Personal Finance

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Your take on food prices right now probably depends on which receipt you’re looking at. For the fourth month in a row, average grocery prices didn’t rise, according to the latest consumer price index. But dining out keeps getting more expensive.

Overall, food prices — which includes both food at home (groceries) and restaurant purchases — ticked up slightly from April to May, according to the CPI report released June 12 from the Bureau of Labor Statistics. The CPI, which serves as a proxy for inflation, measures changes in average costs of items in a given period.

The report shows food prices are 2.1% higher than they were 12 months ago. By comparison, prices rose 6.7% over the previous one-year period in 2023. While inflation isn’t rising as fast as it once was, food still feels expensive. In fact, food prices have risen 26% since the start of 2020.

Here are the broad strokes on food prices found in the latest report:

Groceries: The index for food at home is 1% higher year-over-year. From April to May, grocery costs were unchanged.

Dining out: Restaurant patrons are still paying more (4%) for food than they did a year ago. And the price index rose 0.4% from April to May. Specifically:

  • Limited service meals (takeout only) cost 4.5% more compared to the same time last year.

  • Full-service meals (at sit-down restaurants) cost 3.5% more year-over-year.

How inflation is hitting your grocery bill

Grocery prices continue to be a bright spot in the CPI. On the whole, they haven’t changed for three out of the past four months. In April, they declined slightly. That’s having a direct impact on people’s wallets: In May, several major retailers like Target and Walgreens touted summer discounts on pantry staples, seasonal favorites and other items.

But grocery prices don’t move uniformly. While they might be falling in one category or food group, they’re likely rising in another. This month was no different.

In May, average prices rose for soups, pork, snacks, poultry, fresh fruits, frozen and freeze-dried prepared foods and cereals and bakery products. They fell for milk, baby food and formula, cheese, fish and eggs, among others.

Egg prices have experienced huge swings since 2022, due to an avian flu. In May, the egg index declined 0.4%. That’s after dropping 7.3% the month before. But egg prices are still 3% higher than they were a year ago.

The latest CPI release shows beef prices were 5.7% higher in May than they were a year earlier — the largest annual increase among the grocery categories analyzed by NerdWallet. This despite falling 0.3% from April to May.

Source: nerdwallet.com

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I’m now 30 months into my new career, and I’m loving every single day.

As a lifelong learner, I find the nuanced topics of financial planning and investment management to be a limitless sandbox, or perhaps more like an underground cave system. Where’s the bottom?! Nobody knows!

Despite that complexity, my colleagues and I help clients with many common issues that are not the strict domain of experts. These are topics you don’t need CFPs, CPAs, or attorneys to help you with. And that fact – that even experts focus on getting the basics correct – is an important lesson.

Let’s dive into some examples.

Cash Flow Management

Cash flow management is the single biggest financial fundamental that most people overlook. I see examples of this daily, both good and bad.

I’ve seen people earning $600,000 and spending $625,000 yearly. They’re drowning (though usually unaware of it).

I’ve seen people earn $300,000 and spend $200,000, or earn $120,000 and spend $80,000. They are thriving. If you’re saving 20%+, you’re killing it. Great work.

Yes, it is so simple: Spend less than you earn and, ideally, measure it. Despite its simplicity, this idea is the foundation upon which the rest of our finances are built. Cash flow management is a vital part of every financial planning conversation.

Portfolio Complexity

Prospective clients or new clients typically prioritize portfolio reconstruction. I get to see the peculiar, the zany, the intriguing…somebody call P.T. Barnum!

The most common theme, though, is that many outside portfolios have come to me far more complex than they needed to be.

The most frequent complexity is to see 4 or 8 or 15 mutual funds in a single portfolio that are performing the same exact role. Who needs 15 mutual funds that are all 60% stocks, 40% bonds, and actively managed? The answer, of course, is nobody. But why, then? Why do investors get in this situation in the first place?

The reason is what I call “flavor of the month.”

With about 97% accuracy, I can tell these portfolios were built by a financial advisor who was financially incentivized to buy specific funds for their clients. The “mothership” will tell such advisors, “Our NBNHX mutual fund is undercapitalized. If you put your clients in NBNHX this quarter, we’ll double your commission on it.”

That’s a flavor of the month. Not for the client, mind you. But for the advisor. It’s a conflict of interest, for sure, but not all advisors are required to act as fiduciaries. We call on Uncle Charlie to remind us, “Show me the incentives, I’ll show you the outcomes.” Next thing you know, NBBHX has entered the portfolio.

The portfolio fills up with these various flavors of the month until – voila! – you have a Baskin Robbins. But despite the “flavors” having different ticker symbols, they all taste the same. Imagine if Baskin Robbins sold 31 flavors of vanilla! That’s what these portfolios look like. “Could I get a scoop of vanilla, a scoop of French Vanilla, and one of Vanilla Bean? Sprinkles? Never…”

Instead, we should make specific investment choices to answer specific portfolio problems—in layman’s terms, put the “right tools for the jobs” into your portfolio.

