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The sociologist Alexandrea Ravenelle studies the decline of the one-job era, and the rise of the gig economy.
It’s not good news for workers, she says.

Alexandrea Ravenelle, author of “Side Hustle Safety Net.”
Courtesy: Alexandrea Ravenelle

Alexandrea Ravenelle studies the decline of the one-job era.
The sociologist chronicles the spread of the gig economy and the rise of “poly-working,” or working multiple jobs. Ravenelle points to research by the Federal Reserve that found 16% of American adults engage in gig work, and a recent report by H&R Block that showed that millennials work, on average, two jobs.

“It’s going to take two jobs to give you the same status of living that earlier generations could enjoy with one job,” Ravenelle said.
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Her new book, “Side Hustle Safety Net,” is based on interviews with nearly 200 workers, mostly in the New York City area, during the Covid pandemic. The book reveals the precarity of the gig economy during the best and worst times.
“There is no retirement when you do gig work,” Ravenelle said. “You simply get tired and stop doing it or you get deactivated from platforms because you’re not moving fast enough.”
CNBC interviewed Ravenelle, an assistant professor at the University of North Carolina at Chapel Hill, this month about how the rise of the gig economy has affected workers. (The interview has been edited and condensed for clarity.)

Sharing economy became ‘more about making money’

Annie Nova: Your interest in this topic is somewhat personal. Formerly, you said you were a “super-adjunct.” What is that?
Alexandrea Ravenelle: Before I went back to school to get my Ph.D., way before I started teaching at UNC, I was an adjunct at a lot of schools. It’s not unusual for somebody to adjunct at four or five places at the same time, and just drive from school to school.
AN: When did the gig economy begin?
AR: The gig economy comes out of the sharing economy, and the sharing economy dates back to the Great Recession. We had a high level of unemployment, and people were looking to make do with less. Instead of going out and buying a drill to assemble your Ikea furniture, you just want to borrow one from a neighbor. But very quickly, that sharing economy becomes less about saving money and more about making money. A friend giving you a ride, because it’s going to be cheaper than a taxi, becomes all about, how many workers can we get driving and how much money can we make?

Side Hustle Safety Net
Courtesy: Alexandrea Ravenelle

AN: What are some of the reasons people are increasingly working multiple jobs?
AR: There are a number of different reasons. Part of it is student debt; we have much higher levels of student loan debt with this generation than with past generations. We also see employers very deliberately try to keep somebody at 18, 24 or 27 hours a week, because once they hit 30 hours a week, then they’re on the hook for health insurance.
AN: How did the pandemic change the lives of gig workers?
AR: During early Covid, gig workers could get unemployment assistance for the first time ever. This was great for workers, and it shows what happens when workers get this money. Often, they use it to change their lives and really end up in a better place.
One college-educated worker had been doing Uber for four years, even though he thought it was going to be a short-term thing at first. He was able to use his unemployment assistance to stop doing ride-sharing, and actually become a community habilitation specialist. Now he’s helping individuals with developmental disabilities to be more involved in society.

A delivery-man pushes his bike along a street during a snow storm in New York.
Jewel Samad | AFP | Getty Images

How gig workers ‘get stuck’

AN: How can people plan for their future or try to work toward financial goals with such precarious work?
AR: It’s really hard to save money doing gig work. Often, people think that they’ve saved some money, and then they get their IRS bill, and they realize they really haven’t saved anything. They’re going to have to pay their taxes, and then the employer’s share of Social Security and Medicare.
AN: What stops workers from leaving the gig economy?
AR: A lot of the workers I’ve interviewed believe they’re going to be doing gig work for a little while. But I’ve followed up with people who’ve been doing it for 10 years.
Workers get stuck.
After somebody’s been doing it for six months, employers look at them, like, ‘What have you been doing? How does that mean you’re going to now use your college degree in an office?’ And so it becomes very difficult for people to move beyond gig work. I’ve talked to elite gig workers who’ve been doing it for three or four years, and they say they can’t get job interviews anywhere.

