Investing

When working toward financial goals, experts say individuals often neglect to plan for their personal happiness.
By creating an “opportunity fund,” you may be able to quickly reset if you want to change jobs or move.
Even celebrating small wins may help you create momentum toward bigger financial progress.

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When it comes to saving and investing, many investors tend to think of two key goals — funding emergencies that could crop up in the short term or retirement that may be years away.
But as many individuals continue to reconsider their goals following the Covid-19 pandemic, experts say that that thinking is changing. And that’s prompting a need for investors to place a new priority on funding nearer-term goals, say financial planners who work with them.

Enter the “opportunity fund,” as some experts are calling it.
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“Covid kind of changed the way a lot of us think about the way we want to live, where we want to live, what opportunities might come — career, life, you name it,” said Brent Weiss, a certified financial planner and head of financial wellness at Facet, a registered investment advisor firm based in Baltimore.
“Now we’re starting to see people say, ‘I don’t know that I want to put all of my money in this retirement fund for 30 years away from today; I might want to do something different in three or five years,'” Weiss said.
Those goals may include starting a company, going back to school or switching jobs or careers, Weiss said. Or it may include big-ticket vacations or experiences.

‘What is the life you want to live?’

Identifying such opportunity fund goals can be a financial wake-up call.
Weiss said he typically begins meetings by asking clients what matters most to them and what do they want to do, particularly in the next three to five years.
“What is the life you want to live?” Weiss said he asks them.
Carolyn McClanahan, a CFP and founder of Life Planning Partners in Jacksonville, Florida, said she gives a talk titled, “Are you happy now?”

“When you make that mindset of maximizing the clients’ life now, it really changes the conversation,” said McClanahan, who is also a member of the CNBC FA Council.
For example, instead of focusing on retirement planning with someone who hates their job, more immediate questions should be asked, such as what can be changed to make the position more likeable or can they change careers, she said.
The savings then becomes all about furthering those transitions alongside short-term and long-term goals.
“By focusing on planning for now, it makes the client more resilient for whatever the future throws their way,” McClanahan said.
To find ways to build an opportunity fund to improve your life, three tips may help.

1.  Treat money as a tool

Start by getting clear on what you want to achieve and when, Weiss advised. From there, start to identify what kind of contributions you may need to help achieve your goals.
“Money is just a tool to help you achieve success, however you define it,” Weiss said.

2. Match your investments to your goals

Boonchai Wedmakawand | Moment | Getty Images

The time horizon you identify for what you want to achieve should help guide where you save or invest the money to pay for those items on your to-do list.
That may include creating a separate strategy for three- to five-year goals apart from emergency or retirement funds, which may include high-yield savings accounts or bonds, Weiss said.
However, McClanahan said it can be OK to keep liquid funds for both emergencies or near-term life goals together.
For goals less than five years away, “there’s no reason to invest that in the stock market,” she said.

3. Celebrate small wins

Regardless of your financial goal, making progress can sometimes feel like an uphill battle. That makes it important to regularly celebrate small wins, Weiss said.
For example, if you have credit card debt and put all of your free cash flow toward paying those balances down, it will feel very much like a diet.

“It’s going to be emotionally straining,” Weiss said. “You’ll probably relapse in three months and go back to your old ways.”
Instead, if you allocate a certain amount of funds to ways to celebrate your progress — say by buying dinner out after paying down a credit card balance — you will still be able to enjoy your money while working toward your goals.
“Your mindset matters,” Weiss said. “If we focus only on the money part of life, and we forget about our mindset and our psychology, we’re never going to start creating the change or success that we want to see.” More

The third-quarter estimated tax deadline for 2023 is Sept. 15, and applies to income from self-employment, small businesses, investments, gig economy work and more.
Typically, you need to make estimated payments if you’re expecting an annual tax liability of $1,000 or more.
But you can avert an IRS penalty by paying the lesser of 90% of taxes for 2023 or 100% of your 2022 levies if your adjusted gross income is less than $150,000.

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Sept. 15 is fast approaching — and if you’re not withholding taxes from your income, it’s time to send a payment to the IRS.
Many employers withhold taxes from every paycheck, but freelancers, self-employed workers, small business owners, investors and others pay on their own via quarterly estimated tax payments.

