Lawmakers and Transportation Secretary’s family-owned business collectively received millions of dollars in PPP loans


On Monday, the Trump administration in conjunction with the Treasury Department and the SBA, released the names of more 650,000 businesses that received loans of more than $150,000 through the Paycheck Protection Program. In total, the program supported more than 51 million jobs, and distributed $521 billion in loans, Treasury Secretary Steven Mnuchin said Monday.

The Paycheck Protection Program, launched in April as part of the $2.2 trillion CARES Act, was intended to help keep small businesses afloat amid the pandemic. Businesses that are approved for the loans by the recently extended Aug. 8 deadline are able to have a portion of the loan forgiven if they adhere to the Small Business Administration’s guidelines, the body that oversees the PPP,

Members of Congress as well as Transportation Secretary Elaine Chao’s family-owned business, Foremost Maritime, an international shipping company headquartered in New York, received between $350,000 and $1 million through the PPP, the new figures show.


Members of Congress and Transportation Secretary Elaine Chao’s family-owned business, Foremost Maritime, an international shipping company, received between $350,000 and $1 million through the PPP.

A spokesman for the company declined to comment on Sec. Chao’s involvement at the company and the extent to which she may have assisted them with receiving a PPP loan. Separately a spokesman for the Department of Transportation told MarketWatch that “the Secretary has no connection to the business and she had no idea a loan was obtained.”

A spokesman for Chao’s husband, Senate Majority Leader Mitch McConnell, told MarketWatch that he had “no knowledge” of her family business receiving the loan.

Related: Health-care industry was top recipient of PPP loans, data show

Lawmakers and other federal officials normally would have to undergo an ethical review by the SBA’s Standards of Conduct Committee if they were to apply for funds from the SBA. However, on April 13, the Trump administration issued a “blanket approval” ruling allowing lawmakers and other federal officials to sidestep the review process meant to detect any potential conflicts of interest, the Washington Post reported.

That may have also allowed at least four Republican members of Congress to directly benefits from the program.

That includes Oklahoma Rep. Kevin Hern, who owns KTAK Corporation, Tulsa, Okla.-based business that owns five McDonald’s franchises
MCD,
+2.71%
.
KTAK received a PPP loan between $1 million and $2 million, according to data released Monday.

Hern is “not involved in the day to day operations of the business,” his chief of staff, Cameron Foster, told MarketWatch. Because of the PPP, “the family business was able to keep all employees either at their current level of employment or move part-time employees to full time,” he added.

Hern along with four other members of Congress penned a letter to McConnell and Senate Minority Leader Chuck Schumer in March, which advocated for increasing the size of PPP loans available for franchises. Foster declined to comment on the extent to which Kern was involved in helping KTAK obtain a loan.


‘This program has helped employees keep food on the table, pay their rent, and meet their car payments. The program protects paychecks across the state, including employees at the small business owned by my husband and me.’


— Missouri’s Rep. Vicky Hartzler, a Republican, disclosed that her family’s businesses received around $480,000 in PPP loans

Pennsylvania Rep. Mike Kelly, also a Republican, received three loans for three car dealerships he owns amounting to a total of between $450,000 to $1.05 million.

(Kelly did not respond to MarketWatch’s request for a comment.)

Four businesses owned by Oklahoma Rep. Markwayne Mullin, a Republican, collectively received loans between $800,000 to $2.05 million. They were listed as Mullin Plumbing, Inc; Mullin Environmental; Mullin Plumbing West; and Mullin Services.

“Mullin is not involved in the day-to-day operations of the companies,” Meredith Blanford, a spokeswoman for Mullin told MarketWatch.

Ahead of the SBA’s public release of PPP beneficiaries, Missouri’s Rep. Vicky Hartzler, a Republican, disclosed that her family’s businesses received around $480,000 in PPP loans.

“This program has helped employees keep food on the table, pay their rent, and meet their car payments,” Hartlzer said in a statement to MarketWatch. “The program protects paychecks across the state, including employees at the small business owned by my husband and me.”

She said that she applied through her local bank “following ethics guidelines” but did not share information regarding those guidelines.

