawed 401(k) system

In 2008, I wrote The Smartest 401(k) Book You'll Ever Read. I asserted the current system benefited" brokerage firms, brokers, pension consultants, insurance companies, insurance agents, the mutual fund industry and employers." I noted that employees "get the short end of this stick" and stated that "this must be changed."

It took a while, but the system is starting to reform. Not because the securities industry suddenly believes it has an obligation to do so, but rather it's a result of a combination of the DOL's new 401(k) rule mandating that advisors to these plans must put the interest of plan participants first, and a spate of lawsuits (like the one against Edward D. Jones) that expose the excessive costs and other conduct harmful to participants which is at the core of many of these plans.

The allegations against Edward D. Jones

The Edward D. Jones plan has 35,929 beneficiaries with assets of over $3.9 billion. The complaint notes that Edward D. Jones has a fiduciary obligation to these plan participants which is "the highest known to the law." As a fiduciary to its plan Edward D. Jones was required to act prudently and "defray reasonable plan expenses."

In my view -- which has not been accepted by any Court to date -- the only way to fulfill this high standard is to limit investment options in the plan to low cost target date funds, or portfolios of index funds, exchange-traded funds or passively managed funds, at different risk levels.

Retirement plans should accept no payments from fund managers (known as "revenue-sharing payments"). The receipt of these payments compromises the objectivity of the plan sponsor and encourages the selection of expensive, actively managed funds, likely to underperform comparable index funds over the long-term.

The complaint alleges that Edward D. Jones accepted both revenue sharing fees and "Networking and Shareholder Accounting Fees" from both affiliated and partner mutual funds companies, who were rewarded by the inclusion of their funds as investment options in the plan.

The revenue sharing fees were significant. The Complaint alleges that, in 2014, Edward D. Jones received $153 million from mutual fund revenue-sharing.

The Complaint alleges "The Plan's investments show a high correlation to mutual funds offered by mutual fund families that pay Edward Jones the most money." If true, it's a classic example of "pay to play." Everyone's a winner -- except plan participants.

The Complaint asserts that Edward D. Jones made decisions about which funds to include in the Plan (and remain there) based on the amount of revenue-sharing fees paid by those funds, rather than which funds were in the best interest of plan participants.

The Complaint has a number of other allegations, including the failure of the Plan to include lower cost share classes of identical mutual funds. Instead, the Plan allegedly kept higher-cost share classes, resulting in an excess cost to the participants of over of $13 million.

Significance of this case

This case places the issue of whether plan fiduciaries have an obligation to consider low-cost index alternatives to expensive, actively managed funds squarely before the Court. The complaint summarizes the impressive array of academic evidence supporting its position that plan fiduciaries do have this obligation, including this quote from Jill E. Frish, in an article published in the University of Pennsylvania Law Review. Ms. Frish is a Professor of Law and Co-Director at the University of Pennsylvania Law School, Institute for Law and Economics: "The most consistent predictor of a fund's return to investors is the fund's expense ratio."

Class action attorneys and plan participants will be closely following this case and hoping the Courts are persuaded by the academic evidence supporting an "evidence-based" approach to managing retirement plan assets.

The present system is in dire need of an overhaul.

Dan Solin is a New York Times bestselling author of the Smartest series of books, including The Smartest Investment Book You'll Ever Read, The Smartest Retirement Book You'll Ever Read, The Smartest 401(k) Book You'll Ever Read and his latest, The Smartest Sales Book You'll Ever Read.

The views of the author are his alone. He is not affiliated with any broker or advisory firm.

Any data, information and content on this blog is for information purposes only and should not be construed as an offer of advisory services.

Coca-Cola Has Always Had A Connection To The Cocaine Business

When news broke yesterday about the discovery of $56 million worth of cocaine at a Coca-Cola plant in France, the press was all abuzz. But as it turns out, this Cocaine-Cola connection is not entirely new; Coca-Cola has been intimately linked to domestic manufacture of cocaine in the United States for years.

A little glimpse into Coke’s history reveals all.

Yes, most people know that Coca-Cola’s first president Asa Candler became concerned about cocaine in the early 1900s and decided to remove any trace of the drug in the company’s famous drink, but few people know that Coke continued to use what is called “decocainized coca leaf extract” in its signature beverage. In company ledgers, this―mixed with kola nut powder― is what is known as Merchandise #5, one of the “secret ingredients.”

Here’s how the process works. Beginning in the early 1900s, Coca-Cola partnered with a company called Maywood Chemical Works based in Maywood, New Jersey (now the Stepan Company) to import coca leaves (which contain small quantities of the alkaloid found in purified cocaine powder) from Peru for Coca-Cola. The company removed the cocaine alkaloid from these leaves and then sold Coca-Cola the leftover extract. As per the cocaine, Maywood sold it under close federal supervision for approved medical uses.

Federal law sanctioned this practice. Legislators wrote a special exemption into the Harrison Narcotics Act of 1914, the Jones-Miller Act of 1922, and subsequent counternarcotics legislation that allowed “decocainized coca leaves or preparations therefrom” to be sold in the United States. Some lawmakers called this clause the “Coca-Cola joker” because it was clearly designed to protect Coke’s secretive coca business. 

Over time, Coke’s demand for coca leaves grew so great that legislation had to be passed to allow leaves to come into the country beyond what was needed for the manufacture of cocaine for medicinal purposes. These laws specified that alkaloids extracted from these coca leaves had to be destroyed with federal officials bearing witness.

All was well for Coke for many years under this arrangement, but in the 1960s, the company got a crazy idea: why not grow coca leaves secretly in the United States? That way the company would have a domestic source of supply.

It may sound outlandish, but that’s exactly what happened. In the 1960s, Coca-Cola, working with its partner, the Stepan Company, gained federal approval to begin a secret coca cultivation operation in Hawaii called the “Alakea” project. University of Hawaii scientists agreed to participate in the project but were prohibited from publishing any reports about their work because Coke did not want the public to know about its relationship to these coca leaves. 

Within months, those working on Alakea could happily report that coca shrubs were growing in Hawaii, but celebrations lasted only so long. Soon a fungus wiped out the entire crop and the project was abandoned.

The failure of Alakea was really no matter for Coke, which simply continued sourcing leaves from Peru. All of this was channeled through Stepan, a third-party buffer that helped keep Coke’s coca trade out of sight. Import records show that Stepan is still happily bringing in coca leaves in the 2010s.