Typically, you must make quarterly estimated payments if you’re expecting an annual tax liability of $1,000 or more. Last week, the IRS reminded filers that these payments can help “avoid a surprise at tax time.”
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“Estimated tax payments are crucial for meeting tax obligations throughout the year, avoiding penalties and staying on top of your finances,” said Sean Lovison, a Philadelphia-area certified financial planner with WJL Financial Advisors. He is also a certified public accountant.
It’s important to calculate tax payments accurately, pay on time and to consider meeting the “safe harbor” rule to avoid underpayment penalties, Lovison said.
“Keep records, monitor your tax situation, and seek professional guidance for a smooth tax experience,” he said.

Meet the ‘safe harbor’ requirements

Since the U.S. tax system is “pay-as-you-go,” you may face penalties for not staying current, said CFP Kathleen Kenealy, founder of Katapult Financial Planning in Woburn, Massachusetts.
If you miss any of the four estimated tax payment deadlines for 2023 — April 18, June 15, Sept. 15 or Jan. 16, 2024 — you’ll incur a late penalty of 0.5% of your unpaid balance per month or partial month, up to 25%, plus interest.

However, the IRS has a “safe harbor” to avoid underpayment penalties, Kenealy explained. You meet the requirements by paying at least 90% of the current year’s tax liability or 100% of last year’s taxes, whichever is smaller.
But the rule is “a little different for high-income taxpayers,” she said. If your 2022 adjusted gross income was $150,000 or more, you need to pay the lower of 90% of the current year’s tax liability or 110% of last year’s taxes to meet the safe harbor requirement for 2023. Adjusted gross income can be found on line 11 of your 2022 tax return.

How to make estimated tax payments

Electronic payments are the “easiest, fastest and most secure” option for estimated tax payments, according to the IRS.
Online options include payments through your online account, via Direct Pay, the Electronic Federal Tax Payment System and more. However, you’ll incur a fee for debit and credit card payments. You can learn more about how to make payments here. More

Interest rates are higher than they have been in years, and so are the potential returns on cash.
That is changing conversations financial advisors have with their clients.
Here’s what those experts say individual investors should keep in mind about their cash holdings now.

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Not long ago, it was common to earn low returns on cash — less than 1%.
But after the Federal Reserve embarked on a series of interest rate increases to tamp down inflation, that has changed. Now, investors may get as much as 5% or more interest on their savings — the most they have been able to earn in about 15 years.

“What I hear from advisors these days is the phrase, ‘This is real money now,'” said Michael Halloran, head of partnerships and business development at MaxMyInterest, a company working with advisors and consumers to identify best interest rates on cash.
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When rates were low, cash was more of an afterthought during reviews with clients, according to Heather Ettinger, chairwoman of Fairport Wealth in Cleveland, Ohio.
“Now, I look at those numbers, and it’s like, ‘Wow, it’s not all bad to be sitting on some cash,'” Ettinger said.
The more cash you have, the more the interest can add up.

Investors with portfolios of $1.5 million or $2 million may be holding as much as $300,000 or $400,000 in cash, noted Halloran. At 5%, that may earn $25,000 to $30,000 per year. Over 10 years, that may add up to $300,000, he said.
Even more modest cash sums may still provide meaningful returns. A $50,000 cash reserve earning 5% interest would have $2,500 in interest income over the course of a year, noted Steve Stelljes, president of client services at The Colony Group, which has offices in several states.

‘Almost all of this cash is sitting in the wrong place’

Yet all savers are susceptible to making the same mistake — not putting their money in accounts that provide the best yield.
Just 1 in 5 savers have competitive interest rates of 3% or better on their cash, a Bankrate survey from earlier this year found.
Just 31% of those with incomes of $100,000 or more were earning at least 3% on their cash.

Yet savers in that income group were most likely to be getting higher rates. Only 19% of savers with incomes between $80,000 and $99,999 were earning 3% or more on their savings, as were 22% of those with incomes between $50,000 and $79,999, and 17% of those under $50,000.
“Here’s this $17 trillion industry, and almost all of this cash is sitting in the wrong place,” said Gary Zimmerman, CEO of MaxMyInterest.
Experts say it’s an issue savers need to address.
“Every investor should have their reserve savings working for them,” said Max Lane, CEO of Flourish, a fintech company providing a cash management product to advisors.
“There’s no reason somebody shouldn’t be getting at least 4% right now,” Lane said.
Here are several mistakes with cash that financial advisors say investors should try to avoid.

Mistake 1: Not shopping around for the best rates

While many savers may know they can get better interest on their money, it is very easy to do nothing.
“Inertia is one of the strongest powers in nature,” said Tim Harrington, a certified financial planner and founder of Longview Financial Advisors, which is based in San Rafael, California.
For savers who are keeping large balances in accounts providing low interest rates, Harrington said he tries to explain to them that they are losing spending power over time.
While a brick-and-mortar bank may be offering 0.25% interest on savings, inflation is 3.2%, based on the latest consumer price index data.
“You should shop around,” Harrington said.

