Financialization is profit margin growth without labor productivity growth.

Financialization is the zero-sum game aspect of capitalism, where profit margin growth is both pulled forward from future real growth and pulled away from current economic risk-taking.

Financialization is the story of using share buybacks to mortgage the future of public companies over and over and over again for the primary benefit of today’s management shareholders.

Texas Instruments

TXN, +0.17%

recently caught my eye. And while I decided to dig into its story, what happened isn’t unique to this company.

Texas Instruments is, in fact, a poster child for financialization. And there’s nothing illegal or incompetent about it.

I’m going to focus on a five-year stretch of the company’s financials, from 2014 through 2018. This is where the truly meteoric stock-price appreciation took place over the past 10 years, even with the stock market’s swoon in the fourth quarter of 2018, and comparing full-year financials makes for a more apples-to-apples comparison.

But before I get into the numbers, let me tell you the story.

The Texas Instruments story is free cash flow and earnings growth that management “returns to shareholders”. Earnings per share on a fully diluted weighted basis has more than doubled from 2014 through 2018, net income available to shareholders on a GAAP basis has doubled, and cash from operations has almost doubled.

What makes this a story of financialization is the why of the very real free cash flows and earnings growth and the how of the allocation of those cash flows and earnings.

The why is pretty simple. Management has cut its cost structure to the everlovin’ bone.

At the end of 2013, the company’s cost of goods sold (COGS) was 48% of revenues. By the end of 2018, COGS was 35%. Gross margins went from 52% to 65%.

At the end of 2013, sales, general and administrative costs (SG&A) was 15.2% of revenues. By the end of 2018, SG&A was 10.7%.

At the end of 2013, research and development expenses (R&D) was 12.5% of revenues. By the end of 2018, R&D was 9.9%.

And while it’s not part of the fixed cost structure, Texas Instruments was a keen beneficiary of the Tax Cuts and Jobs Act of 2017, seeing its 2017 tax rate of 16% cut to 7% in 2018 and reducing its tax bill by $1.2 billion.

See, there was zero revenue growth at the company from 2014 to 2015 (flat in both years), and tiny growth from 2015 to 2016 (less than 3%). But there was healthy revenue growth from 2016 to 2017 (11% or so) and so-so growth from 2017 to 2018 (6% or so). And when you’re cutting costs like Texas Instruments was doing over a multiyear period, even mediocre top-line increases can lead to dramatic profit increases.

How dramatic? Cash from operations was $3.9 billion in 2014, but by 2018 was $7.2 billion. Nice!

Over this five-year period, Texas Instruments generated $25.5 billion in cash from operations and $32.5 billion in earnings before interest, taxes, depreciation and amortization (Ebitda).

From a cash perspective, of course you’ve got to pay taxes out of all that, which comes to about $7 billion over the five years, but you can defer some of this to minimize the cash hit. And you’ve got to pay interest on the $5.1 billion in debt you’ve taken out, which comes to … oh yeah, basically nothing … thank you, Fed! And you’ve got to account for depreciation and amortization, which comes to $5.2 billion over the five years … but this is a non-cash expense, so it’s not going to dig into that cash hoard. And you’ve got some cash puts and takes from working capital and inventory and what not, but nothing dramatic. And you’ve got $1.3 billion in stock-based comp, but again that’s a non-cash expense … whew!

And — oh, here’s an interesting cash windfall — Texas Instruments raised about $2.5 billion by selling stock over these five years. Wait, what? Selling stock, not buying stock? Selling stock to whom? Hold that thought …

Put it all together and I figure the company generated about $25 billion in truly free cash flow over this 5-year span. What is management going to spend this treasure chest on?

Well, surely you’re going to spend a healthy amount on capital expenditures, right? I mean, you took a $5.2 billion depreciation and amortization charge over this time span, and we all know that semiconductor manufacturers need to stay on that bleeding edge of technological innovation to keep earnings growing in the future, right?

Nope. Texas Instruments spent $3.3 billion on fixed assets from 2014 through 2018, one-third of that total in 2018. Some significant proportion of that was maintenance capex as opposed to growth capex.

Well, if you didn’t spend your money on property, plant and equipment, then surely you spent a healthy sum in M&A, right?

Nope. $1.6 billion over five years. Tuck-in stuff.

I guess you were paying down debt, then. Deleveraging up a storm, right?

Nope. Paid down debt by $500 million a year in 2014, 2015 and 2016, but increased debt by $500 million in 2017 and $1 billion in 2018.

So it’s dividends, right? This is where all the cash went?

Now we’re getting there: $9.1 billion in dividends over five years. A healthy direct return of capital to shareholders.

But it’s just a warm-up to the main event: $15.4 billion in buying back stock from 2014 through 2018.

Between stock buybacks and dividends, that’s $24.5 billion in cash “returned to shareholders”, essentially 100% of the free cash flow generated by the company over the past five years.