David Mercado / Reuters

What’s problematic about all this is that cocaleros, coca farmers in Peru, have been getting a raw deal. For years, Coca-Cola has enjoyed exclusive access to coca leaves coming into the United States and cocaleros have been prohibited from selling other coca products—teas, candies, and flours—to American markets. Coke has no doubt liked it this way because competition for coca leaves would drive up prices, which is never good for business. 

But cocaleros see it differently. Peruvians with intimate knowledge of coca production in the Andes told me back in 2012 that coca farmers would love nothing more than to “revalorize” the coca leaf and once and for all quash the misconception that the coca leaf and purified cocaine are the same thing. Then cocaleros might experience a commercial boon that would allow them to abandon exploitative relationships with drug lords and monopolistic buyers.

Today, if I were to travel to Peru and try to return home with a small batch of coca leaves (perhaps to brew tea), I would be detained by border officials. 

So here’s the essential question: if Coke can work partnerships to bring coca leaves into the United States, why can’t the rest of us? That’s the real story behind the Cocaine-Cola connection.

5 Innovative Ways to Increase Small Business Cash Flow

If you are a small business owner like me, increasing cash flow is practically the center of our professional lives. Although it is crucial for any business, it is especially important for small business owners because we are in business for, and depend on ourselves, as well as our loyal customers. We know that cash flow is critical to the success and survival of our businesses.

It is important to remember that cash flow isn't profit, and profit isn't cash flow. Indeed, we can all have tons of profit but no cash sitting in our bank accounts. While sales are the muscles of your business, cash flow is the lifeblood. That said; it is also entirely possible to improve your cash flow without increasing sales. As a small business owner, sales may be hard to come by, but that doesn't mean your cash flow won't improve.

Strategies to Increase Small Business Cash Flow:

1. Decrease the time it takes to collect client payment

Known as "days sales outstanding" in the business world, DSO is the amount of time it takes to collect payment from your clients. Once your service or product has been delivered successfully, it is time for your customers to pay up. Look over your financial information and pay special attention to DSO. See how long sales are outstanding, and then try to decrease that amount for future sales by a quarter. Instead of giving clients 20 days to pay, next time, only give 15. Don't forget to start this strategy with new clients while allowing your current ones to finish their agreed-upon time.

2. Shift costs from fixed to variable

Evaluate your business costs to see if it fits in a variable or fixed cost category. In order to increase cash flow but not sales, it is essential for your business to try to shift some costs from fixed to variable. Take time to evaluate all of your business expenses with care and begin to identify costs that you can move from fixed to variable. Ideally, you will want to tie payments to key performance metrics that align with the timing that the business actually receives a payment.

3. Sell old or excess equipment

Chances are that your company has some equipment that is lying around collecting dust and costing you money. Instead of sitting in storage, that equipment could be making you money! Check out your inventory and decide what can stay and what you can sacrifice. If you haven't touched it in a long time, now may be the perfect time to say goodbye. If you don't think you will use it in the next 12 months, consider selling it and investing the cash in something more useful.

4. Collect deposits and process payments quickly

When creating customer agreements, structure them so you can collect payments upon the completion of work. Alternatively, require a larger deposit at the start of the job so you have available cash for the duration of the process. Be sure to send out invoices immediately to avoid waiting for incoming receivables. If you are late to send an invoice, the fault is entirely yours. Customers may be late at paying anyway, so if you are slow to send the bill in the first place, you may end up months behind on collecting receivables.

5. Conduct a credit check

If a client doesn't want to pay cash, be sure to conduct a credit check. This is your way to ensure that the customer has a trustworthy credit history and most likely will follow through on payments. If a poor credit report comes back, stand your ground; refuse to make the sale. If you decide to work with someone with a poor payment history, you can rest assured that your payments will be consistently late, meaning your cash flow will suffer.

You can find Victoria on her travel blog www.followmeaway.com

How Can You Make Money off the Pokémon Go Craze?

Pokémon Go has become a global phenomenon. It gained popularity immediately and businesses have creatively determined ways to capitalize on that. Individuals are becoming entrepreneurs by advertising personal assistance in playing the game. If your business wants to get in on the Pokémon Go craze and profit from it, there are a few suggestions here to help you get started.

Create a Pokémon Go Pop-Up Shop

If your business does not want to apply to be a Pokestop, you can take the business to the nearest Pokestop. Create a pop-up shop in close proximity to a popular Pokestop to sell products, food, or tech accessories to get the attention of Pokémon Go players. Advertise a small discount for Pokémon Go players that prove to be playing in real-time.

Just by being part of the trend, you can get new customers now thanks to Pokémon Go. Connecting with the local community, showing approachability, and showing that you adapt to trends helps draw in an expanded consumer group that can end up permanently increasing your annual revenue.

Pokestop Window Advertisements

Place an advertisement poster in your window of your business advertising it as a Gym Pokestop location, once you are approved as a Pokestop. Offer those that come in a promotion, such as a discount or free item, for playing the game and coming by your business. This is just one way that businesses are trying to cash in on the Pokémon Go craze.

You can also advertise your business as a "Pokémon Go Safe Place" where game players can come into your business to determine their path to the next Pokeball. While taking a break, gamers are more likely to make a purchase, especially if you are a food industry business like a coffee shop or restaurant.

Make Your Business Known on Google Places

If your business does not have a Google Places page, it should. Google already provides general information about your business for search purposes, but a Google Places page is different. Here you control what information is displayed and can customize your page with trending hashtags that help your business be more recognized locally. You can list your business as a #Pokestop and offer a promotion to Pokémon Go players for stopping by while catching their Pokémon. Optimizing SEO for Google Places with proper hashtags and a tag line that draws Pokémon Go players in will help increase your revenues.

Advertise Player Services

Become an entrepreneur from your experience playing Pokémon Go. A creative way to start earning money from Pokémon Go is to become a Safe Pokémon Chauffer or offer your services as a trainer. Some individuals have gone so far as to sell off advanced accounts, start over, and repeat the cycle. Other player services that have gained attention are the $20-per hour rate to hatch eggs in the game for players who do not have time.

Offer a Pokémon Go-Specific Service

Several heavy hitters, like T-Mobile and Uber, have created Pokémon Go-specific services to generate additional revenue. Uber has created a Pokémon Go bus in New York in an attempt to help users play the game safely and make money themselves by transporting players to Pokestops. T-Mobile created an "all you can eat data plan" for players of Pokémon Go to boost contract sign-ups. These two industry leaders have learned how to cash in on the Pokémon Go craze rather well.

