18May

Powerball vs. Mega Millions – Annuity vs. Lump Sum

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With the Powerball jackpot hitting $600 Million today, lottery fever has swept the nation. The Mega Millions jackpot for last night’s drawing was also quite high at $190 Million – with two tickets winning in New Jersey and Virginia. But one glaring difference stands out between the two lottery jackpots and it’s not the jackpot amount. The difference between the lump sum payout and the annuity option are very different amongst the two lotteries and I think adds a layer of confusion.

For this week’s jackpots, the $190 Mega Millions has a cash value of $140 Million (73.7% of the stated jackpot). The Powerball is currently at $600 Million with a cash value of $376.9 Million (62.8% of the stated jackpot). First of all, I am a proponent of advertising the cash value of a jackpot and not the annuity value, simply because I think it is a deceptive way to overstate the true value of the prize. The value of the jackpot should be calculated as its net present value on the day of winning.

Why the difference between the annuity payouts? According to the Powerball FAQ page, the difference in the annuity and cash value option between the two lotteries is a matter of the type of annuity the winnings are invested in and the length of that annuity. The Powerball annuity pays out over the course of 29 years and each annual payment is increased by 4% to keep pace with inflation. It also appears that the Powerball annuity may be invested for a higher rate of return than the Mega Millions. The Mega Millions annuity pays out over a shorter period of time, 25 years and is comprised of equal sized payments.


What does all this mean? Well, I stand by my earlier statement that the advertised jackpot should be the cash value of the prize and it should be up to the winner to decide how to invest their winnings. This would make the prize value more transparent and less likely to be manipulated for the purpose of marketing. I don’t see this happening anytime soon because, let’s face it, $600 million sounds a lot sexier than $376.9 million. But if I were to win (and the vast majority of winners do this) I will take the lump sum cash option and won’t see a check for $600 million, but only $226 million after federal and state taxes are withheld. I say “only” as if I’m dissatisfied but I assure you I would be ecstatic.

But, this is where the marketing deception bothers me the most… a $600 million jackpot win will result in a $226 million deposit to my bank account. That’s a BIG difference!

16May

The “numbers don’t matter” stock market rally

Posted in Investing | Leave a comment

I’ve been following the financial markets very closely for over a decade and the ongoing bull market is nothing short of dumbfounding.

A recent trend in earnings numbers released by many retailers and restaurant firms lately indicates shrinking top-line revenue, signalling a decline in consumer spending, but then reporting an increase in the bottom-line earnings number. The only way this is achievable is through substantial cost-cutting and typically that means shrinking the payroll, which also goes hand in hand with the sharp increase in jobless claims this month. Companies can only trim so much fat to “make the number” until there will be nothing left to cut and the business will have been hurt by poor quality staffing and potentially disgruntled customers.

What happens when these artificially inflated bottom-line numbers come back to reality? I honestly don’t know.

Case in point, Netflix recently released earnings and the GAAP reported number was a huge miss, coming in at a paltry 5 cents per share. But the company decided instead to promote a different earnings number of 31 cents per share by excluding the costs of certain content acquisition debt that had been paid during the quarter.

Netflix takes “cooking the books” to a whole new level by excluding over $6 billion in debt from the balance sheet and then when it does actually make payments on the debt, excluding it from impacting earnings! This is blatant manipulation and the worst part is that The Street buys into it and sent Netflix shares rocketing 40% higher in a month to a P/E ratio of over 700.

I’m left sitting here shaking my head…

05Apr

Pizza Hut’s New Crazy Cheesy Crust Pizza

Posted in Food | Leave a comment

The other night I decided to try Pizza Hut’s new Crazy Cheesy Crust Pizza. It just happened to be the first day of the new product’s national launch and I’m always up for new kinds of pizza.

If you haven’t already, sign up for the Hut Club and you can get a free order of Stuffed Pizza Rollers with your first purchase.

I ordered a Crazy Cheesy Crust Pizza with a free order of Pepperoni Stuffed Pizza Rollers and the total came to 12.99 plus tax. Not bad for something that will end up being three or four meals for me!

I arrived early to pickup my order and the Pizza Rollers had just come out of the oven but the pizza was not ready yet so I waited for a little bit.  I think I may have been one of the first customers to order the new pizza because when it came out of the over, the oven tender didn’t know how to cut it and had to ask the manager.

When I got in the car, I took the first picture of the Crazy Cheesy Crust Pizza. It looked pretty good considering it is a new product and I was looking forward to getting home to taste it.

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The pizza comes with one-topping and 16 cheese filled pockets around the outer edge. The cheese within the pockets is a 5-cheese blend and does taste quite different from the cheese on the rest of the pizza. I thought the flavor in the cheese pocket was a bit sharp and would have preferred a more mild flavor, but overall it is a great alternative to a traditional crust pie.

I was able to take some better pictures once getting home and here they are:

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28Mar

Huntington Bank $100 New Account Bonus

Posted in Free Stuff, Uncategorized | Leave a comment

One thing I love doing is making free money. You can earn a free $100 bonus by signing up for an Asterisk Free Checking account at Huntington Bank by March 31st and either setting up direct deposit or make 10 debit card transactions within the first 60 days. The $100 bonus will be deposited into your new checking account within 90 days of account opening.

The best part about this offer is that the checking account is absolutely free! No maintenance fees or minimum balance requirements!