Now here’s the kicker.

What sort of share-count reduction would you think that this $15.4 billion in buybacks gets you? I mean, that is the logic here, that investing $15.4 billion in the company’s own stock is the best possible capital allocation that the company can make.

I would have guessed that surely $15.4 billion would retire anywhere from 20% to 25% of the shares outstanding over this time frame, with the stock price ranging from $40 to $100.

In truth, Texas Instruments retired only 10% of its outstanding diluted shares with its $15.4 billion investment, going from 1.1 billion shares to 990 million shares.

But wait, there’s more.

From 2014 through 2018, Texas Instruments bought back 228.6 million shares for $15.4 billion. That works out to an average purchase price of $67.37.

Over that same span, Texas Instruments sold 90.8 million shares to management and board members as they exercised options and restricted stock grants, for a total of $2.5 billion. That works out to an average sale price of $27.51. The difference in average purchase price and average sale price, multiplied by the number of shares so affected, is $3.6 billion.

In other words, 40% of Texas Instrument’s stock buybacks over this five-year period were used to sterilize stock issuance to senior management and the board of directors, who received $3.6 billion in direct value from these buybacks.

But wait, there’s more …

As of Dec. 31, 2018 there were still 40 million shares outstanding in the form of options and restricted stock grants to management and directors, at an average weighted exercise price of $55. At today’s stock price, that means an additional $2.6 billion in stock-based compensation has already been awarded.

Well golly, these surely must have been amazing managers and directors to warrant that sort of stock-based compensation in addition to their cash compensation.

This is the performance of Texas Instruments (in white) and the iShares PHLX Semiconductor ETF

SOXX, -0.51%

(in gold) over the same five years. Texas Instruments is the fifth-largest position in that ETF and that underlying index, with a 7.1% weight.

For the past five years, Texas Instruments has been nothing more than a tracking stock for a passive semiconductor index. And for this privilege, shareholders have rewarded management and directors with $6.2 billion in stock, plus a couple of billion in cash compensation.

That’s why it’s never been a better time in the history of the world to be a senior manager of a publicly traded company.

It’s a crying shame, because here’s the thing … the total return on owning Texas Instruments is, in fact, 15% higher than the ETF over this five-year span.

Because of the dividend.

Do you want to run your company for cash generation? Do you want to return that cash to shareholders? Great!

Use a special dividend, not buybacks.

There, fixed it for you.

Ben Hunt is co-founder and chief investment officer at Second Foundation Partners. This is an abridged version of “Yeah It’s Still Water,” which ran on his Epsilon Theory website. Follow him on Twitter @EpsilonTheory.

Also from Ben Hunt: This perversion of capitalism is causing the zombieficiation of our economy

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Avis Budget Group Inc. stock tanked in the extended session Thursday after the car-rental company posted an adjusted third-quarter profit well bellow market expectations.


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 said it earned $189 million, or $2.50 a share, in the quarter, compared with $213 million, or $2.68 a share, in the year-ago period.

Adjusted for one-time items, Avis earned $223 million, or $2.96 a share, compared with $265 million, or $3.33 a share, a year ago.

Revenue fell slightly to $2.75 billion from $2.78 billion a year ago.

Analysts polled by FactSet expected adjusted earnings of $3.64 a share on sales of $2.84 billion.

Avis made “further progress” on partnerships with ride-hailing companies where it said it increased its ride-hail fleet by nearly 60% from the previous quarter.

“We remain focused on improving our core rental car business, while driving innovation to continue our transformation into a mobility service provider,” Chief Executive Larry DeShon said in a statement.

Avis guided for 2019 revenue between $9 billion and $9.2 billion, and an adjusted net income between $3.35 a share and $4.20 a share. The analysts surveyed by FactSet expect a 2019 adjusted profit of $3.96 a share on sales of $9.2 billion.

Avis and other car-rental companies have felt the pinch of people eschewing rentals in favor of ride-hailing and ride-sharing, as well as of an oversupplied used-car market. Car-rental businesses have to off-load thousands of vehicles they retire from their rental fleets.

Avis shares have gained 33% this year, compared with gains of 21% and 16% for the S&P 500

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 and the Dow Jones Industrial Average.

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Almost 200,000 Californians have been ordered to evacuate as ferocious winds drove several wildfires near Los Angeles, San Francisco and elsewhere. Many fear they may yet again return to a home ravaged by fire.

For Californians in fire-prone areas, this has been a perennial cycle. As a result, a growing number of residents in the state want to ban people from building in areas at greatest risk.

That’s because taxpayers bear the burden of protecting homes in dangerous areas when fire breaks out — and they often help foot the bill when it’s time to rebuild. A recent assessment showed that 1 in 4 Californians live in an area at “high risk” of wildfire. And people tend to want to rebuild in the same spot that was hit by a disaster.