AN: It feels like the gig economy and side hustles can really be romanticized, as a way for workers to have more freedom and flexibility. What does this get wrong?
AR: For years, the platforms have marketed themselves as a solution to stagnant wages, and for those simply needing additional money. In reality, the work is not always there.
And when you do make money, it looks like you might be making a decent amount, but you’re not factoring in the payroll taxes that a W-2 employer would be withholding or paying on your behalf. You’re not factoring in things like your time, or the delay when you’re sitting there waiting to do a food delivery.
You get one ping, and then maybe it’s 40 minutes before you get another delivery. That is all wasted time that the platforms don’t pay you for. They’re relying on this kind of reserve labor force that’s willing to just sit on the sidelines waiting for work. It’s very much something out of Upton Sinclair’s, “The Jungle,” with people waiting outside the slaughterhouse gates, except people are waiting outside McDonald’s hoping they get a ping.
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More Americans are trapped in a credit card debt spiral and fewer are able to pay their bills in full at the end of the month.
Now, 49% of credit card holders carry debt from month to month, up from 46% last year, according to a new report by Bankrate.

Americans are increasingly leaning on their credit cards.
Altogether, card balances now total $1.08 trillion, according to the latest quarterly report from the Federal Reserve Bank of New York, a new record.

“Over the past two years, Americans’ credit card balances have skyrocketed 40%,” said Ted Rossman, senior industry analyst at Bankrate.
“While Americans are managing their credit card debt pretty well, all things considered, we are seeing pockets of trouble at the household level,” Rossman said.
More cardholders are carrying debt from month to month and fewer are able to pay off their balances in full, according to a separate report by Bankrate.com.
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Nearly half, or 49%, of credit card holders carry debt from month to month on at least one card, up from 46% last year, the report found, and 56 million cardholders have been in debt for at least a year.

“The current environment is tough,” Rossman said. “Although inflation has eased, there’s a cumulative effect there.”
This may also be a consequence of “shifts in lending, overextension, or deeper economic distress associated with higher borrowing costs and price pressures,” Fed researchers noted in a blog post.

Credit card interest rates top 20%

Not only can carrying a balance lower your credit score, but sky-high annual percentage rates also make revolving debt a particularly hard cycle to break.
The average credit card rate is now more than 20%, on average — an all-time high — after rising at the steepest annual pace ever, in step with the Federal Reserve’s interest rate hike cycle.
“Most cardholders’ rates have risen five-and-a-quarter percentage points during that span as a result of the Fed’s rate hikes meant to combat inflation,” Rossman said. “It’s no wonder, then, that we’re seeing more people carrying more debt for longer periods of time.”
Even though Fed officials indicated as many as three cuts coming this year, credit card APRs aren’t likely to improve much. 
“I don’t think that’s going to bring a lot of relief,” Rossman added.

The math is ‘brutal’

At 20.74%, if you made minimum payments toward the average credit card balance — which is $6,088, according to Transunion — it would take you more than 17 years to pay off the debt and cost you more than $9,072 in interest, Bankrate calculated.
“The minimum payment math is just brutal,” Rossman said.
The first thing you should do is acknowledge what you owe and the interest rate, he advised. Then, start to pay down the debt with a 0% balance transfer card.

Cards offering up to 21 months with no interest on transferred balances “are still widely available,” he added. If you can take advantage of that type of promotion on the same average balance and make 21 equal payments of just under $300, “you are out of debt in less than two years,” Rossman said.
Making the best use of a balance transfer boils down to making those payments on time and aggressively paying down the balance during the introductory period.
If you don’t pay the balance off, the remaining balance will have a higher APR applied to it, which is generally about 23%, on average, in line with the rates for new credit.
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The first step to achieving your financial goals is to understand where your money is, and know how much is coming in and going out. 
Break down a broad goal into small, well-defined tasks.
Make it fun, when possible: “The more you’re interested in your own goal, the more you’re going to read and learn,” one expert says.

Nora Carol Photography | Moment | Getty Images

This is the time of year for making — and breaking — resolutions.
With high inflation, rising interest rates, and economic uncertainty, two-thirds of American adults are making resolutions to improve their finances this year, according to a survey by Fidelity. Some of the most common include saving more money (41%), paying down debt (38%), and spending less money (30%).

Estimates vary, but people have been found to break their New Year’s resolutions within weeks, if not days.
Whether you’re just getting started or are trying to get back on track, here are some tips to help you achieve your money resolutions for 2024.