Buy and Cast Lures

Usually, Pokémon Go players purchase lures with Pokecoins via the app. You can cast those lures and draw immediate attention to your business. A pizzeria in New York cast a lure and their sales rose by 75-percent the weekend following the lure casting. Lures trigger the spawning of Pokémon in short intervals. It is important to post the casting of a lure on your business' social media pages, to email subscribers, and to text subscribers immediately upon casting the lure to get people rushing to your business. For example, Busch Gardens in Williamsburg, Virginia did a lure-a-thon to attract people to their theme park one Sunday.

Final Thoughts

Your business can profit from Pokémon Go, without infracting on any copyright or trademark laws. It is a good idea to create a themed special or promotion because although it is at a slight discount it still turns a profit as you make more sales. If Pokémon Go is a craze in your local area, consider holding a Pokémon Go player workshop. Hire a trainer, and charge a workshop attendance fee with discounts on refreshments, gear, or items associated with your business. Promoting safe gameplay while making money helps increase your positive reputation.

How will you or your company make money from the Pokémon Go craze?

Once The Domain Of Millennials, Uber And Lyft Are Now Pursuing Seniors

Ride-hailing services want to make sure Grandma Betty can get to bridge club just as easily as her 22-year-old grandson travels to and from ... whatever it is young folks are doing these days.

Once the domain of 20-somethings who might have a drink or two and need a safe ride home, companies like Lyft and Uber have set their sights on a different age range entirely: senior citizens.

Lyft announced Tuesday it has partnered with GreatCall, a mobile phone company that specializes in providing cell phones to seniors, to extend its ride-hailing services to those who ― like the elderly ― may not have a smartphone, much less want to learn how to use an app on one to hail a ride.

Instead of an app, GreatCall customers dial “0” to talk to an operator, who can provide a cost estimate and book a ride. The fare is tacked onto the customer’s monthly cell phone bill.

The L.A. Times notes Uber struck up a similar arrangement with a company called 24Hr HomeCare last week.

Several third-party ride-hailing services also specialize in giving lifts to older adults who don’t have smartphones, including GoGoGrandparent, a newer entrant that adds additional features like meal and grocery delivery options.

As people age, one thing to go is the ability to drive. That means losing your freedom to get to doctor’s appointments and to stay social with friends.

This is far from either company’s first foray into the senior market, which, judging by recent moves from both Uber and Lyft, seems ripe for disruption.

And it couldn’t come at a better time. The first wave of the so-called “baby boomer” generation turned 65 in 2011, with the number of Americans aged 65 and older projected to keep growing until 2030, when it’s expected to peak at around 71 million people.

Earlier this year, both Uber and Lyft began offering non-emergency medical transport services, specifically targeting customers whose rides would be reimbursed by Medicaid. 

And in the Denver suburb of Centennial, where 15 years from now at least 30 percent of the population is projected to be over the age of 65, city officials are exploring replacing current dial-a-ride services with less expensive, more efficient rides via Lyft.

Starting Aug. 17, the city has embarked on a first-of-its-kind, six-month long pilot project, paying for Lyft rides to and from the area’s major light-rail station in a bid to increase mobility.

“We call Centennial the Silver Tsunami,” Centennial Mayor Cathy Noon told The Atlantic blog CityLab. “As people age, one thing to go is the ability to drive. That means losing your freedom to get to doctor’s appointments and to stay social with friends. We really want to help keep the people who started Centennial engaged in it.”

Note: The Huffington Post’s editor-in-chief Arianna Huffington is a member of Uber’s board of directors and has recused herself from any involvement in the site’s coverage of the company.

Mylan CEO Should Resign (And Take Her 'Coupons' With Her)

I recently wrote a Huffington Post piece demanding that embattled Mylan CEO, Heather Bresch, cut the price of EpiPens and resign. After days of media coverage regarding Mylan’s price gouging of the EpiPen auto-injector, Bresch finally took an interview with CNBC that could, at best, be described as a friendly exchange. There were no hard hitting questions. This wasn’t journalism; it was public relations’ version of tee-ball. I am writing again to reiterate my demand that Heather Bresch cut the price of EpiPens and resign immediately.

When Bresch finally broke her silence, it was to offer coupons and an increase in a program that gives low-income families free access to EpiPens. Coupons! I can’t make this up. This gives us more perspective on how important the systematic EpiPen price increases are to Mylan and its CEO.

Bresch and her fellow Mylan executives undoubtedly have spent dozens of hours over the past few days hunkered down in a conference room with a public relations crisis team, lawyers and other advisors. After days of public outcry over yet another case of extreme corporate greed and indifference for human life, they decided to offer us coupons.

After days of public outcry over yet another case of extreme corporate greed and indifference for human life, they decided to offer us coupons.

Heather Bresch’s comments on CNBC’s Squawk Box were a distraction. Bresch didn’t even consider cutting the price, stating, “Had we reduced the list price, I couldn’t ensure that everyone that needs an EpiPen gets one.”

Look closely at what she is actually saying in this statement that was clearly drafted with legal expertise. Bresch is saying that if she cut the price, she could not guarantee that every single person who needed an EpiPen gets one. This statement is true to the extent that if she lowered the price and even a single person wasn’t aware that they could now afford this life-saving drug, that one person might not receive an EpiPen. This statement was artfully crafted to make it sound as if Bresch has no ability to increase access to EpiPens for millions of people who need them. But Bresch knows this isn’t true. The best way to increase access to this life-saving medication is to cut the price.

Bresch also offered to increase the income threshold for lower-income families who have free access to EpiPens. This is also calculated. In my professional role, I work with many lower-income families. I know from experience that these families are the more likely to be unaware of complicated programs that may require forms, a visit to the doctor, and other obstacles. It’s often very difficult to increase awareness of programs that benefit these lower-income families. Bresch and Mylan are making an offer that appears to be more altruistic than it really is. They know that many of these families will still pay for EpiPens or go without them because they won’t have an awareness of this program and any changes to it.

You can keep your coupons, Heather! Cut the price of EpiPens and resign.

What happens when the national public outcry dies down because Mylan has appeared to appeased people just enough so that our short-term memory news cycle moves on to the next big scandal? The coupon and the program for lower-income families can be cut or eliminated altogether. And Mylan still has a virtual monopoly in the national epinephrine auto-injector market.

Why is Bresch even offering coupons and additional access to a free EpiPen program? Bresch and Mylan have lost billions of dollars in stock value in a number of days due to the negative press about their systematic price gouging. If they act quickly and quiet the national fervor, they will disappear from the national media spotlight, the waters will calm and their stock may continue to gain back those billions.