Mistake 2: Holding too much cash

Some people may be tempted to hold cash to see where the markets go. When they look back, they’ll often find that was a foolish trade, according to Harrington.
For example, if they had invested that money in the S&P 500 instead, they would be up over 15% this year.
Money earmarked for long-term goals should always be invested in the market, he said. Cash is appropriate for emergency funds and other near-term goals, where the timeline is less than five years.

Yet some investors may be more comfortable holding cash due to the feeling of safety it provides.
“The way your gut feels is usually the exact opposite of the way you should be investing,” Harrington said.
If you have a financial advisor, you should be talking to them about all of your cash savings, according to Lane at Flourish. While financial advisors tend to believe they manage all of their clients’ money, no financial advisor truly does, Lane said.

Mistake 3: Not having proper FDIC coverage

The failure of Silicon Valley Bank has prompted savers to question whether their cash balances are fully insured for the first time since the financial crisis of 2008. The answer is generally yes, if the institution that has their money is insured by the Federal Deposit Insurance Corporation, or FDIC.
But there are limits to those protections. Depositors generally have up to $250,000 of coverage per bank, per account ownership category through the FDIC.
When banking troubles cropped up earlier this year, the federal government stepped in as a backstop regardless of those limits. But savers should not count on that happening again, Stelljes said.
“It’s really being aware of how much you have and whether you’ve exceeded the limit,” Stelljes said.
Investors may be able to access additional FDIC coverage by opening more accounts at their financial institution, he said. Some platforms can offer enhanced FDIC protection by using multiple support banks.
It is important to know whether your institution offers FDIC protection, what your personal limits are and whether you’re exceeding them, and, if so, there are options to address that, he said. More

Verizon CEO Hans Vestberg on the floor at the New York Stock Exchange (NYSE) in New York, U.S., October 22, 2019.
Brendan McDermid

When markets get choppy, dividends offer investors’ portfolios some cushioning in the form of income.
Dividends provide a great opportunity to enhance investors’ total returns over a long-term horizon. Investors shouldn’t base their stock purchases on dividend yields alone, however: They ought to assess the strength of a company’s fundamentals and analyze the consistency of those payments first. Analysts have insight into those details.

To that effect, here are five attractive dividend stocks, according to Wall Street’s top experts on TipRanks, a platform that ranks analysts based on their past performance.

Verizon Communications

Let us first look at telecommunication giant Verizon (VZ). The stock offers a dividend yield of 8%. Last week, the company declared a quarterly dividend of 66.50 cents per outstanding share, an increase of 1.25 cents from the previous quarter. This marked the 17th consecutive year the company’s board approved a quarterly dividend increase.
Recently, Citi analyst Michael Rollins upgraded Verizon and its rival AT&T (T) to buy from hold. The analyst increased his price target for Verizon stock by $1 to $40, while maintaining AT&T’s price target at $17.
Rollins noted that several headwinds like competition, industry structure, higher rates and concerns about lead-covered cables have affected investor sentiment on telecom companies. That said, he has a more constructive outlook for large cap telecom stocks.
“The wireless competitive environment is showing positive signs of stabilization that should help operating performance,” said Rollins, who ranks No. 298 out of more than 8,500 analysts on TipRanks.

The analyst contended that the recently announced price hikes by Verizon and AT&T indicate a stabilizing competitive backdrop for wireless. He further noted that customers continue to hold onto their phones for longer, which is reducing device upgrade costs and stabilizing churn.
Overall, the analyst sees the possibility of some of the ongoing market concerns fading over the next 12 months. Also, he expects the prospects for improved free cash flow to lower net debt leverage and support the dividend payments. 
Rollins has a success rate of 65% and each of his ratings has returned 13.3%, on average. (See Verizon Hedge Fund Trading Activity on TipRanks)