Set well-defined, achievable goals

Resolutions to save more money, pay down debt and spend less are common goals, but experts say they are too broad to be effective.
“A lot of people, much like with fitness, want to get into the best shape of their lives starting in the new year, and just like with finances, it doesn’t work that way,” said Michael Liersch, head of advice and planning at Wells Fargo Wealth and Investment Management.
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He says it works best to commit to small, well-defined tasks.
For example, “instead of thinking of spending less, become more intentional about your spending,” said Liersch, who also holds a Ph.D. in behavioral science.
Liersch said to start by asking yourself: “Are you really spending on things that give you joy?”
Break a bigger objective down into small steps to create habits that move you toward your goal. When you can, make those steps fun for you.
“The more you’re interested in your own goal, the more you’re going to read and learn,” said Pam Krueger, founder of Wealthramp, a fee-only advisor matching service. “The more attached you are, the more you’ll do it.”

Set a weekly appointment to ‘visit’ your money

The first step to achieving your financial goals is to understand where your money is, and know how much is coming in and going out. 
Many people don’t know how many accounts they have. Those might include checking and savings accounts, workplace retirement accounts, college savings accounts and investment accounts, as well as accounts for mortgage or home equity loans, auto loans and credit cards. 
Take the time, once a week for at least the first few months of the year, to “visit” your money. Put an appointment in your calendar for the same day and time each week. Use that time to look over your accounts to get an accurate picture of your take-home pay, how much money you’re spending and what you’re saving for short- and long-term goals. 
“Once you have a good understanding of that you will know what your needs are,” said Rachael Olson, director of product strategy for Discover Personal Loans. “Until you get that good picture of everything, it’s really hard to get started if you don’t know where you need to be.” 

Save in a high-yield savings account

If your goal is to save more, break that down. Figure out how much money you can put away each week into an emergency fund or save for a big purchase you plan to make this year or in the next few years. Stashing away a little weekly sum can add up, but it takes time. 
Some online-only banks have top interest rates on savings accounts at 5% or higher. If you open a high-yield savings account earning 5% interest, starting with just $20 and adding $20 a week and you don’t withdraw any money, you’ll have saved more than $1,000 at the end of a year.
With compound interest, you’re earning money on both your original principal and interest earned, so long as you keep those funds in the account.

Use debt as a tool, not a burden

Taking on debt may be the only way you can afford to make a resolution a reality, when it comes to homeownership or earning your college degree. It’s not that debt is unequivocally “good” or “bad,” it just has to be used wisely. 
Make sure your debt load is manageable. Know what you owe. Are you confident you’ll be able to make the set payments on a “buy now, pay later” program? Make sure to read the fine print so you know what the penalties could be. 
The average annual percentage rate on credit cards is far higher than on a buy now, pay later plan, rising from less than 15% as recently as last year to more than 20% last month — an all-time high. 

Try eliminating high-interest debt by transferring credit card balances to a new card that charges 0% interest for 12 to 18 months or more. Figure out how much you will have to pay on that card, likely above the minimum balance, to pay it off before the interest changes to a new rate that may be well above 20%. 
Another option is to consolidate the debt with a personal loan. The average personal loan rate was around 11.5% last month, half as much as the average rate on a credit card, according to Bankrate. 

Play the long game More

Workers install a Nike logo lamp outside the Wukesong Arena in Beijing, August 28, 2019.
Tingshu Wang | Reuters

The U.S. stock market started 2024 on a dismal note, but investors will need to look past the short-term uncertainty.
Rather than worrying about the slow start to the year, investors should focus on adding stocks with attractive long-term prospects to their portfolios.

With that in mind, here are three stocks favored by Wall Street’s top pros, according to TipRanks, a platform that ranks analysts based on their past performance.

Booking Holdings

This week’s first pick is Booking Holdings (BKNG), an online travel agency. The company is benefiting from strong travel demand despite a challenging macroeconomic backdrop.
Recently, Tigress Financial Partners analyst Ivan Feinseth reiterated a buy rating on Booking Holdings and increased his price target to $4,285 from $3,855. The analyst thinks that the company is well-positioned to gain from the secular shift in consumer spending trends toward travel and entertainment.
The analyst expects BKNG to witness higher bookings, driven by the continued strength in demand for travel coupled with the company’s artificial intelligence initiatives. In particular, he anticipates that the company’s AI advancements, including its Connected Trip offering, will bring down costs and enhance operating efficiencies.    
“BKNG’s strong balance sheet and cash flow will continue to drive ongoing investment in key growth initiatives and the resumption of share repurchases,” said Feinseth.