The really disgusting part of all of this? Mylan’s stock could actually gain value as a result of Bresch’s sleight of hand comments and offers to customers. The only way that real change will come to Mylan is if our nation’s media outlets - and all of us regular hardworking Americans – continue to demand price cuts and Bresch’s resignation.

The calculated response and “fixes” that Mylan CEO Heather Bresch offered people like my two-year-old daughter are further evidence of a culture of greed that employs deceit and misdirection to maintain its extortionate prices and profit margin.

The most despicable part of Bresch’s theatrical CNBC comments was that she claimed, “No one’s more frustrated than me.”

I’ll bet you your $19 million salary that I’m more frustrated than you! You can keep your coupons, Heather! Cut the price of EpiPens and resign!

Related...

• The CEO Who Raised EpiPen Prices Should Resign
• Mylan Executives Got Pay Increases As Price Of EpiPen Soared
• EpiPen's 500 Percent Price Hike Leaves Patients Scrambling

Mylan CEO Should Resign (And Take Her 'Coupons' With Her)

I recently wrote a Huffington Post piece demanding that embattled Mylan CEO, Heather Bresch, cut the price of EpiPens and resign. After days of media coverage regarding Mylan’s price gouging of the EpiPen auto-injector, Bresch finally took an interview with CNBC that could, at best, be described as a friendly exchange. There were no hard hitting questions. This wasn’t journalism; it was public relations’ version of tee-ball. I am writing again to reiterate my demand that Heather Bresch cut the price of EpiPens and resign immediately.

When Bresch finally broke her silence, it was to offer coupons and an increase in a program that gives low-income families free access to EpiPens. Coupons! I can’t make this up. This gives us more perspective on how important the systematic EpiPen price increases are to Mylan and its CEO.

Bresch and her fellow Mylan executives undoubtedly have spent dozens of hours over the past few days hunkered down in a conference room with a public relations crisis team, lawyers and other advisors. After days of public outcry over yet another case of extreme corporate greed and indifference for human life, they decided to offer us coupons.

After days of public outcry over yet another case of extreme corporate greed and indifference for human life, they decided to offer us coupons.

Heather Bresch’s comments on CNBC’s Squawk Box were a distraction. Bresch didn’t even consider cutting the price, stating, “Had we reduced the list price, I couldn’t ensure that everyone that needs an EpiPen gets one.”

Look closely at what she is actually saying in this statement that was clearly drafted with legal expertise. Bresch is saying that if she cut the price, she could not guarantee that every single person who needed an EpiPen gets one. This statement is true to the extent that if she lowered the price and even a single person wasn’t aware that they could now afford this life-saving drug, that one person might not receive an EpiPen. This statement was artfully crafted to make it sound as if Bresch has no ability to increase access to EpiPens for millions of people who need them. But Bresch knows this isn’t true. The best way to increase access to this life-saving medication is to cut the price.

Bresch also offered to increase the income threshold for lower-income families who have free access to EpiPens. This is also calculated. In my professional role, I work with many lower-income families. I know from experience that these families are the more likely to be unaware of complicated programs that may require forms, a visit to the doctor, and other obstacles. It’s often very difficult to increase awareness of programs that benefit these lower-income families. Bresch and Mylan are making an offer that appears to be more altruistic than it really is. They know that many of these families will still pay for EpiPens or go without them because they won’t have an awareness of this program and any changes to it.

You can keep your coupons, Heather! Cut the price of EpiPens and resign.

What happens when the national public outcry dies down because Mylan has appeared to appeased people just enough so that our short-term memory news cycle moves on to the next big scandal? The coupon and the program for lower-income families can be cut or eliminated altogether. And Mylan still has a virtual monopoly in the national epinephrine auto-injector market.

Why is Bresch even offering coupons and additional access to a free EpiPen program? Bresch and Mylan have lost billions of dollars in stock value in a number of days due to the negative press about their systematic price gouging. If they act quickly and quiet the national fervor, they will disappear from the national media spotlight, the waters will calm and their stock may continue to gain back those billions.

The really disgusting part of all of this? Mylan’s stock could actually gain value as a result of Bresch’s sleight of hand comments and offers to customers. The only way that real change will come to Mylan is if our nation’s media outlets - and all of us regular hardworking Americans – continue to demand price cuts and Bresch’s resignation.

The calculated response and “fixes” that Mylan CEO Heather Bresch offered people like my two-year-old daughter are further evidence of a culture of greed that employs deceit and misdirection to maintain its extortionate prices and profit margin.

The most despicable part of Bresch’s theatrical CNBC comments was that she claimed, “No one’s more frustrated than me.”

I’ll bet you your $19 million salary that I’m more frustrated than you! You can keep your coupons, Heather! Cut the price of EpiPens and resign!

Related...

• The CEO Who Raised EpiPen Prices Should Resign
• Mylan Executives Got Pay Increases As Price Of EpiPen Soared
• EpiPen's 500 Percent Price Hike Leaves Patients Scrambling

5 Reasons To Choose Private Equity Real Estate Funds

Sell everything. That's what famed investors such as George Soros, Carl Icahn, Jeff Gundlach, Bill Gross and Stan Druckenmiller have been preaching about equities since May, noted Barrons this August--at the same time CBOE's Volatility Index fell to its lowest level in two years.

Despite the fact that the 2016 S&P 500 is up 5.9 percent on a price basis in the face of uncertain times (think Brexit, the U.S. elections, the record low yields of the U.S. 10-Year Treasury Note and more), the stock market can't and won't go up forever. Bad news drives interest rates lower, and lower rates support loftier valuations, said Barrons.

Bonds are equally risky. In a weak business climate, the fixed yields of bonds look more attractive as stock prices fall. But that traditionally inverse relationship between stocks and bonds has broken down in the last two decades, noted The Wall Street Journal.

A 2016 McKinsey Global Institute report suggests the combination of higher interest rates, lower economic growth and weak corporate profits is here to stay - and a portfolio made up only of stocks and bonds will generate lower returns for years to come.

Commercial real estate has the potential to offer long-term returns that are both healthy and stable. Most significantly, when added to a traditional portfolio of stocks and bonds, this asset class can decrease volatility and increase returns. But it's important to understand the different types of real estate investments you can make, and each one's potential impact on your portfolio.

For instance, an investor recently asked us why buy into our Fund III at Origin Investments instead of a successful publicly traded REIT such as Realty Income Corp. (O-NYSE)? Both products boast similar target returns, and the REIT has a lot going for it. This includes:

• A proven long-term record of 14 percent returns (compared to Origin's Fund III's targeted return of 17-19 percent), with a current dividend yield of 3.76 percent;
• Dividends that have increased over time; and
• Liquidity, since the REIT is traded on an exchange and can be sold like any other stock.