As a behavioral economist who studies the psychology of decision-making, I try to understand people’s motivations before taking a position in a policy debate. I believe there’s a better way for policy makers to achieve the same goal of getting people to avoid building in disaster-prone areas without forcing people from their homes.

The role of behavioral economics

In behavioral economics, there’s something known as the endowment effect.

The endowment effect is basically the idea that people overvalue things they already own. And it helps explain the common and seemingly irrational desire of many homeowners to rebuild in places at great risk of wildfire, hurricanes or other natural disasters.

Behavioral economists Daniel Kahneman, Jack Knetsch and Richard Thaler were the first to explain this effect in 1990. They conducted an experiment in which half their subjects were given a coffee mug. They asked those subjects to name the lowest price at which they’d be willing to sell their mug. They then asked those without mugs how much they would be willing to pay to buy one.

Since the subjects who received a mug were randomly chosen, there should have been little difference between the selling and buying prices, which represent how each group valued the mug.

Instead, the researchers discovered a significant gap between two groups. The median selling price, representing the people who already had mugs, was $5.79, more than double the $2.25 people were willing to pay. The conclusion is that someone with an item values it a lot more than someone who does not have it regardless of their actual preferences.

In the context of California wildfires or other natural disasters, the endowment effect says that someone who owns a damaged or destroyed home will have a strong preference for rebuilding over moving somewhere else.

To ignore this preference by putting an outright ban on rebuilding disregards the wishes of these people. It also squanders the potential impact of increased economic activity as a result of the new construction. Areas recovering from disaster are in great need of this kind of stimulus.

Creating the right incentives

At the same time, I don’t think we should stand idly by and watch people continue to build homes in disaster zones. Such an approach creates an unfair burden for the state, which spends a significant amount of money providing disaster relief to affected areas.

Rather, my view — which is common among economists — is that the best policy when an activity imposes costs on society is to create a pricing system that pushes those costs back onto the individuals responsible.

With fuel for gas-guzzling vehicles, for example, the best policy is a tax equal to the cost that the pollution causes for society — this is how carbon pricing works. Such taxes are called Pigouvian taxes after economist Arthur Pigou, who developed the concept of “externalities” — or the unrelated side effects of some economic activity.

In the case of disaster zones, municipal property taxes need to reflect the additional costs of public services like disaster relief that are often provided by state and federal authorities. Governments can then use the extra revenue to finance disaster mitigation efforts or other initiatives in the public interest.

The key thing is that the tax creates a disincentive to engage in the undesirable activity short of an outright ban. And research shows these kinds of taxes are effective.

A challenge with the implementation of such a policy is that it is hard to assess the costs of relief in advance.

However, the insurance industry is very good at risk and cost assessment, and governments can use their methods to achieve the right pricing mechanism. The additional property taxes that would result would make living in disaster-prone areas more costly — and some people would certainly be willing to bear this burden — but this is what society needs in order to reduce the activity.

This softer approach, which could achieve the same ends as a heavy-handed ban, is a much better way to create a financial incentive for people to avoid rebuilding in dangerous parts of the country — saving taxpayer dollars and avoiding the inconvenience of preemptive blackouts like we’ve seen recently in California.

Alexander Smith is an associate professor of economics at Worcester Polytechnic Institute in Worcester, Mass. This was first published by The Conversation — “Wildfire rebuilding: Taxes are better than bans for keeping homeowners from rebuilding in fire-plagued areas.”

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Rambler mugs and thermoses sit on display for sale at the Yeti Holdings flagship store in Austin, Texas, on Wednesday, Sept. 12, 2018.

Sergio Flores | Bloomberg | Getty Images

Yeti looks to round out its wholesale footprint and mitigate the impact of tariffs headed into the final stretch of 2019.

The company reported its third-quarter earnings on Thursday, noting a new wholesale partnership with Lowe’s and increased inventory to avoid a potential impact of the looming Dec.15 tariffs on certain Chinese imports.

The high-end cooler maker already has wholesale partnerships with Dick’s Sporting Goods, Bass Pro Shops, Cabela’s, West Marine and Williams-Sonoma, among others, but CEO Matt Reintjes said the company wanted to expand into the do-it-yourself space.

“We have targeted Lowe’s Home Improvement as both a strong rounding out within the DIY space and a broader extension with the pro customer for the yeti brand,” Reintjes said in an earnings call.

Yeti will gradually roll out products at Lowe’s through the end of 2019 and, based on the success of the partnership continue the roll-out through early 2021.

The company’s direct-to-consumer net sales increased 31% during the third quarter to $92.90 million, compared with $71.20 million in the year-earlier period.

Tariff mitigation

Yeti increased its inventory levels in the third quarter, particularly in drinkware, in advance of Trump administration tariffs on Chinese production, currently scheduled to take effect on Dec. 15.