Medtronic

Medical device company Medtronic (MDT) recently announced a quarterly dividend of $0.69 per share for the second quarter of fiscal 2024, payable on Oct. 13. MDT has increased its annual dividend for 46 consecutive years and has a dividend yield of 3.5%. 
Reacting to MDT’s upbeat fiscal first-quarter results and improved earnings outlook, Stifel analyst Rick Wise explained that continued recovery in elective procedure volumes, supply chain improvements and product launches helped drive revenue outperformance across multiple business units.
The analyst thinks that Medtronic’s guidance indicates that it is now well positioned to more consistently deliver better-than-expected growth and margins. He also expressed optimism about the company’s transformation initiatives under the leadership of CEO Geoff Martha.
“We view Medtronic as a core healthcare holding and total return vehicle in any market environment for investors looking for safety and stability,” said Wise, while raising his price target to $95 from $92 and reaffirming a buy rating.
Wise holds the 729th position among more than 8,500 analysts on TipRanks. Moreover, 58% of his ratings have been profitable, with each generating a return of 6.3%, on average. (See Medtronic Insider Trading Activity on TipRanks)   

Hasbro

Another Stifel analyst, Drew Crum, is bullish on toymaker Hasbro (HAS). He increased the price target for Hasbro to $94 from $79 while maintaining a buy rating, and moved the stock to the Stifel Select List.
Crum acknowledged that HAS stock has been a relative laggard over the past several years due to many fundamental issues that resulted in unhappy investors.
Nevertheless, the analyst is optimistic about the stock and expects higher earnings power and cash flow generation, driven by multiple catalysts like portfolio adjustments, further cost discipline, greater focus on gaming and licensing, as well as a new senior leadership team.
Crum noted that Hasbro grew its dividend for 10 consecutive years (2010-2020) at a compound annual growth rate of over 13%, with the annual payout representing more than 50% of free cash flow, on average. However, any upward adjustments were limited following the Entertainment One acquisition, with only one increase during 2021 to 2023.
The analyst thinks that given the current dividend yield of around 4%, Hasbro’s board might be less inclined to approve an aggressive raise from here. That said, with expectations of higher cash flow generation, Crum said that “the company should have more flexibility around growing its dividend going forward.”
Crum ranks 322nd among more than 8,500 analysts tracked by TipRanks. His ratings have been profitable 59% of the time, with each rating delivering an average return of 12.9%. (See Hasbro Stock Chart on TipRanks)

Dell Technologies

Next up is Dell (DELL), a maker of IT hardware and infrastructure technology, which rallied after its fiscal second-quarter results far exceeded Wall Street’s estimates. The company returned $525 million to shareholders through share repurchases and dividends in that quarter. DELL offers a dividend yield of 2.1%.
Evercore analyst Amit Daryanani maintained a buy rating following the results and raised his price target for DELL stock to $70 from $60. Daryanani ranks No. 249 among more than 8,500 analysts tracked by TipRanks.
The analyst highlighted that Dell delivered impressive upside to July quarter revenue and earnings per share (EPS), driven by broad-based strength across both infrastructure and client segments. Specifically, the notable upside in the infrastructure segment was fueled by GPU-enabled servers.
The analyst also noted that Dell generated $3.2 billion of free cash flow in the quarter and is currently running at over $8 billion free cash flow on a trailing twelve-month basis. This implies that the company has “plenty of dry powder” to significantly enhance its capital allocation program, he added.
“We think the catalysts at DELL are starting to add up in a notable manner ranging from – cap allocation update during their upcoming analyst day, AI centric revenue acceleration and potential S&P 500 inclusion,” said Daryanani.
In all, 60% of his ratings have been profitable, with each generating an average return of 11.5%. (See Dell’s Financial Statements on TipRanks)

Walmart

We finally come to big-box retailer Walmart (WMT), which is a dividend aristocrat. Earlier this year, the company raised its annual dividend for fiscal 2024 by about 2% to $2.28 per share. This marked the 50th consecutive year of dividend increases for the company. WMT’s dividend yield stands at 1.4%.
Following WMT’s upbeat fiscal second-quarter results and upgraded full-year outlook, Baird analyst Peter Benedict highlighted that traffic gains in stores and online channels reflect that consumers are choosing Walmart for a blend of value and convenience.
Benedict also noted that the company’s efforts to drive improved productivity and profitability are gaining traction.
The analyst reiterated a buy rating on WMT and raised the price target to $180 from $165, saying that the new price target “assumes ~23x FY25E EPS, slightly above the stock’s five-year average of ~22x given the company’s defensive sales mix, market share gains, and an improved long-term profit/ROI profile as alternative revenue streams scale.” 
Benedict ranks 94th among more than 8,500 analysts tracked by TipRanks. His ratings have been profitable 68% of the time, with each rating delivering an average return of 13.7%. (See Walmart’s Technical Analysis on TipRanks)   More

In 2011, San Francisco began automatically opening a college savings account for every child entering kindergarten in the public school system.
Now those students are going to college.
Even small amounts of savings can make children more likely to get a degree, research shows. “This is really a tool for supporting a college-going mindset,” said Citi’s Brandee McHale.
Other cities, and even a few states, have started similar initiatives following San Francisco’s lead.