Each “job” might require its own specialty “tool.” We each have many tools in our garages and toolboxes. There’s nothing wrong with having multiple funds in a portfolio. But you don’t want or need redundant assets, just like a homeowner doesn’t need nine shovels. 

You should be able to point to each fund or asset in your portfolio and describe the unique reason it’s there or the specific portfolio problem the asset is solving.

It’s hard to find a picture that combines “ice cream” and “tools,” so I asked A.I. to help me out. I’ve seen plenty of weird A.I. images at this point, but it’s still disorienting to see such real-looking objects (that ice cream isn’t real?!) juxtaposed with a computer’s misguided interpretations (what kind of dental torture device is that in the lower right? and why do the screwdrivers all have wooden popsicle sticks?).

Too Much Cash 

Nobody should complain about 5% risk-free rates. However, cash is not a long-term investing strategy. Risk-free rates cannot, and should not, outperform inflation over the long run. You need to take some risk.

While cash is an important buffer to ensure short-term liquidity and an emergency fund safety net, your long-term assets should be in a risk-bearing, higher-growth asset class.

Stocks and bonds are wonderful.

Further reading: How Much Time Does It Take for Stocks to Outperform Bonds?

Goal Setting

Whether you realize it or not, your financial plan has specific branches and pitstops and end-points. My financial plan does too. But mine are much different than yours.

The reason is because each of those branches and pitstops and end-points are related to specific goals. My goals for my plan, your goals for your plan.

You don’t need a professional’s intervention to ask yourself, “What are our financial goals? What do we want life to look like, and by when, and how much might that particular life cost us?”

Consolidation

A common financial stress I hear rhymes with, “We have money all over the place. Too many accounts, too many statements, we need help!”

There’s not always a financial impact from consolidation (though sometimes it will save you annual or monthly account charges). But a significant mental burden lifts when you go from 24 disparate accounts down to 5.

Scary Stuff 

People out there have scary stuff in their financial lives. The more stones I overturn, the more interesting scenarios I find. Some examples include: 

  • Keeping large amounts of credit card debt to “improve our credit scores.” Credit scores don’t work that way.
  • Saving large sums ($25,000+ per year) while carrying huge credit card debt ($50,000+). Bad priorities. No investment is going to outperform paying down a 25% debt.
  • Tapping into a 401(k) prematurely (though quite intentionally) without awareness of the extremely stiff penalty. There’s a 10% early withdrawal penalty plus your marginal Federal tax rate (22% to 37% for most of you) plus your marginal state tax rate (6-8% here in NY). For hire earners, it sums to north of 50%. That $50,000 withdrawal? You keep $24,000 of it. The rest goes to the IRS.
  • Unrealistic spending plans. Both irrationally optimistic and irrationally pessimistic. Two families each want to spend $100,000 a year throughout their retirement. The first family has a $500,000 nest egg, which works out to a 20% withdrawal rate. The 4% rule is squealing. The second family has $15 million, or a 0.67% withdrawal rate. They are crippled with anxiety over running out of money. Neither family is living in reality.
  • No communication. Family finances are a deeply personal topic. There are many ways to skin the cat. But there aren’t infinite ways to skin a cat. Some methods are plain stupid. It shouldn’t take a meeting with a CFP for one spouse to tell the other spouse they still have $120,000 of student loans. Communication, communication, communication.

Ok, you spelunkers. It’s fun to dive deep into the financial planning cave, where the Social Security salamanders and the Roth conversion crayfish lurk. But the professionals care deeply about the “surface-level” stuff too, and it’s perhaps more important to get those simple ideas right.

Thank you for reading! If you enjoyed this article, join 8000+ subscribers who read my 2-minute weekly email, where I send you links to the smartest financial content I find online every week.

-Jesse

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Source: bestinterest.blog

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Aldi stores are simple by design — there are no add-ons like pharmacies or check cashing, and the layout is small, to help expedite grocery shopping.

But a no-frills shopping experience doesn’t mean skimping on premium offerings — the food products in Aldi’s exclusive brand are free of certified synthetic colors and added trans fats. And Aldi’s weekly finds section features deals on premium items like seasonal apparel, outdoor furniture and home goods.

The affordable prices at Aldi make it so that you can stock up a lot of groceries, without sticker shock. “It’s a store that takes away guilt,” says Jenny Martin, the writer behind the coupon website SouthernSavers.com. “People know that if they shop there, they don’t feel like they’ve splurged.”

Before you go to Aldi, make sure you have a quarter handy; you’ll need it to unlock a shopping cart, which has a coin slot and key. Don’t forget your reusable bags, and this list of the best Aldi finds to use as a guide.

Before you build a budget

NerdWallet breaks down your spending and shows you ways to save.