Nearly all of the company’s drinkware products are subject to the 15% levy. Drinkware made up 56% of net sales in Yeti’s third quarter. The company increased inventory by 33% to $209.15 million, compared with $157.67 million at the end of the year-earlier period, in an effort to mitigate that financial hit.

Yeti also increased inventory by 21% during the second quarter in anticipation of the tariffs that were originally scheduled to take effect on Sept. 1.

“We brought in inventory earlier in the year to support fourth quarter in advance of the earlier rumored implementation of the drinkware tariffs,” Reintjes said in a phone interview with CNBC after the earnings report. “We’ll work that down through the fourth quarter.”

“We expect to be back to a more normalized inventory position in the first half of 2020 barring continued movement in the tariff conversation,” he said.

The Yeti logo is seen on a cooler for sale at the company’s flagship store in Austin, Texas.

Sergio Flores | Bloomberg | Getty Images

Reintjes said the company does not have plans to move its drinkware supply chain out of China because “the environment is so fluid right now” and the company does not want to make big decisions for the short term.

“We’re going to make what we believe are good long-term decisions for the business and for our product,” Reintjes said. “There are a number of levers that we use to mitigate tariffs before you think about mitigating a supply chain.”

However, Yeti has been relocating its supply chain for “softer items” like coolers and bags to areas outside of China, mostly Southeast Asia. Yeti’s soft cooler and bags found their way onto a list of $250 billion worth of Chinese imports subject to U.S. tariffs. The company hopes to have this supply chain completely moved out of China by the end of 2019.

Earnings and guidance

Yeti raised its 2019 full-year outlook in its third-quarter earnings report on Thursday. The company now expects net sales to increase between 14.5% and 15.0% versus the previous outlook of between 13.5% and 14.0%. The company also expects adjusted earnings of $1.12 to $1.14 per share, compared with the previous forecast of $1.07 to $1.09 per share, according to the earnings report.

Yeti beat analysts’ expectations for the third quarter, reporting adjusted earnings of 30 cents per share versus 26 cents per share forecast by Refinitiv consensus estimates.

The company credited the strong quarterly results to new products and expanding gross margins.

Shares of Yeti were down more than 5% on Thursday. Year to date, the stock is up a little over 120%.

Nine analysts have a buy or overweight rating on the stock, while one has a hold rating, according to FactSet. The average price target on the stock is $32.69.

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A researcher prepares a sample inside a laboratory at BeiGene Ltd.’s research and development center in Beijing, China, on Thursday, May 24, 2018.

Gilles Sabrie | Bloomberg | Getty Images

Biotechnology company Amgen announced Thursday it is investing $2.7 billion in BeiGene, taking a 20.5% stake in the Chinese biotech firm, valuing it at roughly $13.5 billion.

Under the all-cash deal, Amgen will pay BeiGene shareholders $174.85 per share, a 25% premium to BeiGene’s closing price on the Nasdaq on Wednesday.

BeiGene’s stock jumped 7% in after-hours trading Thursday. Amgen shares were down about 1%. 

BeiGene will commercialize some of Amgen’s cancer drugs to be sold on the Chinese market, the companies said in a statement. Amgen will also work with BeiGene on developing 20 new drugs from its cancer pipeline in China and elsewhere. The deal, expected to close in early 2020, increases Amgen’s footprint in China’s rapidly growing pharmaceutical market.

“For a number of years, we’ve had as one of our key focuses for the company building out the business globally,” Amgen Chief Financial Officer David Meline told CNBC. “This is an important piece that was remaining for us, and we think that will fill out that chessboard, if you will.”

BeiGene develops molecularly targeted and immuno-oncology drugs to treat cancer. With roughly 4 million people diagnosed with cancer annually, Amgen says it has expanded its geographic presence from approximately 50 to 100 countries since 2011.

“The focus now is ensuring novel therapies that address a high unmet medical need are approved as quickly as in the West or other parts of Asia,” said Murdo Gordon, Amgen’s executive vice president for global commercial operations.

The deal also comes amid the ongoing U.S. trade war with China. President Donald Trump has recently pressured U.S. firms to restrict financial investments in Chinese entities.

Meline said Amgen is “very conscious of the dialogue that’s going on between the governments.”

“We don’t expect that there will be any reasons why there would be political pushback, because it’s pretty straightforward, to be honest,” he added.

John Oyler, chairman and CEO of BeiGene, also commented on trade talks, saying the company is “just focused on trying to fight cancer.”

“We say this all the time, but cancer is a common enemy,” Oyler said. “It doesn’t have any borders, and our company doesn’t have any borders. BeiGene’s a global company; we happen to have a lot of strength in China, but we’re fighting everywhere we can. We do believe this is a global fight.”