In truth, when it comes to deciding between a publicly traded REIT and a private equity real estate fund, it isn't an "either-or" proposition but rather an "and" proposition; you don't necessarily have to choose between the two. Here's why, along with four other compelling reasons to invest in private equity real estate funds:

1.Unlike REITs, private equity real estate isn't tied to stock market fluctuations.
While public real estate products can be lucrative investments, they are highly correlated to the stock market. That means they rise and fall based on what's happening in the economy, and their values can be impacted by events that have nothing to do with real estate fundamentals. Because of this, adding publicly traded REITs alone will not necessarily improve your portfolio's risk-adjusted returns.

2.Public equity real estate funds achieve different investing goals.
When evaluating a potential investment, it important to look at alpha and beta. Beta measures the volatility of a fund relative to the market by gauging how much the fund's returns move up or down given the gains or losses of its benchmark market index. Alpha is the difference between a fund's expected returns based on its beta and its actual returns, and it is sometimes interpreted as the value that a portfolio manager adds, notes Morningstar.

Public REITs are a good example of the difference between alpha and beta.

With pubic REITs you are essentially buying beta, while a private equity real estate fund seeks to achieve alpha--and does with strategic business plans for properties and skilled asset managers. Origin's goal is to outperform the market on a risk-adjusted basis and achieve returns well above the index. We focus on finding high quality, underperforming commercial real estate properties that can be turned around. Our philosophy is that this is the best way to protect the downside while maximizing the upside of each deal.

3. REITs are a volatile asset class.
When the economy tanks, REITs can get hit hard. "In 2007 and 2008, REITs lost 15.7 percent and 37.7 percent, respectively," the Wall Street Journal noted recently. Also, since 2000, REITs "are second only to emerging-market stocks as the most volatile asset class. And with interest rates likely to rise, the next few years could be tough," especially for investors buying REITs now, concluded the WSJ.

4. Funds minimize risk exposure.
Our private equity funds are one of the most effective options for investors because they are a diversified investment. At Origin, each of the properties in a fund are run as a separate businesses. So if one underperforms it doesn't impact the others. A deal by deal investment strategy does not offer this same benefit.

To better gauge how well a fund will perform, it also helps to look at a company's other products. In our case, our earlier Funds I and II had projected returns of 17-19 percent, however Fund I is on track to generate a 28 percent net return and Fund II is on track to deliver a 26 percent return. Preqin, an industry leader that tracks performance of private equity fund managers, ranked these two funds in the top quartile as of June 2016.

5. Consider the manager's alignment of interests.
According to Towers Watson, a leading global advisory company, co-investment is the most effective way to align the interests of a manager and investors. We started Origin to invest our own capital, and maximizing investment performance remains our primary goal. We continue to keep our skin in the game with Fund III by committing $10 million of our personal resources.

If private equity real estate isn't part of your portfolio, it needs to be; asset allocation is a large determinant of investment success. Private real estate has low correlation to other asset classes, high expected returns and low volatility. That makes it a trifecta, since most asset classes only have one or two of these qualities.

CEO Of Giant Corporation Tells US Government He's The Boss Of Them

Are We the People the boss of giant multinational corporations, or are they the boss of us?

Imagine, if you will, going to the IRS and saying, "I don't think the tax rate is fair so I'm not going to pay it." Regular Americans can't do that. But Apple just did.

Apple's CEO Tim Cook was interviewed by the Washington Post early this month. He was asked about the vast sums of profits that Apple has shifted into overseas tax havens thanks to a loophole in US tax law that lets them "defer" paying taxes on those profits as long as the money technically stays outside the country. Cook said (emphasis added, for emphasis):

And when we bring it back, we will pay 35 percent federal tax and then a weighted average across the states that we're in, which is about 5 percent, so think of it as 40 percent. We've said at 40 percent, we're not going to bring it back until there's a fair rate. There's no debate about it.

What would happen to any regular American if they did what Cook did, and said they they aren't going to pay taxes because they don't think the tax rate is "fair"? (Hint: Jail. And maybe 2 or 3 years added to the sentence for the contempt of saying, "There's no debate about it.")

But Apple is a huge multinational corporation, and these days huge multinational corporations are the boss of our Congress. So, CEO Cook gets away with it -- and with keeping $181 billion in tax havens to dodge paying $59 billion in taxes. Cook knows he can just come out and say they are not going to pay their taxes until there is a "fair rate."

Of course, huge multinational corporations will tell you a "fair rate" would be zero. Or better yet, how about We the People just bow down and pay taxes to them. The corporate tax rate used to be 50%. CEOs complained it was "unfair" so it was lowered to 35%. Also, by the way, Apple can deduct taxes it pays elsewhere, including to states, from its federal tax bill.

Think about what We the People could do with that $59 billion Apple owes us.

In all multinational corporations have more than $2.4 trillion stashed in tax havens, dodging maybe $700 billion in taxes.

Think about what We the People could do with that $700 or so billion they owe us.

Meanwhile

Americans for Tax Fairness released a new investigative report showing that Gilead Sciences exorbitantly priced hepatitis C medications -- price gouging ill American patients -- then shifted billions of dollars of the resulting profits to offshore tax havens to dodge taxes.

An August 21 news story in FORA, an Irish business publication, confirmed key findings of the report:

Company filings show that one of the firm's main Irish subsidiaries had revenues of $2 billion in 2012 and made a full-year profit of $1.3 billion but paid nothing to the Irish exchequer as the firm was tax resident in the Bahamas - where zero corporate taxes apply.

At the end of the year, after which the subsidiaries finances are not publicly accessible, the Irish subsidiary had accumulated profits of just under $7 billion.

The company also transferred the ownership of one of its most valuable money-makers, which it acquired for $11 billion, to a separate Irish subsidiary.

So, this company gouges sick Americans and shifts the profits out of the country to dodge taxes. Are We the People the boss of these giant corporations, or are they the boss of us? Whose government is this, anyway? Who is our economy for?

"The Little People Pay Taxes"

Times have changed. People and companies didn't used to get away with snubbing their nose at We the People, and doing things like dodging taxes.

In the 1980s Leona Helmsley was known as the "Hotel Queen." Helmsley and her husband Harry were known for buying apartment buildings, forcing out the tenants, and converting them into condominiums. The Helmsley real estate empire included the Empire State Building.