Charcuterie board ingredients

Aldi is a great place to source affordable ingredients if you’re putting together a charcuterie board, according to Ashley Williams, founder of the site Oh Hey Finds, where she shares her favorite finds from Aldi, Walmart and Sam’s Club.

“Their range of cheeses, crackers, meats, jams and nuts are fantastic,” she said in an email.

For example, at the time of this writing, we found the charcuterie staple Brie cheese (8 ounces) online at Aldi for $4.19. Cheese of the same type and size was $4.87 at Walmart and $8.99 at Safeway.

Basic food staples

If you aren’t tied to a particular brand for your food staples, then Martin recommends getting them at Aldi.

“It is a great place to go for the basics, like milk, eggs and dairy products,” she says. “They know that milk and egg prices can make people loyal.”

Frozen foods

Martin recommends stocking up on some of Aldi’s frozen items like vegetables, breaded chicken and quick-cook meats. For example, at the time of this writing, we spotted frozen chicken wings (64 ounces) online at Aldi for $13.19 compared to a smaller pack (40 ounces) from a different brand online at Safeway for $13.99.

You can also find a variety of frozen seafood and several meatless options if your diet is plant-based or you’re planning the menu for Meatless Monday.

Produce

Online reviews of the quality of Aldi’s produce are mixed. If you’re going to buy fruits and vegetables from Aldi, it’s probably best if you plan to eat them quickly or preserve them. Martin notes that the produce is a good price, but doesn’t stay fresh as long as when she buys produce from other grocery stores.

Some produce items, such as onions, lemons and peppers, which may be sold individually at other grocery stores, come packaged in larger quantities at Aldi. Stocking up on your produce essentials could save you money in the long run, and freezing your fruits and vegetables can help extend their life and cut down on waste.

International foods

Williams appreciates Aldi’s food and snack items that are inspired by different cultures. “Aldi does a great job of releasing culturally diverse finds throughout the year — for example, German week and Asian week boast a wide selection of foreign tasting finds,” she said. Williams particularly likes the Deutsche Kuche Bavarian soft pretzel sticks from the freezer section.

How to maximize the benefits of shopping at Aldi

To get the most value, Martin suggests shopping at Aldi for the basics and shopping elsewhere for more nuanced needs. Aldi doesn’t carry as many name brands as other grocery stores, so you have to be OK with opting for Aldi-brand products.

And if you want to be sure to score Aldi’s best finds, do your weekly shopping on the day Aldi releases its new products. “The best day of the week to shop is typically Wednesdays, because that is when they release all of their new products,” Martin says. And on Sundays, Aldi offers deals on some of their most popular products.

While shopping at Aldi may take some getting used to if you’ve never been before, once you start, you’re bound to find some unique and affordable favorites.

Get more financial clarity with NerdWallet

Monitor your credit, track your spending and see all of your finances together in a single place.

Source: nerdwallet.com

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Debt settlement can be a lifeline for individuals struggling with overwhelming debt, offering the possibility of reducing their debt burden and achieving financial freedom. However, it’s essential to understand the ins and outs of debt settlement to make informed decisions about whether it’s the right option for you. 

In this comprehensive guide, we’ll cover everything consumers should know about debt settlement, including when it’s a good idea, when it isn’t, how to initiate the process, and more.

Understanding Debt Settlement

Debt settlement is a debt relief strategy in which a debtor negotiates with creditors or debt collectors to settle their debts for less than the full amount owed. Instead of repaying the entire debt, the debtor agrees to make a lump-sum payment or series of payments to satisfy the debt, typically at a reduced amount.

When Debt Settlement Is a Good Idea

Debt settlement may be a viable option for individuals facing significant financial hardship and unable to repay their debts in full. Here are some situations in which debt settlement may be a good idea:

  1. Overwhelming Debt: If you have substantial unsecured debt, such as credit card debt or medical bills, that you’re unable to repay through traditional means, debt settlement may offer a way to resolve your debts and avoid bankruptcy.
  2. Financial Hardship: If you’ve experienced a significant loss of income, medical emergency, or other financial hardship that has made it impossible to keep up with your debt payments, debt settlement can provide relief by reducing your overall debt burden.
  3. Avoiding Bankruptcy: For individuals who want to avoid filing for bankruptcy but are unable to repay their debts in full, debt settlement offers an alternative solution that may allow them to negotiate more favorable repayment terms with creditors.

When Debt Settlement Isn’t a Good Idea

While debt settlement can offer relief for some consumers, it’s not the right solution for everyone. Here are some situations in which debt settlement may not be a good idea:

  1. Limited Financial Resources: Debt settlement requires a lump-sum payment or series of payments to settle your debts, which may be challenging if you have limited financial resources or are unable to save money for settlements.
  2. Negative Impact on Credit Score: Debt settlement can have a negative impact on your credit score, as settled accounts may be reported as “settled for less than the full amount” on your credit report, which can lower your credit score and make it harder to qualify for credit in the future.
  3. Potential Tax Consequences: Depending on the amount of debt forgiven through settlement, you may be required to pay income tax on the forgiven amount, which can result in a significant tax liability.

