What the experts say
A 401(k) for sole proprietors
If you are your own boss and have no other employees, a little-known retirement-savings vehicle called an “individual” or “solo” 401(k) may be for you, said Jeff Brown in The Wall Street Journal. “Solo K’s, as some call them, allow participants to avoid the complex rules covering corporate 401(k)s” and offer sole proprietors the flexibility to “choose between making traditional tax-deductible contributions or after-tax Roth contributions,” which is why some advisers have begun recommending them over other options for people who work on their own, such as the SEP-IRA. But business owners should be aware that hiring just a single employee could force the plan “to meet a tricky nondiscrimination test” designed to “make sure executives don’t get a better deal than employees.” In that situation, it might make more sense to stick with the SEP-IRA.
Amazon’s confusing aisles
Amazon is a great place to shop if you know what you’re looking for, said Shira Ovide in Bloomberg.com, but it “can be clueless about guiding people who aren’t sure what they want.” I recently went clicking through Amazon’s beauty products section to look for foundation, a staple of any makeup line. It’s also a “notoriously tricky item to buy online or in stores because people must match the shade to their skin tone.” But I found Amazon’s search results to be comical: 200 pages of randomly organized products with no filter for powder vs. liquid or even for shade. “Amazon users can search for underwear by color but can’t apparently do the same for lipstick—a product defined by color.” This is all too emblematic of “one of Amazon’s greatest weaknesses.”
Getting better returns on cash
“It’s getting harder to generate a good return on your cash,” said Jacob Passy in MarketWatch.com. Rates for certificates of deposit (CDs) are “falling across the board for the first time in five years,” and annual percentage yields on most savings accounts have also been dropping. Blame the falling yields on Treasury bonds, which tend to dictate “the interest rates banks charge on loans and pay out on deposits and savings.” Now “could be an ideal time to lock in a strong interest rate on cash.” It might also be sensible to plant your money in an online bank, such as Ally or Marcus, where “savers are still coming out ahead.” Another option is the online investing firm Wealthfront, which has boosted its rates on FDIC-insured accounts to 2.57 percent.