They also owned hotels. Leona ran as many as 30 Helmsley hotels, with the luxurious Helmsley Palace at the peak, and became famous after she was featured in advertisements.

But Helmsley became known as "the Queen of Mean," because she was notorious for doing things like abusing employees, firing them at Christmas, even evicting her son's widow a few days after he died. Eventually a dissatisfied employee turned her in for various tax crimes and she was indicted on 235 state and federal counts.

The Helmsleys were charged with using hotel money to buy personal items to evade income taxes. Helmsley famously said of the charges, "We don't pay taxes. Only the little people pay taxes."

We the Little People sentenced Helmsley to 12 years in jail for evading $1.7 million in taxes (eventually resulting in 19 months in jail and 2 years of home arrest.) At her sentencing the judge said:

'There is a community that needs to be served by the enforcement of the law. . . . It is my judgment the motion for sentence reduction should be denied.'

Griesa said that Helmsley's conduct had been 'deliberate, fraudulent, directed against the United States government. It involved evasion of taxes.'

Helmsley was sentenced to jail for evading a pittance of $1.7 million in taxes. Today Apple owes $59 billion. In this age of "mass incarceration" for regular people, imagine a wealthy Wall Street banker or corporate CEO going to jail for something. Actually, you can't even imagine it.

No, instead this is today's reality: Lawmakers Overseeing Wall Street Given Bigger, More Favorable Loans Than Others: Study.

Senator Wyden Says End Deferral Loophole

Some people are trying to restore our democracy, and make We the People the boss of the giant corporations and wealthy CEOs again.

Senator Bernie Sanders has been calling for ending this deferral loophole for a long time. His residential campaign platform called for using the resulting revenue to pay for $1 trillion of infrastructure repair. Senator Elizabeth Warren has also called for ending this loophole.

Last week Oregon Senator Ron Wyden penned an op-ed calling for an end to this corporate tax haven "deferral" loophole, titled "Ending the Biggest Tax Rip-Off -- Tax Deferral." In it Wyden wrote:

...[Tax deferral] is the rule that encourages American multinational corporations to keep their profits overseas instead of investing them here at home, and it does so by granting them $80 billion a year in tax breaks. This policy is as foolish as it is unfair. It simply defies common sense.

Most Americans probably aren't familiar with deferral ...but ... some of the most profitable companies in the world can put off paying taxes indefinitely while hardworking Americans must pay their taxes every year.

Unfortunately, Wyden resorts to offering to bargain with the corporations, offering lower tax rates if they would please invest in the US. Like so many others, Wyden has forgotten that Congress is supposed to be the boss of the corporations.

Sign The Petition

SIGN THE PETITION: Stand with Americans for Tax Fairness and Public Citizen and demand that U.S. Treasury Secretary Jack Lew investigate Gilead's multi-billion-dollar tax dodging scheme and make Gilead pay the taxes it owes U.S. taxpayers.

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This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progressive Breakfast.

Tesla Just Unveiled The Quickest Car You Can Actually Buy

SAN FRANCISCO (Reuters) - Tesla Motors Inc <TSLA.O> Chief Executive Elon Musk said on Tuesday the company will offer a larger upgraded battery pack for performance versions of its Model S and X vehicles that will extend range and allow for super fast acceleration.

The new 100 kilowatt hour battery pack means high end versions of the Model S sedan, called the P 100D, will be the world’s fastest accelerating car in production, the Silicon Valley automaker said.

“These are very profound milestones and I think will help convince people around the world that electric is the future,” said Musk on a conference call with journalists.

The new battery extends the range of performance versions of the new Model S beyond 300 miles (482.8 km), Tesla said. Musk said that if the weather is not too hot, a driver could travel from San Francisco to Los Angeles without recharging.
After rising 2.1 percent to $227.71 in afternoon trade, shares dipped from session highs to $224.87, up less than 1 percent.

News of the upgrade comes as the all-electric car maker lays the groundwork for a controversial buyout of SolarCity Corp <SCTY.O>, while it also prepares for next year’s launch of its high profile Model 3 mass-market vehicle.

SolarCity agreed to Tesla’s $2.6 billion offer to buy the solar panel installer earlier this month, clearing one obstacle in the way of Musk’s ambitious goal to create a carbon-free energy and transportation company.

Both companies are still trading below where they were when SolarCity’s approval for the deal was announced.

In May, Tesla said it was stepping up production plans for its upcoming Model 3 mass-market sedan and would build a total of 500,000 all-electric vehicles in 2018, two years ahead of schedule, but it warned that spending will ramp up as well.

Tesla earlier this month reported a steeper than expected quarterly loss on higher spending at its vehicle and battery factories.
 
(Reporting by David Shepardson; Editing by Chizu Nomiyama and Tom Brown)

 

 

Looks Like Ivanka Trump Doesn't Pay Her Interns

Ivanka Trump, who markets herself as a champion of working women and learned about business by walking her father’s construction sites, apparently does not pay interns at her namesake fashion and jewelry company in New York City, according to a blog post on IvankaTrump.com that also appeared on her official Twitter page on Thursday.

How to make it work as an unpaid intern: https://t.co/pwMIYWh4kw #nomoneynoproblems #interntips #internships pic.twitter.com/BRoWuO6bq7

— Ivanka Trump (@IvankaTrump) August 18, 2016

Yes, that actually says #nomoneynoproblems, and comes from the Twitter account of the daughter of self-proclaimed billionaire and Republican nominee for president Donald Trump.

In the post, unpaid intern Quincy Bulin offers tips and includes advice from three of her unpaid colleagues ― all women, two named Mackenzie.  

The advice includes finding a part-time job that actually pays, saving money during the school year, setting a budget and socializing cheaply.

Of course, Bulin leaves out the real key to surviving an unpaid internship: having well-off parents. Kids with families that can support them while they take on jobs for nothing are more likely to take on jobs for nothing. 

Unpaid internships at for-profit companies are not legal in New York City, where Ivanka’s workers are based ― unless the positions are for college credit. And even then, there are a host of restrictions around how the job is structured. Regulations regarding unpaid interns at nonprofit organizations are slightly less strict.

Ivanka Trump is certainly not the only employer to use unpaid interns. In an email, Chief Brand Officer Abigail Klem told The Huffington Post, “We strive to create a fulfilling learning opportunity tailored to the unique interests and career goals of each intern. It is our goal that at the end of the program, our interns leave with experiences that will help guide them into choosing a fulfilling career path.”

The company didn’t respond to requests for comment on whether those interns also leave with school credit or some other kind of reimbursement. And Trump herself likely didn’t even send out the tweet yesterday. She’s vacationing in Croatia while her father’s campaign goes into full meltdown mode. 