Initiating the Debt Settlement Process

If you’re considering debt settlement as an option, here are the steps to initiate the process:

Step One: Assess Your Financial Situation

Start by assessing your financial situation, including your total debt load, monthly income, and expenses. Determine how much you can realistically afford to offer as a settlement to your creditors.

Step 2: Contact Your Creditors

Reach out to your creditors or debt collectors to inform them of your intention to settle your debts. Be prepared to negotiate with them to reach a mutually acceptable settlement amount.

Step 3: Get Everything in Writing

Once you’ve reached a settlement agreement with your creditors, make sure to get all the terms of the agreement in writing, including the agreed-upon settlement amount, payment schedule, and confirmation that the debt will be considered satisfied.

Step 4: Make Payments

Fulfill your end of the settlement agreement by making the agreed-upon payments to your creditors. Be sure to follow the payment schedule outlined in the agreement to avoid any potential complications.

Step 5: Monitor Your Credit Report

After completing the settlement process, monitor your credit report to ensure that the settled accounts are accurately reported. If there are any discrepancies, dispute them with the credit bureaus to have them corrected.

Seeking Professional Help

Navigating the debt settlement process can be complex, so it may be beneficial to seek professional assistance from reputable debt settlement companies or credit counseling agencies. These organizations can help you negotiate with creditors, develop a customized debt settlement plan, and provide guidance on managing your finances more effectively.

Debt settlement can offer a lifeline for individuals drowning in overwhelming debt, providing a path to financial freedom and relief from creditor harassment. However, it’s essential to carefully consider whether debt settlement is the right option for your financial situation and to understand the potential risks and consequences involved. By following the steps outlined in this guide and seeking professional guidance when needed, you can navigate the debt settlement process with confidence and take control of your financial future.

Source: credit.com

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It’s hard to believe Amazon.com started back in July 1995 as an online retailer that sold books only. Almost 30 years later, it’s likely the first place you look when you get the idea to buy anything.

Retailers like Walmart, Best Buy and Target can be quite competitive with Amazon. Still, with the number of Amazon Prime members in the U.S. at 180 million, according to an estimate by Consumer Intelligence Research Partners in March, dependence on Amazon runs deep. If you shop there, lead with needs over wants to save money where it counts. Here’s a short list of the best things to buy (and a couple to skip) on Amazon.

Before you build a budget

NerdWallet breaks down your spending and shows you ways to save.

Buy: Personal care items you can put on autopilot

Product purchases new parents can knock out at Amazon include baby wipes and diapers. Items like these are competitively priced on Amazon, especially when using “Subscribe & Save,” said Kallie Branciforte, a blogger and YouTuber in Connecticut, in an email.

“I am always surprised by how many people don’t take advantage of ‘Subscribe & Save,’” she said. “It’s the easiest way to save on the stuff you use all the time.”

When you subscribe to a product, you can set a schedule that aligns with when you’ll run out. Branciforte, who reaches millions of viewers with her “That Practical Mom” YouTube channel, lets Amazon replenish vitamins, diaper cream, her kids’ body wash and more to make life easier, and often cheaper.

Try subscribing to unique essentials, like nasal strips that let you breathe freely at night, or electric toothbrush heads to make healthy living habitual. Buying items like these on Amazon is more about selection and convenience than price.

As an incentive, Amazon offers up to 15% off when you receive five or more eligible products in one automatic delivery to the same address. “It’s such a simple way to save on things you’re already buying, completely on autopilot,” said Branciforte.

Buy: Pet food and litter

Putting pet food on auto-order is another convenience play for Prime members. Nobody likes scanning 25 tiny cans of Fancy Feast at the grocery store self-checkout lane. You can save the hassle and try to beat the per-can price by ordering the 30-pack on Amazon.

You can save your back by getting big bags of dog food or a 38-pound box of cat litter delivered.

Skip: Clothes you want to fit well and feel comfortable

Clothing can be hard to get right on Amazon, says Trae Bodge, the shopping expert at truetrae.com.

Bodge bought a dress on Amazon last year and loves the look, but says it’s scratchy inside. She prefers a store like Target for affordable pieces she can feel first.

When it comes to jeans and sneakers, you might be able to do better by buying from the source. Joining the Levi’s rewards program, for example, gets you free shipping and returns on Levi.com. “What you’ll find is that the style selection is broader, the size selection is broader,” says Bodge.

Nike is another brand that incentivizes customers to shop on its site. Members get free shipping on orders $50 or more, and shoes and apparel at Nike.com regularly go on sale.

Buy: Batteries, cables and phone cases

Back to the essentials, the Amazon Basics brand of batteries is an exceptional deal. At $12.52 for an 8-pack of 9-volt batteries (at the time of writing), you can add it and a pack of AA and AAAs to your cart the next time you checkout. Compare that with the 8-pack of Duracell 9-volt batteries we spotted at the Home Depot for $29.05.