Goldman Sachs is acting as the financial advisor to Amgen, while Latham & Watkins is serving as a legal advisor. Morgan Stanley is acting as exclusive financial advisor to BeiGene.

BeiGene will spend as much as $1.25 billion on the development program. Amgen will pay royalties to BeiGene on the sales of these products outside of China, with the exception of KRAS drug AMG 510.

— CNBC’s Meg Tirrell contributed to this report.

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FBI agents walking into the home of United Auto Workers President Gary Jones after removing materials from the location on Wednesday, Aug. 28, 2019.

Michael Wayland/CNBC

DETROIT – The scope of an ongoing federal corruption probe into the United Auto Workers continues to widen as the union attempts to solidify new labor contracts with the Detroit automakers.

Federal prosecutors on Thursday charged Edward Robinson, a union official with ties to UAW President Gary Jones, with conspiracy to embezzle union funds and conspiracy to defraud the United States. Both are felonies punishable by up to five years in prison.

Robinson, who lead a regional UAW community action program council where Jones served as director, is accused of conspiring with union leaders to “embezzle, steal, and unlawfully and willfully abstract” more than $1.5 million in cash and assets for personal gain to fuel “lavish lifestyles,” according to a new criminal filing.

Jones and his predecessor, UAW President Dennis Williams, have been targeted by federal officials as part of the investigation, including raids on their homes in August, but have not been charged with any crimes. The Detroit News on Thursday, citing unnamed sources, identified both men as being unnamed co-conspirators in the filing that outlined the charges against Robinson.

The UAW did not immediately respond to the filing or charges against Robinson, who could not be reached for comment.

Robinson was charged in a criminal information filings, which indicates a guilty plea is expected.

The alleged illegal activities, according to the filing, occurred from about 2010 until last month. The timeframe signals federal prosecutors are continuing to focus on retired and current UAW officials.

Senior union officials involved in the scheme allegedly bought lavish dinners, hundreds of thousands of dollars in hotels and private villas and tens of thousands of dollars in cigars as well as golf green fees and merchandise, according to the filing.

The allegations against Robinson – the 12th person charged as part of the probe – come a day after the UAW, including Jones, announced a new tentative deal with Ford Motor.

Ten people, including seven with the union, have been sentenced to prison as part of the probe. UAW Region 5 Director Vance Pearson, who took a leave of absence from the union, has been charged as part of the investigation but not been convicted.

The investigation was expected to add to the already-contentious contract negotiations between the UAW and Detroit automakers.

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Although the price of college is soaring and a four-year degree isn’t the guarantee of financial security it once was, 70% of parents surveyed by the National Center for Construction Education & Research (NCCER) said they wouldn’t advise their child to embark on a career in construction. They may want to rethink that.

Not only is there a dire need for the next-generation workforce in the construction trades, jobs are widely available and often high-paying. What’s more, training usually comes with no student debt.

Construction work: long stigmatized

Brian Turmail, vice president, public affairs and strategic initiatives at Associated General Contractors of America (AGC), says for decades, construction and trades jobs have been stigmatized and viewed as a “last resort, instead of a career opportunity that ought to be on the menu to be considered.”

Adds Turmail: “It’s been so impressed upon us that the path to success in the 21st century lies through a four-year traditional college education.”

But parents of teens and 20-somethings should understand that things have changed.

For one thing, the construction industry is desperate for builders, plumbers, electricians and others, because the field is aging. As boomers in construction retire, their jobs aren’t being filled quickly enough to meet the demand.

According to an AGC and Autodesk survey, 80% of construction firms are struggling to fill hourly craft positions, which make up most of the construction workforce. And they expect the problem to continue.

Helping to fill many job openings in the trades

Analysts predict more than 3 million skilled trade jobs will remain open by 2028. A recent survey by the National Association of Home Builders revealed that 69% of its members are already experiencing delays in completing projects on time due to a shortage of qualified workers.

It’s one reason why more than 60 organizations, led by home improvement retailer Lowe’s, recently launched Generation T, a movement to help fill the skilled trade gap and change public perceptions of the skilled trades in America. It’s creating a national marketplace to connect people to prospective apprenticeships and jobs.

Even with no experience, Turmail says, jobs in the trades are easy to come by.

“If you can pass a drug test, if you’re willing to work outside, willing to be part of a team and willing to show up early and work hard, you can find a job in construction in just about every market in this country,” he explains.

For example, the Generation T site forecasts more than 1 million opportunities for carpenters and nearly 650,000 for plumbers over the next decade.

Construction jobs are also becoming more tech-centric, which the industry hopes will appeal to a younger generation and their parents. iPads, drones and robots are regular fixtures on job sites, and some heavy equipment can be operated via GPS and a computer.