Separately, S.W. Collins, a lumber and raw material supplier with five locations in Maine, is owned and operated by brothers of Maine Sen. Susan Collins, a Republican.

S.W. Collins received $1 million to $2 million from the PPP, data shows. However Sen. Collins’ spokesman, Christopher Knight, told MarketWatch that the company returned the loan. He also shared that Collins has no financial stake in the company.



Original source link

Do these simple things to turn your retirement savings into big money


There isn’t much about the future that I can predict, much less guarantee to investors.

But here’s one thing I can guarantee: If you achieve as little as 0.5% extra annualized return on your portfolio while you’re accumulating assets — and continue to do so while you’re retired — you will be many, many dollars ahead.

The difference can change your life as well as the lives of your eventual heirs. Much of your investment returns will be determined by things outside your control.

• Were you fortunate enough to be born into a family that provided you with a good education, good financial examples, and maybe even a trust fund?

• Or did you have to scramble for every dollar and every advantage?

• When you’re near retirement or when you finally do make the leap, does the market suddenly take a big turn for the worse and force you to say goodbye to a lot of the money you have saved?

Those and other major factors such as your health certainly shape your financial future.

But how well you do financially over a lifetime is also affected by how well you play whatever cards fate deals you. A good place to start is to grasp just how big a deal that paltry 0.5 percentage point of long-term really is in the long term.

Imagine you and your twin sister are celebrating your 21st birthday together. You decide you’ll each invest $5,000 at once and add the same amount on every subsequent birthday until you reach the “new” expected retirement age of 67.

Now imagine that — for whatever reason — your sister achieves an annual return of 8.5% for that whole period, while your own retirement money earns only 8%.

Let’s ignore taxes and assume you’ll each do this within a Roth IRA.

Your first investment occurs on your 21st birthday, your final one on your 66th birthday. Those 46 investments cost each of you $230,000.

On your 67th birthday, you and your sister compare notes as you prepare to take your first annual retirement withdrawal. You both agree that on this and every subsequent birthday, you’ll each take out 4% of the balance in your account.

If you have carried out this plan faithfully, your Roth IRA should be worth about $2,259,500; your sister’s should be worth about $2,657,300. Just that difference, nearly $400,000, is considerably more than all the annual savings that either of you added over the years.

Your sister’s higher portfolio value on your shared 67th birthday is the first of three financial results she gets for earning an extra 0.5% along the way. The other two are bigger.

You withdraw 4%, or $90,380, for the following year to supplement your Social Security (which we hope will be there) and the other resources you have to support your retirement.

Your sister’s first 4% withdrawal is $106,292 — giving her noticeably more for that first year of retirement. (Maybe she’ll pick up the bill the next time the two of you go to dinner!)

Let’s assume you and your sister are in good health and can expect to live another 30 years, until you’re 97. Let’s assume also that once you’re retired, you each scale back your investment portfolios to take less risk by investing more in bond funds and less in equities.

And (this is crucial) let’s assume your sister continues for whatever reason to earn 0.5% more than you during retirement.

If your Roth IRA earns 6% during retirement and you continue taking out 4% every year, by your 96th birthday you will have taken out a total of $3.54 million — a huge return on those $5,000 investments you made over the years.

This is the second of the three financial results from your long-term plan.

And your sister? She will have been able to take you out to dinner many, many times during retirement. Her total withdrawals will equal $4.48 million.

So far, that extra 0.5% return has been worth nearly $950,000 to her.

The third financial result from all this is the amount each of you has left on your 97th birthday when (for purposes of this example only) we will assume your lives end.

Your Roth IRA will be worth $3.81 million at that point, making your heirs very grateful for your long-term investment success.

Your sister’s account will be worth $5.16 million, amply rewarding her heirs for that extra 0.5% return over many, many years.

Here’s what could be considered the “final score” between these two portfolios:

• The total of all your retirement withdrawals plus what’s left is $7.35 million.

• The comparable total for your sister: $9.64 million.

That difference — about $2.3 million — resulted from just one thing: the extra 0.5% of return over a long lifetime.