Overall, the analyst expects Booking Holdings to generate a higher return on capital, fueled by its dominant market position, solid execution, strong brand equity, diversified global presence and a technologically advanced platform.
Feinseth ranks No. 253 among more than 8,600 analysts tracked by TipRanks. His ratings have been profitable 62% of the time, delivering an average return of 10.9%. In addition, see Booking Holdings Insider Trading Activity on TipRanks. 

Nike

Athletic apparel and footwear company Nike (NKE) recently reported better-than-anticipated fiscal second-quarter earnings per share. However, the stock declined following the results as the company’s revenue fell short of estimates. Also, Nike lowered its full-year revenue outlook due to increased macro challenges, mainly in China and EMEA (Europe, the Middle East and Africa).
Despite the mixed results, Baird analyst Jonathan Komp reiterated a buy rating on Nike stock with a price target of $140. The analyst thinks that the reset in NKE shares following the fiscal Q2 print provides a better entry point for investors, given the expected recovery in the company’s margins in fiscal years 2025 to 2027.
While the revised revenue outlook might trigger a debate about macro versus brand-specific headwinds, the analyst remains bullish on NKE as its $2 billion cost-savings plan, gross margin improvement opportunity, and “focus on scaling new product still provide visibility to mid-teens+ EPS growth in F2025-2027E supporting a more attractive entry at ~25X P/E on F2025E.”
In his research note, Komp also highlighted Nike’s several other positives, including the company’s brand strength, solid execution, competitive positioning and digital leadership.
Komp holds the 376th position among more than 8,600 analysts on TipRanks. His ratings have been successful 53% of the time, delivering a return of 13.6%, on average. In addition, see Nike Hedge Funds Trading Activity on TipRanks.

Micron Technology

Finally, we move to the semiconductor company Micron Technology (MU), which is one of the largest providers of memory and storage chips in the world. The company recently reported strong results for the first quarter of fiscal 2024 and issued solid guidance.
The company expects its business fundamentals to improve throughout this year and is optimistic about capturing the growing demand for AI solutions.
Following the upbeat results, JPMorgan analyst Harlan Sur reaffirmed a buy rating on MU stock and raised the price target to $105 from $90. The analyst thinks that the company’s fiscal first quarter results and better-than-projected guidance for the fiscal second quarter reflect improved demand trends and normalization of excess customer inventories.
The analyst said that these favorable developments are driving higher prices for DRAM and NAND products across several markets such as smartphones, PCs, Internet of Things (IoT), automotive and the industrial sector. While the demand in data center and enterprise end-markets remains a bit soft, management expects the excess inventory situation among its customers to improve and reach more normal levels during the first half of this year.
“We believe the stock should continue to outperform through 2024 as the market continues to discount improving revenue/margin/earnings power into CY25,” said Sur, calling MU one of his top semiconductor picks for 2024.
Sur ranks No. 98 among more than 8,600 analysts tracked by TipRanks. His ratings have been successful 67% of the time, with each delivering an average return of 19.6%. In addition, see Micron Financial Statements on TipRanks.  More

Over the holidays, the use of “buy now, pay later” loans hit an all-time high.
Because the lenders generally don’t report to the major credit-reporting companies, it’s hard to know exactly how much of this debt is currently out there.
These loans can also be hard for consumers to keep track of, which can lead to debt problems, experts say.

Some types of debt can haunt you.
“Buy now, pay later” loans, especially, can be hard to track, making it easier for more consumers to get in over their heads, some experts say — even more than credit cards, which are simpler to account for, despite sky-high interest rates.

Over the holidays, the use of installment payments hit an all-time high, up 14% year over year, according to Adobe’s latest online shopping data.
Buy now, pay later is now one of the fastest-growing categories in consumer finance, according to a separate report by Wells Fargo.