Well-paying jobs

Jennifer Wilkerson, director of marketing, public relations and the Build Your Future program at NCCER (a site for parents), says one of the biggest benefits of construction work — that jobs pay well — is also one of the major misconceptions about the industry.

In NCCER’s survey of parents, 40% considered construction jobs to be low-paying, Wilkerson says. But they actually offer high earning potential and room for advancement.

See: Here’s how this 22-year-old has no debt, her own home, and lots of travel

Average salaries (not including overtime, per diem or other incentives), are more than $59,600 for plumbers, $62,400 for HVAC technicians and up to $92,500 for project managers, according to NCCER’s 2018 construction craft salary survey.

Construction career pay enables young people to take on more financial responsibility, Wilkerson says. And when children are financially stable, parents benefit, too.

A Merrill Lynch/Age Wave study found that parents are spending $500 billion annually to financially support their adult children. And 63% are putting their own financial security aside for their kids, the survey said.

“I think parents need to know your kids have a lot of options in construction,” Wilkerson says. Besides learning a broad skill set, they might be able to work their way up to lead a company or start their own business.

To help parents better understand what a trades career can offer, NCCER launched the Build Your Future site, with details.

Paths to construction careers

There are multiple paths to a career in the trades for young adults, Turmail notes.

The most common is taking classes at a two-year college or private training facility after high school and then getting a job with a construction firm. A four-year degree is required for management roles in the industry, like a project manager, engineer or other “khakis and steel-toed boots construction job,” Turmail says.

Related: 9 students who built a career without the classic college experience—or debt

Another option: participating in career and technical education programs while in high school and then getting hired by a construction company.

Many construction firms offer open-shop apprenticeship programs, which pay workers while they learn, and then hire them. These programs also provide in-house training programs for newcomers.

Union apprenticeships are a viable option in some parts of the country, Turmail says, although only about 13% of the construction workforce is unionized these days.

Also read: When your adult children keep asking for money, here’s what to do

With a union apprenticeship, a high school grad signs up with a local labor union for a specific craft, like carpentry or electrical, gets paid to learn while working in that field and then finds a full-time job through the union.

Because the industry is “so eager to find folks,” Turmail says, many construction companies now will reimburse the cost of training.

Construction work: happy work

Construction jobs can be psychically fulfilling, too, for young people.

Construction workers were listed as the happiest employees in a 2015 report by TINYpulse.

“It’s economics and satisfaction,” Turmail says. “You want your children to get out of the house and be successful and independent once they’re grown up.” A career in construction might punch those tickets.

Erica Sweeney is a freelance journalist who has written for the New York Times, HuffPost, Teen Vogue, and more. Follow her on Twitter @ericapsweeney and visit her website.

This article is reprinted by permission from, © 2019 Twin Cities Public Television, Inc. All rights reserved.

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This article is reprinted by permission from NerdWallet.

In addition to being made out of titanium and arriving in laptop-like packaging, the new Apple Card stands out for letting cardholders earn immediate rewards, dubbed “Daily Cash.”

Unlike many other credit cards, where rewards typically post after one or two billing cycles, the Apple

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Card lets you see and access your accumulating rewards daily via your iPhone.

While it sounds convenient, that immediate gratification also comes with a downside: It could lead you to spend more, according to behavioral economists.

“It can be very easy to go overboard [with rewards],” says Lisa Kramer, a finance professor specializing in behavioral economics at the University of Toronto. Of the Apple Card rewards and their immediacy, she says: “It’s so much more salient and easy to respond in a way that’s impulsive, but that may not be in your best financial interest.”

The lure and the science of instant gratification

Ted Mann, chief executive of Slyce — a tech startup focused on visual search and image recognition — certainly noticed the immediacy when he started using the Apple Card shortly after it came out.

“I started to see the cash show up in the Wallet — every day, you get a buck or two. That’s definitely gotten me to want to use Apple Pay more for just about anything,” he says.

Apple Pay is the mobile payment system on your iPhone, and indeed the Apple Card incentivizes the use of that payment system, offering 2% to 3% back on purchases made via Apple Pay. (There’s a physical version of the card, too, but it earns only 1% back.)

Related: Here’s everything Apple isn’t telling you about its new credit card

While Mann says he isn’t necessarily spending more because of the Daily Cash accumulations, he is using Apple Pay more to get those elevated rewards.

Mann’s other credit cards also earn rewards, he says, but “I never see the rewards. My wife redeems them a couple times a year to book a family vacation, but otherwise, I’m never aware of them, so the Apple Cash ones seem far more effective,” he says.

Seeing rewards accumulate daily on your phone makes them more visible compared with seeing them on a monthly statement, says David Gal, professor of marketing at the University of Illinois at Chicago.

“People like the immediate feeling of reward,” he notes.

You might like: The best credit cards for beginners

But Gal cautions that such a feature can potentially lead to more spending than you initially intended. And this can be problematic given that credit card rewards in general are relatively small compared with the spending required to earn them.