Make Amazon your first stop after you buy a new or used iPhone or Android too. Apple’s $49 silicone case is highway robbery when you compare it with cases on Amazon that look, feel and protect the same for under $15. Amazon is also the place for power adapters, cables and wireless charging pads at prices that are cheaper than at Apple.

Buy: Amazon bestsellers

A helpful hack Branciforte shares in one of her YouTube videos is to use Amazon’s “Best Sellers” lists to narrow down searches.

It’s a little out of the way, but you get there by navigating to the top left of the desktop site and clicking the three bars to open the menu. Select “Best Sellers,” and from there, you can dive down by department to find popular buys in specific product categories.

Let’s say, for example, you’re looking for a shower head with better water pressure than the one you have. Rather than roll the dice on something from Home Depot or Lowe’s, you can look up bestsellers in the bath section on Amazon. Scroll down to the first or second one, likely the AquaCare HighPressure 8-mode handheld shower head for around $25, then buy it. This paragraph isn’t sponsored, but this Nerdy writer can attest to the power of this particular model.

Skip: Large furniture pieces that can be painful to return

Bodge avoids buying larger items at Amazon that you have to assemble. The perceived burden of sending it back could compel you to keep something you don’t want. And even if you do like it, the cardboard and other packing material that comes with a coffee table can be a royal pain in the trash.

Now that it’s normal to frequent stores again, it can save you time and strife to pick something out and buy it in person. You can also save by buying used. Thrift stores, antique shops and Facebook Marketplace are great places to score cheap furniture pieces from yesteryear that are still in style (and probably better made).

Advice: Read reviews and check price history before buying

Whatever you buy from Amazon, it’s important to read the reviews and it’s better when there are plenty of them, said Branciforte. She tends to be leery of items with few ratings unless the category is very niche.

“I’d rather buy something with 4.3 stars and 1,000+ reviews than 4.8 stars and 15 reviews because I know the first has been on the site longer, making it more trustworthy and valid,” she said.

Given that other retailers are working hard to outprice Amazon, Bodge says it pays to check the price history and look around before buying. Shopping browser extensions like PayPal Honey and the Camelizer make light work of making sure you aren’t overpaying. And it’s easy to do a quick Google search for any product.

With Prime Day in July, better deals could be on the horizon. “I think it can be worthwhile to wait,” said Branciforte.

You can still shop, though. Just put it in your cart and select “save for later.”

Get more financial clarity with NerdWallet

Monitor your credit, track your spending and see all of your finances together in a single place.

Source: nerdwallet.com

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If you’re not a farmer, you might not think you need to care about the Farm Bill. But if you purchase or consume any food you haven’t grown yourself, you probably should.

The Farm Bill — the Agriculture Improvement Act — refers to a wide-ranging package of bills that must be addressed by Congress every five years. It covers mandatory and discretionary funding for a variety of agricultural and food programs, which are split into 12 sections, also known as titles. These titles are:

  1. Commodity: Support for commodity crops like corn, dairy, peanuts, rice, soybeans and sugar. It also includes disaster assistance.  

  2. Conservation: Programs to support land and natural resources conservation including including land retirement programs, easement programs, working land programs, etc.  

  3. Trade: Includes U.S. agricultural export programs and international food assistance. 

  4. Nutrition programs: SNAP and other nutrition assistance programs for low-income families such as school lunch programs. 

  5. Credit: Direct government loans and guarantees for farmers.

  6. Rural development: Provides grants, loans and guarantees to support multiple areas of rural economic growth such as business, housing and community facilities. 

  7. Research, extension and related matters: Supports agricultural-related education and research. 

  8. Forestry: Supports conservation programs through the USDA’s Forest Service. 

  9. Energy: Provides grants and loan guarantees for developing renewable energy systems.

  10. Horticulture: Supports production of specialty crops, USDA-certified organic foods, hemp, farmers markets and local food programs.

  11. Crop insurance: Authorizes the Federal Crop Insurance Program, which offers subsidized insurance policies to protect farmers against losses. 

  12. Miscellaneous: Advocacy and outreach programs; programs for beginning farmers as well as socially disadvantaged farms; and animal health programs. 

The title that receives the biggest portion of Farm Bill funding is nutrition — about 76% in the 2018 bill. Nutrition includes the Supplemental Nutrition Assistance Program (SNAP) — food benefits for low-income families once known as food stamps. As of January, 41 million Americans received SNAP benefits, according to the U.S. Department of Agriculture (USDA).

What’s next for the 2024 Farm Bill?

The most recent Farm Bill was passed by Congress in 2018 and expired on Sept. 30, 2023. In November it was extended until Sept. 30 of this year.