Odilon Dimier | PhotoAlto | Getty Images

Even though more students feel priced out of college entirely, there are efforts to improve access to higher education that seem to be working.
In 2011, San Francisco made headlines when it became the first city in the nation to kick off a college savings account with $50 for every child entering kindergarten in the public school system.

Now those students are about to enter college.
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Yadira Saavedra, 17, is one of the more than 600 students from San Francisco who will start college with financial assistance from the Kindergarten to College, or K2C, savings program.
Her parents saved $2,200 in a universal children’s savings account, which helped change her perspective about getting a degree, she said.
“My family has always pushed me to go to college, but I felt bad,” Saavedra added. “I didn’t really know how much college cost; I just knew it was a lot of money.”

This fall, she is an incoming freshman at the University of California, Davis. She plans to study archeology or sociology.

To pay the tab, Saavedra will rely on a combination of resources, she said, including the savings and need-based aid. “It means hope for me that I’m able to go to college, and I’m very proud of that.”
“These accounts have made a difference,” said José Cisneros, San Francisco’s treasurer.
College affordability is an ongoing problem.
Tuition and fees have more than doubled in 20 years, reaching $10,940 at four-year, in-state public colleges, on average, in the 2022-23 academic year. At four-year private colleges, it now costs $39,400 annually, according to the College Board, which tracks trends in college pricing and student aid.

Arrows pointing outwards

When adding in other expenses, the total tab can be more than $70,000 a year for undergraduates at some private colleges or even out-of-state students attending four-year public schools.
That, along with ballooning student debt balances, is enough to deter many high school students from considering college.
And yet, even when families have saved less than $500, low- to moderate-income children are three times more likely to enroll in college and more than four times more likely to graduate from college than those with no savings account, according to a study by the Center for Social Development at George Warren Brown School of Social Work at Washington University in St. Louis.
“Just engaging with that account builds an awareness and aspirations,” Cisneros said.
Since the program started, the balances have grown to $15 million, he added. “Every dollar represents conversations that have been happening in households.”
“This isn’t about providing just a savings account,” said Brandee McHale, global head of community investing and development at Citi, which helped implement the program. “This is really a tool for supporting a college-going mindset.”

Moreover, the success of the program has led to adoption of similar savings initiatives across the country. There are now more than 120 universal children’s savings account programs in 39 states, according to recent data.
New York City, Boston and Los Angeles all have their own programs, which include additional funding and rewards for parents who continue to build up the balances.
San Francisco’s model also helped encourage California to launch CalKIDS, the nation’s largest children’s savings account program, in 2022.
The statewide initiative allocated $1.9 billion to fund college savings accounts of $500 each for 3.7 million low-income California public school students from first to 12th grade. Students who are in foster care or are homeless received an additional $500.
Like most other plans, the savings can be rolled into a 529 college savings account — a tax-advantaged way to save for college or other schooling and related expenses.
Saavedra, who is a first-generation college student, said she’s most excited that her younger siblings will be able to participate, as well.
“They’re going to be like, ‘My sister went to college.’ It’s going to be so much more achievable,” she said.
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An Outback Steakhouse truck sits parked outside a restaurant in New York.
Daniel Acker | Bloomberg | Getty Images

Company: Bloomin’ Brands (BLMN)

Business: Bloomin’ Brands owns and operates casual, upscale casual and fine dining restaurants in the United States and internationally. Its restaurant portfolio includes Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar. The company’s sales are broken down by Outback (65% of sales), Carrabba’s (15% of sales), and Fleming’s and Bonefish (the remaining 20% of sales).
Stock Market Value: $2.35B ($26.98 per share)

Activist: Starboard Value

Percentage Ownership: 9.6%
Average Cost: $25.80
Activist Commentary: Starboard is a very successful activist investor and has extensive experience helping companies focus on operational efficiency and margin improvement. Starboard has made 112 prior 13D filings and has an average return of 27.16% versus 11.98% for the S&P 500 over the same period. Of these filings, 19 have been on companies in the consumer discretionary sector, where Starboard has an average return of 28.11% versus 11.83% for the S&P 500 over the same period. However, two of their most successful engagements in recent years were at Papa John’s International (376.8% return versus 47.34% for the S&P 500) and Darden Restaurants (63.3% return versus 13.6% for the S&P 500).

What’s happening?