The notion that she would employ women without paying them is newsworthy for a couple of reasons, though. 

@IvankaTrump what the hell do you know about being an unpaid intern? Or making it work? Why all your emojis black women?? #TrumpPence16

— bodhizwanya (@malikazwanya) August 18, 2016

Ivanka and her brothers sold themselves as in-touch with working-class people at the Republican National Convention last month, talking up their experience on their father’s construction sites when they were growing up. 

Unpaid internships just aren’t the province of working-class people. An unpaid internship is “a handout that, best intentions aside, accelerates a cycle of privilege and reward,” Darren Walker, the president of the Ford Foundation, pointed out in a piece for The New York Times recently. Companies should get rid of unpaid internships, Walker argues, because they reinforce a lack of diversity. Unpaid interns land jobs eventually at these companies, and you wind up with a pretty homogenous workforce, which leads to all kinds of problems.  

.@IvankaTrump is this a joke? Is all of this some sort of Kaufman-esque performance art piece?

— Chris Bea (@CJosephBea) August 18, 2016

Not paying these women for their work also looks off, coming from Ivanka, who is a self-proclaimed supporter of women’s equality in the workplace. Indeed, her website bills itself as the “ultimate destination for women who work.”

Unpaid internships lead to lower-paying jobs, according to research from the National Association of Colleges and Employers. For these unpaid interns, that first lower-paying job would start a cycle of under-earning of the sort that reinforces pay gaps between men and women.

Speaking of supporting women: Ivanka reportedly gives 8 weeks paid parental leave to her employees. That’s not terrible, considering the United States has no paid leave policy. Yet, it falls short of what most proponents of paid leave and maternal health researchers consider optimal. She recently came under fire because her label works with companies that do not offer any paid leave.

In all, not a great look for a fashion company.

This article has been updated to include additional information about regulations surrounding unpaid internships, and with a comment from the company.

Editor’s note: Donald Trump regularly incites political violence and is a serial liar, rampant xenophobe, racist, misogynist and birther who has repeatedly pledged to ban all Muslims — 1.6 billion members of an entire religion — from entering the U.S.

One Of Donald Trump's Quietest Critics Just Called Him Out On Diversity

Marc Benioff doesn’t want to talk about Donald Trump. Rather than give more airtime to the bombastic Republican presidential nominee, the Salesforce chief prefers to plug Hillary Clinton, the Democratic candidate for whom he raised $500,000 earlier this year.

But on Wednesday, Benioff called Trump out for holding a televised campaign meeting about security with about two dozen people, almost all of whom appear to be white men. The move came a day after he delivered a speech aggressively appealing to black voters. 

This table reflects how @realDonaldTrump sees America : homogeneous. pic.twitter.com/odI2AeyWNp

— Marc Benioff (@Benioff) August 17, 2016

Two women do appear to be sitting at the end of the table, according to Reuters footage of the meeting. Still, Trump’s tone-deafness a day after he attempted to woo African-Americans by speaking in a 94.8 percent white Milwaukee suburb underscores the extent to which Trump’s campaign as a whole ― and not just the candidate’s crass rhetoric ― has gone out of its way to alienate minority and female voters. 

Benioff, for his part, isn’t a perfect beacon of inclusivity. The workforce at his cloud computing giant remains 67 percent white. Hispanics make up 4 percent, and African-Americans just 2 percent, of Salesforce employees.

But that’s not a problem that’s unique to Salesforce ― it reflects hiring trends in the tech industry, which began grappling with its lack of diversity a few years ago. In the past year, Benioff spent $3 million to eliminate the gender pay gap at Salesforce and publicly protested against laws that discriminate against lesbian, gay, bisexual, transgender and queer people. 

Benioff did not respond to a request for comment from The Huffington Post. Neither did Hope Hicks, Trump’s campaign spokeswoman. 

Kevork Djansezian/Reuters

Salesforce CEO Marc Benioff has been a vocal advocate for women and LGBTQ people. 

Until recently, Benioff has stayed fairly quiet about the Republican nominee to amplify his reasons to vote for someone ― in this case, Clinton ― rather than his reasons to vote against someone else.

Benioff’s relative silence seemed to signal a departure from his usual style. He comments on progressive political issues almost daily, mostly to his roughly 244,000 Twitter followers. He has spearheaded almost every corporate charge against state laws that either legalize discrimination against queer people based on “religious freedom” or prevent trans individuals from using bathrooms associated with their gender identities. 

In response to a HuffPost article probing his low-profile opposition to Trump, Benioff said he preferred to advocate against the Republican behind the scenes. When other CEOs and entrepreneurs email him to ask how to deal with Trump, he said he answers, “If you want to defeat Donald Trump and you’re that upset about him, then you should support Hillary Clinton, which is what I’m doing.” 

On Wednesday, in an apparent attempt to get his faltering campaign back on track, Trump named Breitbart News Executive Chairman Steve Bannon as his new chief executive. This has been widely interpreted as a sign that Trump will intensify his uncivil, scorched-earth campaign tactics. And if that happens, even Trump’s quietest critics may be tempted to weigh in before November’s votes are cast.

Editor’s note: Donald Trump regularly incites political violence and is a serial liar, rampant xenophobe, racist, misogynist and birther who has repeatedly pledged to ban all Muslims — 1.6 billion members of an entire religion — from entering the U.S.

3 Olympic Business Lessons For Every Business Owner

I don't know about you, but I've been obsessing over the Olympics in Rio. I've had them playing in the background while I do client work all day. I've re-arranged my schedule to watch some events. I've stayed up every single night just to watch swimming!

While watching the events this year, I realized there are some major Olympic business lessons we can learn as freelancers and small business owners. In this post, I'm going to detail the ones I've noticed so far.

You can overcome an upper limit problem.

I've discussed upper limit problems before, but watching Michael Phelps make a comeback after a few rough years in his personal life has made me interested in it again.

An upper limit problem is what Gay Hendricks, author of The Big Leap, describes as the moment we sabotage ourselves when things are going well. We think there's a limit to our success and, as a result, we unconsciously do something to screw it up.

Just look at Michael Phelps a few short years ago. The greatest Olympian of all time was suddenly having one challenge after another in his personal life which was resulting in problems for his professional life. It's textbook upper limit problem.

Michael Phelps overcame it all. Not only did he overcome it to make an appearance in Rio, he's killed it in every single one of his races!

This is one of the most important Olympic business lessons of all: Be mindful of when you're sabotaging your success and immediately start to course correct.