Even after buying itself an extra year, Congress has been slow to compile the 2024 Farm Bill, but lately made some progress. On May 1, House Republicans and Senate Democrats released broad outlines of their respective proposals and are now working through finalization.

(Photo by Scott Olson/Getty Images News via Getty Images)

Source: nerdwallet.com

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The events behemoth Live Nation Entertainment is about to rack up some fees of its own — legal fees, that is.

On Thursday, the Department of Justice announced it was suing Live Nation Entertainment on antitrust grounds. The suit arrives after long-standing allegations of monopolistic practices and multiple federal investigations. The DOJ’s action was largely expected following a report of the impending suit by the Wall Street Journal on April 15.

Live Nation Entertainment encompasses international event promotion and management, as well as ticket sales through its better-known division, Ticketmaster.

The antitrust suit, which was joined by 30 states, was filed in federal court in the Southern District of New York. During a press conference following the announcement, Attorney General Merrick Garland detailed some of the DOJ’s allegations against Live Nation Entertainment including:

  • Locking out competition through long-term and exclusive contracts with major venues encompassing more than 70% of event ticket sales. 

  • Imposing a “seemingly endless” bevy of fees, such as ticketing fees, service fees, convenience fees, platinum fees, handling fees and more.  

  • Pressuring artists into using its services to promote events at venues it has long-term contracts with. 

  • Working “strategically and illegally to eliminate the threat of potential rivals” in the event ticketing industry, in some cases even when the deal didn’t financially make sense for Live Nation’s business.  

“Some monopolies are just so entrenched and some problems so difficult to address that they require decisive and effective solutions,” said Assistant Attorney General Jonathan Kanter at the press conference. “We request a remedy that has been used in antitrust law going back over 100 years, which is structural relief.”

Prior to the lawsuit, in Live Nation Entertainment’s first quarterly earnings call of the year on May 3, President and CFO Joe Berchtold said, “Based on the issues we know about, we don’t believe a breakup of Live Nation and Ticketmaster would be a legally permissible remedy.”

The investigation started with Taylor Swift’s Eras Tour

The Justice Department’s suit is the result of an investigation launched in November 2022 following an incident in which Ticketmaster mishandled sales of tickets for Taylor Swift’s Eras Tour. A multitiered presale event for the tour prematurely oversold tickets, which meant hopeful fans couldn’t purchase them in the public sale. Then resellers who did manage to get presale tickets posted those for sale at exorbitant prices.

In the aftermath, fans of the pop star, also known as Swifties, filed a class-action lawsuit accusing the company of fraud, misrepresentation and anti-competitive practices.

The incident also prompted Congress to begin investigating the event ticketing company. In February 2023, legislators recommended that the DOJ’s Antitrust Division probe Live Nation Entertainment, as well.

Then in November 2023, the Senate Permanent Subcommittee on Investigations (PSI) issued a subpoena for documentation that it said Live Nation had yet to produce during the subcommittee’s investigation. The subcommittee also wrote a letter to the Justice Department that said the Eras Tour problems “suggest that the Department’s past enforcement efforts have failed to protect competition.” It went on to say that if Live Nation had indeed abused its power in the event ticketing market, then it may be prudent for the DOJ to break up Live Nation and Ticketmaster.

Live Nation Entertainment controls most of the event ticketing market

In 2010, the Justice Department approved the merger of the event promoter Live Nation and ticketing company Ticketmaster to become Live Nation Entertainment. At the time that the companies consolidated, each was already the dominant player in the events industry: Ticketmaster for ticketing and Live Nation for owning, operating and promoting venues.

Peter Cohan, a professor of practice in the management division at Babson College in Wellesley, Massachusetts, says the merger has been costly for consumers. Face-value tickets have increased sharply, but increasingly pricey fees have been tacked on, as well. They’re commonly called junk fees, and the Biden administration has made a mission of targeting them in the events ticketing space, as well as travel and credit cards.

In a 2009 analysis that Cohan wrote prior to the Live Nation merger entitled “Chokehold on Live Entertainment,” he looked at fees. Cohan says, “I came across a typical kind of concert ticket — Denver, Colorado, a Green Day concert in 2009 — where the fee was 45% of the face value of the ticket. And now fees are as high as 70% or 75%.”

In more than a decade since its merger, Live Nation Entertainment has only strengthened its hold on the market. During last year’s congressional investigation, the PSI submitted a letter to the Justice Department citing statistics that demonstrate Live Nation’s reach: 60% of the event ticketing market is controlled by the company. That includes 80 of the top 100 largest arenas in the U.S.

Live Nation Entertainment’s ownership of and deals with venues make it difficult for artists to use any other ticketing platform for its tours, says Cohan. “If an artist wants to use a different ticketing provider, then Live Nation will basically threaten to say, ‘Well, you can’t use this venue,’” he says.