Starboard took a 9.6% position in BLMN for investment purposes. Earlier this month, Starboard entered into an advisor agreement with David C. George, a retired restaurant executive who served in various roles at Darden for nearly 17 years, with respect to the firm’s investment in BLMN. Starboard noted that it decided to retain him as an advisor in connection with this investment, following discussions with him and in view of his unique skill set, broad restaurant industry experience and extensive restaurant industry knowledge.

Behind the scenes

Bloomin’ Brands is one of the largest casual dining companies in the world and has been on Starboard’s radar since the firm invested in direct competitor Darden Restaurants back in 2013. At that time, Bloomin’ was outperforming Darden and trading at a premium multiple, but the circumstances have since flipped with Bloomin’ trading in the 5-6x earnings before interest, taxes, depreciation and amortization range. Meanwhile, Darden and Texas Roadhouse are trading at double-digit multiples.

Despite having great brands, Bloomin’ has lost the confidence of the market and fallen behind on various operational metrics, but its main problem is lagging same store sales and issues generating traffic due to somewhat of an identity crisis in how it operates the Outback restaurants. Traditionally, Outback had been a family-friendly steakhouse, but recently the company has tried to pivot to a “bar and grill” model with bigger menus and more affordable items – trying to become all things to all people. Not only is that much more operationally complex, but it has them operating in the lower price and more competitive bar and grill space. This has driven away many of their original, longstanding customers, in comparison to LongHorn Steakhouse and Texas Roadhouse, which have stayed true to what they are.
The primary opportunity here is to improve operations, mainly from a top line level but also by cutting costs. This can largely be accomplished by restoring Outback to its former family-friendly steakhouse glory and shifting away from the more complex and competitive “bar and grill” model. If there is anyone with the experience to do this, it is Starboard’s Jeff Smith, who led significant shareholder value creation at both Darden and Papa John’s. Getting Starboard involved with fresh eyes on the board would also go a long way toward restoring management’s lost credibility in the market.
There are also very compelling strategic opportunities to create shareholder value. Bloomin’ would get more value in selling some of its undervalued assets, such as Fleming’s, its upscale steakhouse business. There has been a lot of M&A in the high-end steakhouse space: Ruth’s Chris was recently acquired by Darden for 10x EBITDA; Del Frisco’s was acquired for 11-12x EBITDA; and Fogo De Chao was bought in a private transaction for a reported $1.1 billion. At similar EBITDA multiples, Fleming’s could go for $500 million. But a better opportunity might be their hidden gem in the 150 Outback restaurants in Brazil. These are all company-owned with a strong management team and are among the most popular restaurants in the country with 2- to 3-hour wait times. Selling these restaurants at a 10x EBITDA multiple could garner an additional $750 million, or they could franchise them for less money but an ongoing royalty.
In the United States, only 157 of the company’s 1,157 restaurants are franchised. Bloomin’ has been trying to grow by adding company-owned restaurants, which is capital intensive and operationally complex. There is an opportunity to increase the percentage of franchised restaurants by adding through franchising or converting company-owned restaurants to franchises. This is not only capital accretive to the company but results in a more stable and predictable level of cash flow that generally gets a higher multiple in the marketplace. Additionally, the company could use the cash it generates to return capital to shareholders. 
This is not unfamiliar territory for Bloomin’ or Starboard. In 2020, Jana Partners engaged with Bloomin’ and was successful in getting two directors appointed to the board: John P. Gainor, Jr. and Lawrence V. Jackson. While Jana no longer owns shares of Bloomin’ and likely does not regularly talk to these two about about the company, as directors appointed by an activist with a similar value-creating agenda, it would not be surprising if they were somewhat like-minded to Starboard’s agenda. As for Starboard, the firm has had extensive success at both Papa John’s and Darden, but in strikingly different ways. Papa John’s was a very amicable engagement in which Starboard was invited onto the board and worked with management to create extensive shareholder value. The firm did the same at Darden, but that took a long, contentious proxy fight for them to ultimately replace the entire board and the CEO. These two situations show Starboard’s breadth and abilities as an activist. Knowing the firm, it would much prefer to go the amicable path like Papa John’s, but it will take the Darden path if forced to. If management is smart, they will view Darden as a warning, and Papa John’s as the opportunity.
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. Bloomin’ Brands is owned in the fund. More

An overnight locksmith can cost up to $400 depending on the time, lock type, service and trip fees.
Sixty-three percent of employees are unable to cover a $500 emergency expense, SecureSave found.