‘Phantom debt’ may mean people are more in the red

“Because no central repository exists for monitoring it, growth of this ‘phantom debt’ could imply total household debt levels are actually higher than traditional measures,” said Tim Quinlan, senior economist at Wells Fargo and co-author of the report.
Since buy now, pay later loans are not currently reported to major credit reporting agencies, that makes it a challenge for a lender to know how many loans a consumer has outstanding, Quinlan said. 
“It’s hard to know how much of this debt is out there,” said Ted Rossman, senior industry analyst at Bankrate. “It’s this kind of shadow debt that’s hanging over people.”

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There’s a reason that buy now, pay later companies, such as Affirm, Afterpay and Klarna, are so popular among shoppers.
“With credit card interest rates north of 20%, a BNPL [buy now, pay later loan] affords consumers access to capital without increased costs,” Quinlan said.
“What we have is a business model that is perfect for uncertain times,” Affirm co-founder and CEO Max Levchin said recently on CNBC’s “Squawk on the Street.”
However, managing multiple buy now, pay later loans with different payment dates can also be a challenge, Quinlan added.
“BNPL could lead to an increase in consumer debt, as consumers may be more likely to take on additional debt if they know they can spread out the payments,” he said. “You can bury yourself in low monthly payments.”

While the typical terms might break a purchase into four equal interest-free payments, not all buy now, pay later loans work that way.
“A lot of these plans are stretching on longer and even charging interest; I find that very ironic,” Rossman said. “It’s feeling more and more credit-card like — that can get people into trouble.”
In addition, if a consumer misses a payment, there could be late fees, deferred interest or other penalties, depending on the lender. 
Separate studies have also shown that installment buying could encourage consumers to spend more than they can afford on impulse purchases.
“This can lead to debt problems,” Quinlan said.

Buy now, pay later operates in ‘de facto stealth mode’

Buy now, pay later products are not regulated in the same way as credit cards, which means there may be fewer protections in place for consumers, Quinlan said. 
“More worryingly, BNPL does this in de facto stealth mode because it largely flies beneath the radar of both regulators and policymakers,” Quinlan said.

Meanwhile, the Consumer Financial Protection Bureau has opened an inquiry into buy now, pay later lenders.
The CFPB said it is particularly concerned about the lack of clear disclosures of loan terms as well as how these programs affect consumer debt accumulation, what consumer protection laws apply and how the payment providers harvest data.
“Until there is a definitive measure for it, there is no way to know when this phantom debt could create problems for the consumer and the broader economy,” Quinlan said.
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Federal Reserve officials expect three quarter-percentage-point cuts in 2024, but there’s lingering uncertainty over when, or if, those changes may occur.
With interest rates in limbo, savers may consider certificates of deposit, Treasury bills or money market mutual funds for short-term cash.

Boy_anupong | Moment | Getty Images

After higher yields in 2023, investors are bracing for interest rate cuts that could put a damper on shorter-term savings.
Federal Reserve officials expect three quarter-percentage-point cuts in 2024, according to December meeting minutes released Wednesday. But there’s lingering uncertainty over when, or if, those changes may occur.

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With the Fed policy in limbo, savers have several options to consider for their cash, depending on their goals and timeline, explained Ken Tumin, founder and editor of DepositAccounts, which closely tracks rates.
Here are four of the best options for cash in 2024, according to Tumin and other financial experts.

1. Certificates of deposit

With interest rates in flux, you can lock in a higher yield for 2024 with a certificate of deposit, or CD, Tumin said.
CDs earn interest for a set period. Rates may be higher than savings accounts, but you’ll typically incur a penalty if you need the money before the CD matures.

Currently, the top 1% average rate for one-year CDs is above 5.5%, as of Jan. 4, according to DepositAccounts. But “as we get closer to the Fed rate cut, CDs will start going down,” Tumin said.

As we get closer to the Fed rate cut, CDs will start going down.

Founder and editor of DepositAccounts

The average penalty for a one-year CD is three months of interest, according to Tumin. But early withdrawal penalties can be higher, so it’s important to read the fine print.

2. Penalty-free certificates of deposit

If you may need the money in less than one year, you can opt for a penalty-free CD, which can “optimize yield without much work,” Tumin said.
Penalty-free CDs typically offer lower interest than a traditional CD, but you may find one at your current bank with a higher rate than your savings account. Plus, there’s no early withdrawal fee if you need the money before maturity.