This hasn’t gone unnoticed by the Justice Department: In 2019, the DOJ determined that Live Nation had violated the consent decree it agreed upon during the merger. The consent decree specified that Live Nation Entertainment cannot retaliate against concert venues for using other ticketing services. According to a Dec. 19, 2019, press release, the DOJ found “Live Nation repeatedly and over the course of several years” violated this agreement.

The consent decree between the companies was supposed to expire after 2019, but the DOJ extended the terms of the merger deal to 2025. In the extension, the Justice Department clarified that Live Nation Entertainment must not pressure venues to use Ticketmaster under the threat of forfeiting Live Nation shows.

Live Nation Entertainment says it’s not to blame for high prices

In response to scrutiny over high ticket prices, Live Nation Entertainment sought to explain more fully the rationale behind the costs. Dan Wall, Live Nation Entertainment’s executive vice president of corporate and regulatory affairs, wrote in a March 4, 2024, open letter entitled “The Truth About Ticket Prices” that high prices “have very little to do with Live Nation or Ticketmaster.” Instead, steep demand for high-profile concerts, like the Eras Tour, naturally leads to more expensive tickets. He went on to add that artists’ increasing dependence on touring income — mainly due to the prevalence of music streaming, which doesn’t pay out for most artists — is also a contributing factor.

Still, Wall wrote that artists tend to underprice tickets “mostly out of regard for their fans,” but the resale market shows artists what their tickets could cost, which, in turn, leads artists to charge more because “when they don’t charge those prices scalpers will find ways to acquire tickets and resell them at full market value.”

He wrote, “The common thread to all these factors is that they have nothing to do with who the promoter is or who sells tickets to the show.” It is the performer’s business team that works with promoters to come up with a strategy that provides revenue while “doing right by their fans.”

Cohan says the secondary market has further exacerbated already high prices for tickets — by several thousand percent markups. “If you go to buy a ticket and Ticketmaster says you can’t get it, that’s because 90% of tickets are reserved for secondary market players who immediately bid up the price,” says Cohan. “Then you have to buy it on the secondary market and pay much more for it.”

On the secondary market, Cohan says, Ticketmaster then collects more fees on transactions. However, Ticketmaster has, in the past, publicly denied that it enables a mass-scalping system.

Live Nation reported a record $22.7 billion in revenue in 2023.

This isn’t the DOJ’s first rodeo with Ticketmaster

Anticompetitive accusations have been thrown at Ticketmaster for decades. In the early 1990s, the grunge band Pearl Jam feuded with Ticketmaster over its service charges. A June 30, 1994, article in the Los Angeles Times said the band accused Ticketmaster of refusing to sell tickets to the band’s tour at the price point they wanted to ask of fans: $18 or less, with under $2 in service fees (at the time, Ticketmaster charged $4 to $8 per ticket in service fees). Later, Pearl Jam tried to work outside the Ticketmaster system on its own low-priced tour, but the company allegedly influenced promoters and venues to boycott the tour altogether.

The clashes between Ticketmaster and Pearl Jam prompted a situation similar to the current inquiry following the Eras Tour mess: The Department of Justice launched an investigation into anti-competitive practices while Congress called for hearings. Ultimately, Ticketmaster won out.

What’s next

Cohan is skeptical that a breakup of the merger will happen. He speculates that it’s more likely that Live Nation will stall litigation for as long as possible and likely conduct changes to remediate some of the complaints rather than wade through an entire breakup of the companies.

But if the DOJ does break up the merger, Cohan says, it’s possible prices might improve somewhat since there would be less of a financial incentive for Live Nation to only use Ticketmaster. But he asserts that unwinding the merger is unlikely to make much of an impact.

“The situation was pretty bad before they were merged and probably would be pretty bad afterwards unless there was a fundamental change to the way tickets are sold,” says Cohan, who suggests direct artist-to-consumer sales would likely be the next best option. He reasons that artists need a way to sell tickets, but with existing e-commerce technology, big ticketing systems aren’t really necessary.

“I’m sure many artists — even the smaller ones — could probably pull their money together and build a system that they could sell tickets on directly to consumers without having all these intermediaries taking a piece out of it where they’re not really adding any value,” he says. “It would probably still be expensive to go to a concert, but with the non value-added cost taken out, it would be lower.”

Source: nerdwallet.com

Apache is functioning normally

When you ask people how they’re doing, you often get a knee-jerk “fine” or “good” without much introspection. But lately, when you ask people about the economy, they have clear feelings.

Over the past several years, the economy has been remarkable, in a literal sense; there has been a lot to talk about. Inflation rose to levels we hadn’t seen in about 40 years, and home prices climbed roughly 50%. The Federal Reserve stepped in to fight inflation. Interest rates reached territory they hadn’t touched in 20 years or more, but they did so without triggering a recession. Economic growth has remained high and the labor market strong. All of these factors have resulted in a cacophony of narratives about the economy, which is very likely playing a role in people’s perceptions.