Bluecinema

Picture this: You come home after a long day. As you approach your front door, you reach for your keys — but don’t feel them in your pocket.
You quickly realize you’re locked out of your home. Luckily, on-call locksmiths are available to help.

However, an emergency visit like this can cost as much as $400, depending on your location and the time, lock type, service and trip fees, according to This Old House, a home improvement information and advice platform. (The average cost nationwide is $150, the platform found.)
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Unfortunately, more than half — or 63% — of American workers are unable to cover a $500 emergency expense, found SecureSave, a provider of financial technology that helps employers offer emergency savings benefits. And only 48% of respondents to a May poll of 1,000 U.S. adults by Bankrate say they have enough emergency savings to cover at least three months’ worth of expenses.
Due to this lack of emergency savings, people are more likely to finance an unforeseen expense on credit cards or dip into retirement savings accounts.In fact, the share of 401(k) plan participants who made a hardship withdrawal reached an all-time high in 2022, Vanguard found.

Furthermore, 32% of adults could not have covered an emergency $400 expense completely with cash in 2021, according to the Federal Reserve. Their most common approach, instead, was to put the emergency expense on a credit card and pay it over time.”It’s certainly common now, and a lot of people sometimes feel like they don’t know where to start,” said financial advisor Winnie Sun, co-founder and managing director of Irvine, California-based Sun Group Wealth Partners and a member of the CNBC FA Council.

Here are other common emergency calls with their average costs:

1. Car trouble

A tow truck recovers the vehicle driven by golfer Tiger Woods in Rancho Palos Verdes, California, on Feb. 23, 2021, after a rollover accident.
Frederic J. Brown | AFP | Getty Images

Locksmiths can also help if you left your car keys inside your vehicle. However, service costs, again, depend on the distance a locksmith travels, time of day, and the type of lock and effort needed.
On average, unlocking the door can run from $70 up to $150 nationwide, while rekeying the car door can balloon to as much as $600, J.D. Power found.
Meanwhile, if your car breaks down or you get into an accident, you may need to call a tow truck.The average cost of getting your car towed is $109, according to J.D. Power. Yet, several factors impact the price, such as your location and how far you need to go; you could pay up to $600 to go as far as 100 miles.

2. Medical emergencies

Marje Cannon | E+ | Getty Images

Serious health-related events — like a critical illness, infection or accident — may mean you need to either dial an emergency number or run to the nearest hospital ER or urgent-care facility.The chances of first responders taking you to a medical center where physicians who are covered by your exact health insurance provider work are low to none.
On average, urgent-care visits cost up to $200, while hospital emergency room visits can cost as much $1,300, according to American Family Care.

3. Household repairs

JGI/Tom Grill | Tetra images | Getty Images

Last year, homeowners spent an average of $1,953 on home emergency spending, according to home services website Angi. Emergency spending had the largest increase in 2021 due to natural disasters in Texas, California and New York; 40% of respondents were impacted by extreme weather events, Angi found.
Some of the most common emergency household repairs including fixing bursting, freezing or leaking pipes; leaks from the roof; overflowing toilets; gas leaks; electrical hazards; termite or mice infestations; and mold growth, according to home management platform Thumbtack.

Consider alternate financial safety nets

“Everybody should try to have an emergency fund set aside,” said certified financial planner Carolyn McClanahan, founder of Life Planning Partners in Jacksonville, Florida, and also a CNBC FA Council member. “If they don’t have an emergency fund set aside, it’s important to know where to get cash if you need it.”To better protect yourself from incurring such high emergency costs, consider these alternate financial safety nets:1. Use credit cards wisely: You really need to see credit cards as a last resort, said Sun. If you do use your credit card, make sure you prioritize paying off the balance in full by the end of the month, she added. Otherwise, high-level interest rates can inflate the amount owed quickly. “Use your credit card as a 30-day bridge, but commit to paying that off,” she said.2. Set up a home equity line of credit: A home equity line of credit, or HELOC, is a loan secured by your house’s equity. It can work as an emergency line of credit, as well, said Sun. Applying for a HELOC is similar to taking out a mortgage for a house, added McClanahan.
“You can open a HELOC and not use it until a disaster happens,” she said.
HELOCs interest rates are generally lower than credit card interest rates. McClanahan noted.
“Depending on the bank, your interest rate can be from 8% to 10%, versus 20% to 30% on a credit card,” she said.
However, they tend to be variable interest rates, so you don’t want to use it if you don’t have to, McClanahan said.