3. Treasury bills

Whether you’re saving for short-term or long-term goals, Treasury bills, or T-bills, are a “great place for cash right now,” said certified financial planner Patrick Lach, founder of Lach Financial in Louisville, Kentucky, and assistant professor of finance at Indiana University Southeast.
Backed by the U.S. government, T-bills have terms ranging from one month to one year and can be purchased via TreasuryDirect or a brokerage account and interest isn’t subject to state or local taxes.

How to buy T-bills through TreasuryDirect
1. Log in to your TreasuryDirect account.
2. Click “BuyDirect” in top navigation bar.
3. Choose “Bills” under “Marketable Securities.”
4. Pick your term, auction date, purchase amount and reinvestment (optional).

As of Jan. 4, 1-month and 2-month T-bills were yielding roughly 5.4%. If you’re in the 13% tax bracket in California, your after-tax yield for those T-bills may be equivalent to a CD earning 6.21%, Lach said.
However, T-bills purchased via TreasuryDirect aren’t as liquid as cash held in a savings account or a penalty-free CD. If you want to sell T-bills before maturity, you must keep the asset in TreasuryDirect for at least 45 days before transferring it to your brokerage account. You can learn more about the transfer process here.

4. Money market mutual funds

Money market mutual funds are another “great option” for cash, said CFP Seth Mullikin, founder of Lattice Financial in Charlotte, North Carolina.
Money market funds, which are different than money market deposit accounts, are a mutual fund that typically invests in shorter-term, lower-credit-risk debt, like Treasury bills. While money market funds are relatively low risk, your cash won’t have Federal Deposit Insurance Corporation protection.
Currently, some of the largest money market funds are paying roughly 5.5%, as of Jan. 4, according to Crane Data. However, money market yields “follow the Fed closely,” Tumin said. “So when they do cut, you can be pretty assured those will fall very fast.”

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Dobrila Vignjevic | E+ | Getty Images

Company: Nihon Kohden  

Company: Nihon Kohden (6849.T-JP)
Business: Nihon Kohden is a Japan-based company engaged in the research, development, manufacture and sale of medical electronic equipment, as well as the provision of maintenance and repair services. The company offers a wide array of devices to aid with medical diagnoses, including electroencephalographs, evoked potential testing equipment, electrocardiographs, cardiac catheterization equipment, diagnostic information systems and related consumables. The company is also engaged in the sales promotion for its products, as well as the general affair-related and manpower dispatching businesses.

Stock Market Value: $2.6B ($31.02 per share)

Activist: ValueAct Capital

Percentage Ownership: 5.01%
Average Cost: n/a
Activist Commentary: ValueAct has been a premier corporate governance investor for over 20 years. ValueAct principals are generally on the boards of half of the firm’s core portfolio positions and have had 56 public company board seats over 23 years. ValueAct has been a pioneer of U.S.-led international activism, primarily in Japan. ValueAct’s co-CEOs, Rob Hale and Mason Morfit, are also co-portfolio managers of the firm’s Japan fund. A significant amount of the portfolio is invested internationally. Hale is on the boards of Japanese companies, which is somewhat of an unprecedented and industry-leading action for U.S. activist funds. ValueAct has had 26 prior international activist investments and has had an average return of 36.19% versus an average of 4.04% for the MSCI EAFE index over the same periods. Moreover, two of their best international investments have been two Japanese companies where Hale is on the board – Olympus (109.48% versus 7.68% for the MSCI EAFE) and JSR (116.86% versus 38.57% for the MSCI EAFE).

What’s happening

On Dec. 25, ValueAct reported holding 5.01% of Nihon Kohden.