26Mar

ShaunCarter.com rebranded as Shauner.com

Posted in Blogging | Leave a comment

A lot has changed over the last couple of years during my blogging hiatus. In my effort to land a job when I graduate from college next month, I chose to re-direct my Shaun Carter.com domain name to my LinkedIn profile and I have now transferred that blog to my Shauner.com domain.

I have been successful in my job search and will begin after school finishes this semester. I am hoping to be able to pick up where I left off with my personal blog and am also developing a network of financial advice blogs that I plan to launch this coming summer. I feel I have a growing repertoire of financial knowledge and experience to share with others and my degree in Economics has only helped booster that passion.

New college graduates are faced with many challenges these days that were never a problem for previous generations such as skyrocketing tuition, ballooning student loan debt, high unemployment and depressed wages. These are some of the first topics I expect to tackle here and in my first financial advice blog geared toward those in their twenties.

23Jan

If you work really hard and you’re kind, amazing things will happen. – Conan O’Brien

Posted in Entertainment, News | 1 Comment

Conan O’Brien just finished his last episode of The Tonight Show. I have not been a long-time fan or follower of O’Brien, but the recent controversy surrounding NBC’s decision to shake up the late night line up had me tuning into his show regularly for the past couple of weeks.  I grew to enjoy his show and comedic delivery and felt the final episode tonight was the best one since I started watching.

The title of this post “If you work really hard and you’re kind, amazing things will happen.” is one of the final things Conan O’Brien said at the end of his final Tonight Show episode and really struck a chord with me. During the episode, O’Brien had Tom Hanks on the show and they reminisced about the old days when he was a young red head kid trying to impress an accomplished actor with his raw comedic talent. O’Brien expressed his hatred of cynicism and encouraged the young viewers to be kind and work hard to get what they want in life.

I’m feeling extremely motivated and inspired by his words tonight and will be keenly following his career and working really hard on my own future, and being kind along the way.

22Dec

Are We Really Out of the Recession?

Posted in Uncategorized | 1 Comment

Economic indicators are pointing to a recovery, but I’m not so sure many working-class Americans would agree. With official unemployment in my home state of Michigan at 15% and the realistic number in the 20′s, I don’t see an economic recovery anytime soon, especially in Michigan.

Home sales are up, economic growth is up, jobs are still being lost (albeit at a slower pace) and more Americans saving rather than spending is what will keep the downturn/recession stretching into 2010. Much of the increase in home sales could be attributed to the government stimulus expiring and buyers rushing to make their purchase to claim the $8,000 tax credit. Employers continue to belt tighten in anticipation of further economic difficulty and in turn are essentially compounding the problem by supressing payroll numbers to save costs.

In 2009 I earned most of my income working in another state because of the lack of jobs in my own. At the same time I have seen my college tuition rise at unprecendented rates making it increasingly difficult to gain the degree needed to work in my desired profession. At what point does it not make economic sense for me to invest in a college degree? That point is fast approaching.

10Dec

Get 25% Off at GoDaddy

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I received a renewal notice from GoDaddy today and decided I should get it taken care of and also discovered a 25% off coupon code for purchases over $100. I decided to go ahead and renew ShaunCarter.com for 9 years using that coupon code and was able to bring the per year cost of the domain down to around $6 by renewing a couple other domains to bring the order total to $100 – not a bad deal.

BTPS255 – 25% OFF $100 purchase at GoDaddy.com

08Dec

Tiger Woods Saga Better For News Outlets Than Michael Jackson’s Death

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I don’t really care about Tiger Woods’ personal life and think what he does is his own business. But apparently the hoopla surrounding the unfolding “transgressions” has proven extremely lucrative for news agencies, specifically Yahoo and The Wall Street Journal according to The Huffington Post. They claim that web traffic is exceeding what was experienced after Michael Jackson’s death.

While Yahoo and WSJ were the only ones to publicly say that the web traffic generated by Tiger will substantially increase ad revenue for the quarter, it will undoubtedly help out many other online news agencies as well such as, MSN.com, CNN.com, Google.com and others. Could this create a “Tiger Effect” that could boost results for these companies in the fourth quarter of 2009? I think it just might and if so this could be a good time to enter into long positions in these companies as the market has taken a bit of a beating the last few sessions and pricing is a bit more attractive.

On a side note, Tiger lost his first endorsement – although Gatorade claims it was already planning to phase out the product, their timing is quite a coincidence.

07Dec

Repaid TARP Funds Being Hijacked

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I think it’s appalling that the Obama administration is trying to find a way around provisions in the TARP legislation to use the extra funds for job creation stimulus instead of for paying down the deficit as was originally agreed  and laid out in the law.

The government recently announced that the losses incurred by TARP will be $200 Billion less than was originally projected. Any monies left over from TARP are to be used to pay down the spiraling federal deficit. I am in 100% agreement that this “extra” $200 Billion be put toward retiring some of the debts incurred by TARP, but now Obama is trying to find a loophole to use it for more stimulus spending.

I have long been a proponent of paying down the national deficit because, quite frankly, it makes good financial sense. In the long run, reducing and eliminating the federal deficit would allow LOWER tax rates AND increased government spending because of the savings on interest payments. In 2008, 18% of all incoming taxes to the federal government went toward interest payments on the national debt. This percentage is artificially low because of historically low interest rates and will climb significantly higher in the future as rates increase.

That 18% is $454 Billion… imagine what we could do with all that extra money lying around. Lower taxes, better schools, and much, much more.