I can’t guarantee you (or your sister, for that matter) will be able to achieve returns of 8.5% or 8% or 6.5% or 6%.

But I CAN guarantee that an extra 0.5% return will make an enormous long-term difference. And I can guarantee you’ll get at least that much extra return (and perhaps considerably more) from doing a few relatively simple things that are under your control.

Here are three places to get that 0.5% advantage.

• First, invest in mutual funds with lower expenses. A typical actively managed fund charges annual expenses of 1%. A typical index fund charges much less than one-half that amount. Check.

• Second, bump up your portfolio’s equity allocation by 10 percentage points. Over the past half a century, for example, a switch from 50% in equities to 60% has added more than 0.5% in extra return. Check.

• Third, invest in the S&P 500 index
SPX,
+0.45%
,
but add equity asset classes that have long histories of outperforming that index with little or no extra risk. Here’s an easy and very effective way to do that. And here’s an even simpler way.

That third step is called diversification, and it’s one of the smartest things investors can do.

Just these three simple steps, all completely within your control, will make a huge difference in the long term. As these numbers show, little things can mean a lot. Guaranteed.

Richard Buck and Daryl Bahls contributed to this article.



Original source link

Why your first five years of retirement are critical


If you’re a glass half full person, here’s some good news: About half of retirees are able to maintain their spending levels—in other words, their lifestyles—during their first five years of retirement. 

That’s according to a study by the federal government’s Consumer Financial Protection Bureau (CFPB), which looked at retiree spending habits over a 22-year period ending in 2014.

Obviously, retirees are like snowflakes: no two are alike. Yet the study says most tend to have one important thing in common: They usually spend more in their first five years of retirement than at other times, and then it begins to decline. For example, if you’ve dreamed of traveling the world, checking things off from your bucket list and so forth, you’re more likely to do so in the early stages of your golden years than the latter ones, when you may be slowing down.

And it’s not just splurging in Italy or taking the grandchildren to Disney World. The CFPB cites an external study by the Employee Benefit Research Institute, which notes that retirees also tend to buy fewer clothes, fewer home furnishings and other things as time goes by. 

Read: I want to retire to a rural location with four seasons that gets me out of New York state — so where should I go?

But there’s something else you need to know about why spending declines after a few years, and it’s important. More on that below. 

Naturally, being able to maintain spending is easier for some than others. The CFPB report says that 27% of retirees were able to spend based solely on income from pensions, Social Security, annuities and other sources of income. Another 24% wear able to so by dipping into savings and selling off investments, in addition to the above things. 

But remember: if you dip too deeply into these things—your principal—it raises the chances of you running out of money later on. There’s a common rule of thumb that you should never take more than 4% of your principal a year, but this is something you should discuss with a trusted financial adviser.

So the first five years are telling, and can reveal how the rest of your life, financially, is likely to go. 

Perhaps you’ve heard that a sound retirement is best compared with a three-legged stool: One leg is a pension, one is Social Security, and the third is personal savings. But the stool has gotten wobblier over the years. Fewer companies have defined pension plans than ever before, shifting responsibility to employees to save through 401(k), IRA and other plans. But tens of millions of Americans, for a variety of reasons, haven’t saved much, if anything: Nearly 70% have less than $1,000 stashed away, according to a 2019 survey by GOBanking rates. Countless other studies say pretty much the same. 

Read: My retirement income is $95,000 a year, and I want a walkable, affordable beach town to spend the winter. Where should I retire?

This leaves Social Security, which was never meant to be a primary source of income, yet for millions, that’s exactly what it is. According to the Social Security Administration, “50% of married couples and 70% of unmarried persons receive 50% or more of their income from Social Security.” Even worse: “21% of married couples and about 45% of unmarried persons rely on Social Security for 90% or more of their income.”

If you’re already in retirement, you know where you stand. If you only have one or one-and-a-half of those legs of the stool, chances are you’re still working (or trying to in this economy), and chances are you’ve downgraded your standard of living. It very well could be that Social Security is just about all you’ve got. 

However, for younger workers, perhaps 10 to 15 years away from retiring, the CFPB study offers data that could help strengthen your finances as your career winds down. 