Behind the scenes

ValueAct has been a pioneer of U.S.-led activism in Japan. A significant amount of the firm’s portfolio is invested internationally. Two of its best international investments have been a pair of Japanese companies where ValueAct co-CEO Rob Hale is on the board: Olympus and JSR. Nihon Kohden is a Japanese medical devices manufacturer and distributor with a dominant market presence at home and an excellent reputation internationally for on-time delivery, service and product quality.
This is the third Japanese medical device company ValueAct has invested in. Notably, the firm invested in Olympus in 2017, received a board seat in 2019 and remains on the board today. Both Olympus and Nihon Kohden are global medical device companies. However, Olympus derives 80% of its revenue from outside of Japan, whereas Nihon Kohden gets approximately 40% of its revenue from outside of Japan. However, both companies have excellent products and an ambition to be global, and Nihon Kohden could follow a path to globalization that’s like the one Olympus has taken.
There are three primary levers for value generation at Nihon Kohden: operating margin expansion, optimizing the mix of equipment versus consumables and services revenue, and disciplined capital allocation. First, despite having 51% gross profit margins, Nihon Kohden’s operating margins are only at 10%, whereas competitors in both Japan and abroad are in the mid to high teens. With approximately 60% market share in Japan, where some of its revenue comes from distributing third-party products, and 10% market share in the U.S., where the company has proprietary products, the growth and margin potential is greater in the U.S. Nihon Kohden can use its reputational strength to capitalize on the U.S. market. The company has an opportunity to quickly get to 15% operating margins within a few years and can see incremental improvement in following years.  
Second, Nihon Kohden has historically been focused on hardware sales and its revenue is split approximately evenly between hardware and consumables and services. However, there is an opportunity for value creation if the company pursues a strategy to increase its revenue from consumables and services due to the recurring nature and higher margins of that type of revenue. From these two strategies alone, Nihon Kohden can drive 20% profit growth over the next three years.
Third, the company is currently sitting on net cash equivalent to about 15% of its market cap. Like many Japanese companies, Nihon Kohden could create value from an accretive capital deployment strategy that evaluates returning capital to shareholders or disciplined M&A. Historically, buying back shares hasn’t been a popular tactic in Japan, but share repurchases have been increasing over recent years. The Tokyo Stock Exchange has been encouraging them as part of a process to get companies to trade over one times book value.  
ValueAct has an earned reputation as a collaborative and amicable activist, and there is no reason why this situation should be any different. Before building up such a position, ValueAct likely has been getting to know management over the past year and spent considerable time with CEO Hirokazu Ogino. Moreover, ValueAct would not have made this investment if the firm did not have a high degree of respect for Ogino and the rest of the management team. We expect that ValueAct and management are aligned on their views, particularly with respect to margin improvement and capital allocation.
ValueAct does not take board seats through fear or force, but organically via dialogue and harmony. Accordingly, we would expect the firm to continue to support management as an active shareholder and only take a board seat at a time that both ValueAct and management feel the investor could add value. At Olympus, that took two years. At JSR, it took over a year. Both companies have been incredibly successful engagements for them, returning 109.48% at Olympus versus 7.68% for the MSCI EAFE, and 116.86% at JSR versus 38.57% for the MSCI EAFE. ValueAct is still on the board at both companies. A similar outcome here can result in almost a doubling of the stock in two to three years.
Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments.  More

Social Security retirement benefits provide guaranteed income for your lifetime.
Here’s how that money may benefit your family after you die.

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Once you start Social Security retirement benefits, you are generally guaranteed to receive monthly checks for life.
But that will stop once you die — with some exceptions for your loved ones.

A one-time lump-sum death payment of $255 may be available, provided your survivors meet certain requirements.
For example, a surviving spouse may be eligible for the death payment if they were living with the person who passes away. If the spouse was living apart from the deceased, but was receiving Social Security benefits based on their record, they may also be eligible for the $255 sum.
If there is no surviving spouse, children of the deceased may instead be eligible for the payment, so long as they qualify to receive benefits on their deceased parent’s record when they died.
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The Social Security Administration should be notified as soon as possible when a beneficiary dies to cancel their benefits. Funeral homes often report a death to the agency. But it would be wise for survivors to also report it, according to Jim Blair, vice president of Premier Social Security Consulting and a former Social Security administrator.

Other benefit payments may need to be returned

Though a one-time death payment may be available, any benefit payments received by the deceased in the month of death or after must be returned, according to the Social Security Administration.
However, how this rule is handled depends on the timing of the death.
Social Security checks are paid for the benefits earned the month before. The schedule of the monthly Social Security payments depends on a beneficiary’s date of birth, and mostly fall on either the second, third or fourth Wednesday.
If someone receives their monthly Social Security payment and then dies, the Social Security Administration may not take the money back, according to Blair.
But if instead the beneficiary dies and then receives their monthly Social Security check, it may have to be paid back, he said.
The Social Security Administration cautions against cashing any checks or keeping direct deposits received in the month of death or later.
If a deceased beneficiary was due a Social Security check or a Medicare premium refund when they died, a claim may be submitted to the Social Security Administration.