Don't worry about the competition.

One of the greatest Olympic business lessons you can always learn by watching these events is how to handle competition. The Rio Olympics are no exception.

There's an image that has surfaced on the internet of Michael Phelps' rival Chad Le Clos looking right at him in the water as they were racing. While Le Clos was busy wondering where Phelps was, Phelps was keeping his eyes straight in front.

Phelps refused to get distracted by what was going on around him. He simply focused on the race. Phelps took home the gold and Le Clos, who narrowly took the gold from Phelps four years ago in the same event, didn't even medal.

In this world, we're told to worry about our competitors. This creates a lot of distraction and a lot of noise for freelancers who are just trying to make a living doing something creative. The reality is, we need to stay focused on our own lane, not anyone else's.

Give it your best shot.

The U.S. Women's Beach Volleyball team was given a run for their money by the Swiss. It was a thrilling three sets to watch, and you could tell every player was giving it their all. As one of the announcers said, "They have no quit." The U.S. Women's Beach Volleyball team didn't give up, and they beat the Swiss at the end.

This stuck out to me as a freelancer and as a coach who teaches other freelancers. I've seen many freelancers quit when things get uncomfortable. I've seen many bloggers quit when they don't see the rewards coming in right away. I've seen a lot of people just shrug their shoulders and give up.

That's why another one of the Olympic business lessons for business owners is to always give it your best shot.

3 Olympic Business Lessons for Every Business Owner was originally published on Duecom blog by Amanda Abella.

Starbucks: Changing the World One Barista at a Time

"Our role as leaders is to celebrate the human connection that we have been able to create as a company, and to make sure people realize the deep level of respect we have for the work they do and how they act. That is the legacy of the company. It's not to get bigger or to make more money."

--Howard Schultz, CEO Starbucks

I met Ashley Peterson, a barista at my local Starbucks, over six years ago during my morning ritual--stopping in for a grande extra hot soy latte on my way to taking my three kids to school, and myself to work. Ashley's big, totally genuine smile was truly comforting in the midst of my morning wrangle. And she looked like she meant it when she looked us in the eyes and said, "Good morning. How is everyone today?"

It wasn't long before Ashley learned all of our names, our favorite drinks and breakfast items. One Fall, my daughter Caroline developed a taste (read: obsession) for Starbucks' pumpkin scones, and then was crushed when Ashley explained that they disappear after Halloween. On our next visit, Ashley handed Caroline a bag with a gingerbread cookie in it, thinking that since she loves pumpkin, she might like this, too. In other words, Ashley just gets it; customer service is second nature to her. Not surprisingly, she was recently promoted and moved to a different Starbucks further uptown. Manhattanites all up and down Broadway have changed their morning migration patterns to get their morning fix from her.

Which is to say, when I began researching companies that are dedicated to creating a human workplace, I immediately thought of Starbucks, i.e. Ashley.

I recently sat down with her to learn more about how she works her magic. And she shared with me three sage bits of advice: Focus on Interactions, not Transactions; Love it, or Let me Know; and Provide Feedback. It Makes People Feel Human. The ideas are a combination of her own smarts, and Starbucks', but the words are hers.

Focus on Interactions, Not Transactions

One of Starbucks' values is treating our customers like family. They want us to get to know them, interact with them, and to connect with them. While we get training on different customer service scenarios, no one can really teach you how to connect...that has to be something that you want to do. I do it because of the atmosphere, because of the neighborhood. I see the kids grow up. One minute the mom is pregnant, and the next year the kid is walking into the store. As a customer, I wouldn't come into a place where I didn't feel welcome or where the people were not trying to get to know me. I love what I do and everyone that works for Starbucks loves what they do. It's a business that's so -- it's different than any other business. We want to actually connect with our customers, we want to better the experience.

Love It or Let me Know

At Starbucks, we are empowered to make the customer experience the best we can. We can say, "Listen, love it or let me know. What can I do to fix it?" I want to teach the baristas around me that customer service is the most important part of our business. Without the customers, we wouldn't be in business. So I really want them to take that seriously. And if that means going above and beyond for the customers, then that's what I want [them] to do. I want everybody that comes into Starbucks to leave happy. I don't want anyone to leave unsatisfied; I don't want anyone to leave upset. I don't want anyone to leave with the thought in their head that they're not coming back.

Provide Feedback: It Makes People Feel Human

I always want to make sure that the baristas feel appreciated, so I always recognize them. To do that, we have green apron cards, where we just write a little note, and let them know what it is that they're doing well. Starbucks wants everyone -- baristas, shifts, assistants or store managers to feel appreciated. You don't have to be a store manager to write these things; baristas write them to each other. So you don't have to be in a certain position to write these things.

In case I haven't been clear, I think the world of this young woman. And so when I heard that Howard Schultz and his wife Sherry were going to be awarded a Public Leadership Award from the Aspen Institute, where I just happened to be for the summer, I made it my business to attend. After Howard and Sherry's inspiring talk on values-based leadership, I was able to hand-deliver this note from Ashley.

Hi Howard,

My name is Ashley Peterson and I've been a partner for 6 years. I recently got a promotion to become a store manager, which I'm really excited about. When I first started at Starbucks, it was just a job for me. Before my Starbucks career, I was on my way to college, but life happened. I was expecting a child, my daughter Mckenzie, who is now five years old. Within a year of being at 81st & Broadway, I knew that Starbucks was for me. With so much I can write, I just want to thank you. Thank you for sharing such a great company with me. Thank you for allowing me to provide for my child. Thank you for the opportunity to work for Starbucks. I will continue to inspire and nurture the human spirit, one person, one cup, one neighborhood at a time.

Ashley Peterson

Here I am, giving Howard Schultz Ashley's letter.

Some of us might feel funny expressing such gratitude to the CEO of a multinational corporation as mighty as Starbucks. But not Ashley, whose first job in the food industry was as a manager at White Castle when she was I5. This girl knows how to work. And Howard Schultz does, too. And he knows how to make the workplace a place for humans like Ashley to thrive. In his words, "We are living in a society where there is a need for human connection and a sense of community. And what we do every day is bring people together."

Me at my local Starbucks in Aspen.

I would be lying if I said I don't miss Ashley since her move uptown. Or that I don't feel a little sad each time I walk by her old store and don't see her beaming smile in the window. But I know this an amazing opportunity for Ashley and for the company. She is excited to use her skills and experience to build a strong culture within her new store. And we will all reap the benefits of the work she'll do, spreading the Starbucks gospel, helping other baristas bring their human to work.