It showed that homeowners (59%) are more likely to be able to maintain spending in retirement than renters (30%). And not surprisingly, homeowners who paid off their mortgages before retiring were in even better shape. Think about that: No monthly payment to anyone.

If this isn’t you, you might want to consider the cost advantages of downsizing. If you’re still working and can’t relocate, can you at least find something smaller and/or cheaper? I recognize that this may be difficult, and perhaps painful, but if it helps you get a better grip of your finances, it may be worth considering. 

And here’s a no-brainer: Stay out of nonmortgage debt. It’s awfully hard to live well in retirement if you’re saddled with car loans, credit card or even student loans—yes, some retirees still have student loans. Get this stuff off your books as fast as you reasonably can. Focus on paying off whatever has the highest interest rate first. 

Finally, remember how I said there’s something else you need to know about why spending declines after a few years? Many people, forced into a corner financially, have no other choice. The CFPB found that retirees who couldn’t maintain their standard of living wound up slashing spending by 28% over their first five years in retirement. Of that number, 17% cut spending by more than half. 

This is sobering data. Nobody wants to cut their spending—their lifestyle—by half. But if retirement is still on the horizon for you, consider taking steps now to bolster your situation—before you’re forced to later. 

Now my question (s) of the month: If you are eyeing retirement what are you doing now to strengthen your finances? And if you are already in retirement, have you been forced to make any changes? Tell me your stories. Write to me—Paul Brandus—at RetireBetterMarketWatch@gmail.com. Thanks and I hope you’re staying safe this summer. 



Original source link

Trump approves 5-week extension for small business pandemic loan applications By Reuters


© Reuters. U.S. President Donald Trump holds press briefing on the U.S. economy and unemployment numbers at White House in Washington

By Katanga Johnson

WASHINGTON (Reuters) – U.S. President Donald Trump on Saturday signed into law a deadline extension to August 8 for small businesses to apply for relief loans under a federal aid program to help businesses hurt by the COVID-19 pandemic, the White House said.

The extension to the Payroll Protection Program (PPP), which was launched in April to keep Americans on company payrolls and off unemployment assistance, gives business owners an additional five weeks to apply for funding assistance plagued by problems.

An estimated $130 billion of the $659 billion provided by Congress is still up for grabs. Critics worry the U.S. Small Business Administrator’s office, which administers the loan, may continue to experience challenges in fairly distributing the funds.

From the outset, the unprecedented first-come-first-served program struggled with technology and paperwork problems that led some businesses to miss out while some affluent firms got funds.

The SBA’s inspector general found in May that some rural, minority and women-owned businesses may not have received loans due to a lack of prioritization from the agency.

Reuters reported https://www.reuters.com/article/us-health-coronavirus-usa-ppp-exclusive/exclusive-us-small-business-program-handed-out-virus-aid-to-many-borrowers-twice-idUSKBN2391S9 on Thursday that a technical snafu in a U.S. government system caused many small businesses to receive loans twice or more times, nearly a dozen people with knowledge of the matter said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Original source link

Siemens sees up to 20% drop in business in April-June quarter, CFO tells Boersenzeitung By Reuters


© Reuters. The headquarters of Siemens AG is seen in Munich

FRANKFURT (Reuters) – German engineering company Siemens (DE:) saw the volume of business contract by as much as 20% in the three months to June and activity in 2021 would stay below 2019 levels, the chief financial officer told Boersenzeitung (BoeZ).

Ralf Thomas told Saturday’s edition of the newspaper that the company’s financial third quarter, which runs April to June, “will be a big challenge for us, as for most other market participants as well” due to the coronavirus crisis.

“However, it will not be a bottomless fall,” he said, adding that the business volume of short-cycle activities had likely contracted by between 10% and 20% in the period.

Thomas had said in May he expected a 5% drop in revenue in the financial year ending in September, after guiding for moderate sales growth before the virus outbreak.

He did not rule out moves to cut capacity in some business areas, but left open where this could be.

He said activity in 2021 would not reach 2019’s level across all businesses or regions, but said Siemens had a competitive advantage over rivals in some areas, without offering details.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Original source link