For example, in the case of the Apple Card’s highest rewards tier, you’d have to spend $1,000 just to earn $30 back in rewards. The card’s ongoing APR is variable but can range as high as 20% or more. So if you’re routinely blowing your budget just to see your rewards tick higher and you’re unable to pay your balance in full each month, it can cost you more in interest than you’re collecting in rewards.

Guarding against overspending

If you’re not currently setting budgets ahead of your shopping trips, it’s a good habit to develop.

“If we operate in a world where we don’t set budgetary limits, then it’s easy to spend more than we intend,” Kramer says. “But if we’re explicit in advance about what those spending limits are, it can be helpful,” she says.

Worth reading: Apple and Goldman Sachs don’t report Apple Card information to credit bureaus

For those who have trouble sticking with those budgets? Signing up for spending alerts or notifications when you reach a certain limit can also temper spending, she adds.

But prevention can start even earlier. Kramer suggests self-awareness as a first defense. Understanding how your brain is responding to rewards can help you step back and make a different, more informed choice. With the Apple Card, for instance, you could choose to ignore the accumulating Daily Cash and check in just once a month, as you might with a typical rewards card.

Ultimately, if you know the allure of such instant rewards will tempt you to overspend, you may want to turn off your phone when you enter a store — or leave it behind entirely — and stick with cash or a debit card.

More from NerdWallet:

Kimberly Palmer is a writer at NerdWallet. Email: Twitter: @kimberlypalmer.

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The 2020 Acura NSX might be the most affordable and reliable exotic sports car on the planet. Designed to chase down pricier supercars like the Lamborghini Huracan, the Ferrari 488 and the Ford GT

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 , the NSX combines brilliant styling with an advanced suspension that delivers tenacious cornering abilities. Hand-built in the U.S. by a team of master technicians, the NSX is remarkably affordable considering the company it runs with.

The NSX’s hybrid powertrain is one of the most advanced powertrains ever assembled. Its turbocharged V6 engine is assisted by three electric motors: one placed between the engine and transmission and the other two powering the front wheels. The hybrid powertrain produces a remarkable 573 horsepower and 476 lb-ft of torque. A 9-speed dual-clutch automatic handles the power, aided by an electric Direct Drive Motor sandwiched between the engine and transmission that powers the NSX’s lightning-quick acceleration.


You could be quite happy in your daily commute in the NSX.

Capable of sprinting to 60 mph in just three seconds and reaching a top speed of 191 mph, the all-wheel-drive NSX easily plays in the same league as the Audi R8 V10 and the Chevrolet Corvette Stingray, not to mention the McLaren 570S and the Porsche 911 Turbo.

What’s new for 2020?

There’s a new paint color, Indy Yellow, that pays homage to the original NSX’s popular Spa Yellow paint, which was offered between 1997 to 2003. See the 2020 Acura NSX models for sale near you

What we like
  • Exotic looks
  • An intelligently designed cabin
  • Impressive acceleration and handling abilities
  • The price
What we don’t
  • The snug cockpit
  • No advanced driver-assistance systems
  • No volume knob on the radio
How much?

$159,495 to $200,000

Fuel economy

Fuel economy for the NSX is rated at 21 miles per gallon in the city and 22 mpg on the highway — not bad considering the performance behind this wild ride.

Standard features and options

The 2020 Acura NSX comes in only one trim, but it can be augmented with myriad performance and styling enhancements.

The Acura NSX ($159,495) includes an adaptive damper suspension, Brembo brakes, forged aluminum Y-spoke wheels (19-in front wheels, 20-in rear wheels), corner and backup sensors, flush-mounted power pop-out door handles, remote keyless entry, variable wipers, LED taillights, Jewel Eye LED headlights, body-colored heated power side mirrors with automatic reverse tilt-down, automatic dual-zone climate control, push-button start, a tilt-and-telescopic steering wheel, cruise control, 4-way power adjustable Alcantara-and-leather heated sport seats with 4-way lumbar control, a 9-speaker ELS Studio audio system, a 7-in display audio touchscreen with navigation, Siri Eyes Free, Apple

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  CarPlay, Android Auto, a TFT digital instrument cluster and Active Sound Control.

Options for the NSX include full leather seating, carbon fiber add-ons for the interior, roof and rear spoiler and a range of exterior paint choices. Buyers can cut the car’s weight by ordering manual seats, and there are a number of wheel options, too. For an additional $10,000, buyers can order a carbon-ceramic brake upgrade, while $6,000 gets you one of two Andaro paint colors: Velencia Red Pearl or Nouvelle Blue. Upgrading to the interior and exterior Gloss Carbon Fiber Sport packages will run you $12,600.