A new survey from NerdWallet, conducted online by The Harris Poll among more than 2,000 U.S. adults, reveals a disconnect that illustrates these perceptions well. When asked how they feel about a variety of economic and financial topics now compared with 12 months ago, Americans were nearly twice as likely to feel worse than better about the state of the U.S. economy in general. Yet they were slightly more likely to feel better than worse about the state of their own personal finances.

Over the past 12 months, the survey period we asked about, the economy has actually remained strong, and the post-pandemic recovery has carried on better than expected. Consumers continue spending, which is typically taken as a sign of confidence. It may be tempting to disregard negative sentiment if we can’t confirm it’s rooted in current economic reality. But that sentiment may provide clues to yet-unseen problems and potentially drive behavior changes that could have significant economic impact.

Half of Americans are feeling worse about the economy

People’s perceptions are colored by their background, personality traits and exposure to information, among many other things. And these perceptions don’t always reflect demonstrable reality, particularly when you ask about how people feel. Asking about perceptions and focusing on an emotional component can give people explicit permission to detach their experience from what the actual evidence might show. And often, it’s likely our feelings that govern our behaviors, whether we’re talking about managing relationships or spending money.

About half (49%) of Americans say they feel worse about the state of the U.S. economy in general now compared to 12 months ago, according to the NerdWallet survey conducted in April. Just 26% feel better. Among the questions asked, this one garnered the strongest opinions — it had the lowest rate of people who neither felt better nor worse.

Twelve months before this survey, the economic indicators most people would encounter in daily living were pretty close to where they are now. Unemployment was a low 3.4%; now, it’s still low by historical standards, at 3.9%. Gas prices were relatively the same: $3.71 per gallon on average then and $3.73 now. One major improvement over that one-year period can be found in price growth, however. Inflation in April 2023 was near 5%. Now, it’s closer to 3.5%. In fact, wages are now growing faster than prices.

When asked to look more locally — how they feel about the state of their personal finances now versus 12 months ago — one-third (33%) of Americans feel better and 29% feel worse. Parents of minor children are more likely (39%) than non-parents (31%) to feel better.

What’s driving the disconnect?

The disconnect between how people feel about the economy at large and how they feel about their household finances seems counterintuitive. By most official measures, the economy is strong. If feelings or perspectives run contrary to that, one source of the negative sentiment could be personal experience. In other words, if I feel bad about the economy when the economy is doing well, maybe it’s because my personal financial situation is not so great. But a modest segment of Americans hold these two seemingly disparate feelings simultaneously: 18% of those who feel worse about the economy now than they did 12 months ago say they feel better about their personal finances over the same period.

There are many other possible explanations for the perception of a worsening economy, including:

1. We could be measuring the economy wrong (maybe it’s not doing as well as we think). The COVID-19 pandemic didn’t just shake the economy, it shook economic data too. This explanation might not be the most likely, however, as the people responsible for economic data are experts in their field. If someone’s going to get it right, it’s likely them. Data collection, benchmarking and seasonal adjustments have all been impacted and continue to be accounted for.

2. Exposure to negative stories in the news or social media could be coloring people’s outlook on the economy’s health. The last high inflation period was a relative lifetime ago, in the 1980s. Then, our primary sources of economic information came at regularly scheduled and limited intervals: in the morning newspaper or in front of the evening newscast, for example. Now, economic data is everywhere you look, translated by both experts and social media influencers alike. This consistent attention to the economy’s measurements could be having an outsized impact on our perception of its well-being.

3. The housing market could be playing an outsized role in overall economic perspectives. If there’s one section of the economy that is undoubtedly difficult, it’s the housing market. Under current conditions — high home prices, a paltry number of homes available for sale and high borrowing costs — even if someone has taken steps to position themselves to buy, they’ll be met with difficulties. Healthy household finances can only get you so far if you’re trying to buy a home in this unfriendly market, and confronting these roadblocks on the path to a long-term financial goal can be very discouraging.

4. We’re aware that even though we might be doing better personally, others aren’t so fortunate. Aggregate measures of the economy conceal a lot of nuance. Unemployment is low on a national scale, but people are still unemployed. Wage growth is outpacing inflation, but not everyone is receiving raises. Even if you personally aren’t experiencing any downside to this economy, knowing that others are may color your views. This isn’t necessarily a bad thing — empathy across the economy can drive meaningful community involvement and policies that improve the well-being of others.

What we shouldn’t do is assume that people just don’t understand the economy and write off the disconnect as immaterial. At some point, how we feel about the economy can impact how we act. It can affect decisions such as whether now’s a good time to buy a new car, invest in the stock market or start a new business. For business owners, it can impact hiring and investment decisions. And all of these spending and saving decisions can ultimately impact the health of the economy, feeding into official data. Consumer expenditures account for about two-thirds of total GDP, for example. So how we feel about things, no matter the driving force, can impact economic reality. And that makes this sentiment worth listening to.

Source: nerdwallet.com