This makes it harder for to “budget from month to month,” said Seth Bellas, a branch manager with Churchill Mortgage, earlier this year.
However, don’t wait until you have an emergency to apply for a HELOC, said McClanahan; the key is to have it open before you need it and pay it off as fast as possible, she added. Give yourself two to three months to set it up, added Sun.
3. Look into roadside assistance coverage: For a flat monthly or annual fee, roadside assistance plans can help if you’re locked out of your car, need it towed or have to have it pulled out of mud, sand or snow.
But first check with your auto insurance provider, advised McClanahan. And, review your policy to make sure what’s included in your coverage, according to Sun.
Roadside assistance plans from car insurance companies are usually the cheapest option, WalletHub has found. However, it’s usually added to an existing policy or only available when a policy has collision and comprehensive coverage.
4. Avoid surprises by planning ahead: Whatever the emergency, it pays to have planned ahead.
“If you have an old car and it has lots of miles, you always have to be prepared when the car breaks down,” McClanahan said.
Put money away in a car fund the same way you set money aside in an emergency fund.The key is to remember that you’re investing in yourself when you put money away, whether for short-term emergencies or long-term goals, she added.
As for that locked front door, a good way to avoid a big locksmith bill in the first place is put a spare set of your keys in a lockbox outside your home or in the hands of a trusted friend, said McClanahan. More

Homeowners are sitting on nearly $30 trillion of home equity, just shy of the peak in 2022. 
Here are the best ways to tap your home for cash.

Many Americans are house-rich, at least on paper.
Thanks to skyrocketing housing prices, homeowners are now sitting on nearly $30 trillion in home equity, according to the St. Louis Federal Reserve — just shy of the 2022 peak.

That’s roughly $200,000 cash per homeowner in equity that can be tapped, which is the amount most lenders will allow you to take out while still leaving 20% equity in the home as a cushion.

How to tap your home for cash

Up until last year, taking cash out by refinancing was a popular way to access the equity you’ve accumulated in your home. With mortgage rates currently over 7%, that’s suddenly a lot less appealing.
Even with high rates of home equity, borrowers are more likely to take out a second loan to pull cash out, rather than lose their low rate through a cash-out refi.
Otherwise, a home equity line of credit, also known as a HELOC, lets you borrow money against a portion of your home’s equity. Instead of taking out a home loan at a fixed amount, a HELOC is a revolving line of credit, but with better rates than a credit card, that you can use when you want to, or just have on hand.
More from Personal Finance:Homeowners say roughly 5% rate is tipping point for them to moveMore unmarried couples are buying homes togetherSome costly financial surprises for first-time homebuyers

Last year, originations of home equity loans and HELOCs increased 50% compared with two years earlier, according to the Mortgage Bankers Association, or MBA.
“Given the nearly $30 trillion of accumulated equity in real estate, there is untapped potential for home equity lending for lenders and borrowers,” said Marina Walsh, MBA’s vice president of industry analysis.

Factor in the terms, rates and risks

When it comes to borrowing against your home, the terms can vary greatly, according to a LendingTree report that analyzed more than 580,000 home equity loan offers across the country. 
The average home equity loan amount offered to homeowners is $104,102, LendingTree found. Homes in Iowa had the most favorable terms with an average interest rate of 9.88% — two percentage points higher than the average rate of 7.88% offered in Maryland, the lowest in the nation.
Still, at less than 10%, rates are significantly lower than what it costs to borrow on credit cards, which charge roughly 20%, on average.

However, “it’s not that easy to withdraw money from your home,” said Zillow’s senior economist, Nicole Bachaud. “Not everybody is going to qualify for getting an extra loan.”
Fewer banks offered this option during the height of the Covid pandemic, when lenders tightened their standards to reduce their risk. Access to HELOCs has improved, although the most preferable terms still go to borrowers with higher credit scores and lower debt-to-income ratios.
“Though a home equity loan can be a good way to pay for big expenses, like major renovations, or to consolidate high-interest debt, getting one isn’t without drawback,” added Jacob Channel, LendingTree’s senior economist.

“Not only can qualifying for a home equity loan be more challenging than qualifying for other types of debt, defaulting on a home equity loan can have serious negative consequences,” Channel said. In some extreme instances, defaulting on a home equity loan can mean that you’ll lose your house, he noted.
Even now, “borrowers shouldn’t rush out to get a home equity loan until they fully understand all of the risks associated with them,” Channel cautioned.
Keep in mind that different lenders will also offer different terms and interest rates, Bachaud added. She recommended talking to several mortgage companies or loan officers, as well as weighing all the costs before deciding what makes the most sense.
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