Although the NSX lacks modern driver-assistance features such as adaptive cruise control, autonomous emergency braking and semi-autonomous driving, it still comes with a full roster of safety features, including electronic traction and stability control, front- and side-impact airbags, a driver’s-knee airbag, a rearview monitor and a tire pressure monitor.

Looking for a modern muscle car? Here are 6 under $45,000

Neither the U.S. National Highway Traffic Safety Administration nor the independent Insurance Institute for Highway Safety crash-tested the NSX.

Behind the wheel

As would one expect of any supercar, the NSX is as thrilling in motion as it is standing still. Clambering into the low-slung cockpit isn’t as easy as gliding into an SUV, but once you’re in, it’s all systems go. The seats are snug but not too restrictive, and the controls are logically arranged and easy to operate. The headroom is far from generous, and taller drivers might find the legroom a bit on the snug side.


The seats are snug but not too restrictive.

A quick push of a button is all it takes to bring the NSX’s twin-turbocharged V6 to life. Pressing the push-button gear selector sets everything in motion with varying degrees of urgency, depending upon the position of the Integrated Dynamics System. Using a large rotary knob just above the gear selector, the driver can choose from four modes: Quiet, Sport, Sport+ and Track. Each setting is fairly self-explanatory, but our favorite is Sport+, which delivers just the right balance of performance and comfort required for spirited drives. The active torque vectoring system, when combined with the Super Handling All-Wheel Drive and grippy Continental tires, makes the NSX feel as though it’s riding on rails. A quick punch of the accelerator launches the car to 60 mph in a mere three seconds, and it continues without lagging right up to its 191 mph limit. That kind of power can only come from the instantaneous torque provided by the electric motors, and it’s intoxicating.

Read: 2019 BMW Z4 review: the Roadster returns

You might expect the normal hybrid system’s regenerative braking to sap some of the joy out of the NSX, but such worries are unfounded. We found the NSX to be one of the more enjoyable high-performance cars — not because of the brilliant way it attacks curves and makes even the most nefarious test track seem like child’s play, but because it’s so darn civilized when driving around town. You could have the NSX as your only car and be quite happy with your daily commute. You could even fit a set of golf clubs in the rear cargo bay, just behind the engine.

Is the NSX the world’s best supercar? No, but it does rank up there with the most elite, including the McLaren 570S, the Audi R8 V10 and the Porsche 911 Turbo, which all fall in the NSX’s price range.

Other cars to consider

2020 Chevrolet Corvette Stingray — The all-new 2020 Corvette Stingray is a stunning midengine performer with a torque-happy V8. At 495 hp, the Corvette isn’t as powerful as the NSX, but it can still bolt to 60 mph in three seconds, and its $60,000 starting price is less than half the price tag of the NSX.

2020 Audi R8 V10 — The Audi R8 V10 shares many of its components with the Lamborghini Huracan. It’s a refined machine with more horsepower than the NSX, but its performance times are similar. The R8’s cockpit feels more refined and high-tech, but its fuel economy isn’t nearly as good.

2020 Porsche 911 Turbo — The 911 Turbo holds more clout than the NSX, and it also makes for a very livable daily driver. Its performance is a bit more visceral, too, with a faster 0-to-60 mph time, a more polished interior and more personalization options.

Used Lamborghini Huracan — While it might not be easy to find, a used Lamborghini Huracan will provide brilliant performance and turn heads wherever it goes.

Also see: 2020 Toyota Supra review: Finally, it’s back

Autotrader’s advice

We like the NSX’s $160,000 entry price and wouldn’t push it up too much by adding on things like the carbon fiber bits and upgraded interiors, which don’t enhance performance. Toss in the carbon-ceramic brake package and the manual seat adjusters and call it a day.

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A file photo of a Barclays ATM machines in London last May.

Simon Dawson | Bloomberg | Getty Images

Companies around the world need to focus on the economics of supply chains amid uncertainties such as the U.S.China trade dispute and Brexit — the U.K.’s exit from the trade bloc, said the CEO of Barclays bank.

“Whether it’s Brexit or whether it’s the trade challenge between the U.S. and China, the real issue is supply chain,” Jes Staley told CNBC at the Barclays Asia Forum.

Companies are grappling with the fallout of both events as it impacts the cost of shipping physical goods and service delivery.

“As we globalize the world’s economy, supply chains are (the) mathematics of becoming a critical part of utilizing the most efficient assets irrespective of what country they are in,” said Staley.

“For sure, the exchange between China and the U.S., I think, has thrown a question into the sustainability or stability of supply chains in the future and strategically, all companies need to be taking a look at how should they manage their supply chains,” Staley added.

The British bank said in the aftermath of the Brexit referendum that it would expand its Irish subsidiary to continue its European trade.

“We are not going to reverse that,” said Staley. “The re-evaluation of supply chain economics is something that’s going to last for quite a period of time.”

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