Plan ahead for survivor benefits

But financial planning should not stop there.
“People need to take into account how important Social Security is in their estate planning,” Blair said.
For example, if you claim retirement benefits at age 62, your benefits are reduced, and so are the survivor benefits that become available when you die, Blair said. If you wait to claim benefits until age 70, the maximum age until which you can delay monthly Social Security retirement checks and see your benefits increase, the survivor benefit is also increased.
What’s more, that added income may help you preserve other assets that you can leave behind.
“Your other wealth you can pass on to your spouse and other children and your loved ones,” said Bruce Tannahill, a director of estate and business planning with MassMutual.

‘One of the most frequently missed benefits’

Certain family members may be eligible to receive survivor benefits based on the deceased beneficiary’s earnings record starting as soon as the month they died, according to the Social Security Administration.
That may include a surviving spouse age 60 or older.
When both spouses have claimed Social Security benefits and one dies, the rule of thumb is the larger benefit continues and the smaller benefit goes away, according to Joe Elsasser, a certified financial planner and president of Covisum, a Social Security software claiming company.
But there can be pitfalls, particularly for couples who have been together for years but never married, he noted.

Some states will treat those unions as common law marriages, which are recognized by the Social Security Administration. However, other states may have no such arrangements, which means survivor benefits would not be available to the living partner should their significant other die.
In many cases, Elsasser said he would recommend those couples get married, particularly when one member of a couple has a very high Social Security benefit and the other doesn’t.
Of course, marriage does not always make sense financially for all couples, he said.
Another pitfall may emerge for younger widows or widowers who remarry by age 59, for example.
“That could be a very bad thing, because it can prevent you from accessing the widow benefit under your ex,” Elsasser said.
If instead someone remarries after age 60, they are still entitled to a survivor benefit from a deceased spouse, according to Blair.

Others who may be eligible for benefits on a deceased beneficiary’s record include:

A surviving spouse 50 or older who has a disability

A surviving divorced spouse if they meet certain qualifications

A surviving spouse who is caring for a deceased’s child under age 16 or who has a disability

An unmarried child of the deceased who is under 18, or up to 19 if they are a full-time elementary or secondary school student, or age 18 and older with a disability that began before age 22.

“Divorced widow benefits are actually one of the most frequently missed benefits by people because they don’t know they’re available,” Elsasser said.
For example, if you’re 70 and were divorced 20 years ago, you may not know that your ex has died, nor think to check with the Social Security Administration to see if their benefit would be higher than yours, he said.
Importantly, the Social Security Administration will not notify you those benefits are available, Elsasser said.

Note the family maximum, and other tips for survivors

In certain circumstances, other family members may be eligible for survivor benefits, including adopted children, stepchildren, grandchildren or step-grandchildren.
Parents age 62 or older may also be eligible for benefits if they were a dependent of the deceased for at least half of their support.
A family maximum limits how much can be collected when there are multiple family members claiming on one record, such as a surviving mother and three children, according to Elsasser. However, this rarely affects retirees, because exes do not count as part of a family maximum, he noted.
Additionally, in some cases an earnings test threshold may offset the amount of benefits you receive if you also have earned income.
Here are some important tips for survivors to keep in mind:

Claimants may want to file a restricted application. It is possible to claim a widow’s benefit while letting your own retirement benefit grow, or vice versa, according to Elsasser. For example, you may claim a widow’s benefit at 60, and then switch to your own retirement benefit at age 70.

Social Security can provide a “benefit matrix” comparing benefit options. The document may show you how your monthly benefit and your survivor benefits compare. “We always tell folks, if they’re looking to determine the best course of action between their own benefit and or a surviving spouse benefit, contact SSA and get the benefit matrix report that will give you the information you need to make a decision,” said Marc Kiner, president of Premier Social Security Consulting.

Social Security will not tell you what strategy will give you maximum lifetime benefits. While Social Security personnel may tell you how to get the highest benefit on the day you visit an office or call, they will not necessarily tell you how to get the maximum benefits over your lifetime, Elsasser said. Consequently, it is best to seek more personalized outside advice to identify the best strategy for your situation.

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