Have Americans Learned Their Lesson With Credit Cards?

The Great Recession drastically impacted personal finances of many households. During the credit meltdown, family budgets were reduced and deleveraging became a top priority. The recession technically ended in the summer of 2009, but Americans are still showing some financial restraint as they continue to slow their addiction to credit cards.

Consumers are not returning to their plastic-charging ways as fast as originally thought. In the third-quarter, Americans added $11.9 billion of credit card debt, down 30 percent from the $16.9 billion increase in the prior quarter, according to the latest report from CardHub.com. Compared to the third-quarter of 2012, the net amount of credit card debt added was down 8 percent.

In six out of the past seven quarters, consumer credit card debt figures have improved relative to the year before. Furthermore, the 3.19 percent credit card charge-off rate is at its lowest point since the first quarter of 2006. Other than that single quarter, there are now fewer charge-offs than at any point since the beginning of 1995. However, the total debt load has continued to increase and the average household owes more than they did in the prior quarter.

“It’s encouraging to see demonstrable improvement in the economic landscape after all that we’ve endured in recent years,” said CardHub CEO Odysseas Papadimitriou, a credit card industry veteran. “More jobs mean fewer families struggling to pay the bills, less uncollectible debt on bank balance sheets, and light at the end of the economic tunnel. Now, we just need to shift our mindset away from accruing debt at a slower pace and toward paying down what we owe as well as developing sustainable habits moving forward.”

As the chart below shows, the average household owes $6,690 to credit cards, up from $6,658 in the second quarter. Looking ahead, CardHub.com estimates that Americans will add $33.4 billion in credit card debt for 2013, revised lower from their $41.2 billion estimate made earlier this year.

5 Types of Businesses That Are Copying the Uber Model

If we’ve learned anything about successful business models in the wake of Uber’s exploding market share, it’s that convenience is king. Despite an onslaught of bad press and the growing pains of creating a company valued between $40-50 billion in just six years, Uber is without a doubt making its mark. On the heels of its great success, other entrepreneurs are lining up to see if they can create their own version of on-demand service that cuts out middle men and makes errand running as simple as opening an app on your smartphone.

By creating the mold for the concierge service industry, Uber has now become synonymous with the idea of at-your-doorstep convenience for completing a multitude of household tasks and daily chores. If you don’t want to walk your dog or finish the list of jobs you have for that day, there’s surely an app that can help you get it finished — or there’s one in the works in the depths of Silicon Valley.

Uber maintains it’s not a car service, it’s a technology company that happens to use its platform to provide people with instant access to a taxi alternative in the cities in which it operates. Whether that’s a company vision plan or just a way to get around transportation regulations in countries like India remains to be seen, but regardless, we’re now at the point where other startups are aiming to be the “Uber of X,” where “X” is any other delivery, concierge, or general errand service.

These types of services fit well into tech hubs like Silicon Valley, where “disruptive innovation” (that upends old systems with new technology) is paramount, The Guardian notes. The quest for disruptive innovation replaced manual labor with the cotton gin, substituted letters with email, and now is likely to completely change the ways people with smartphones — and a penchant for convenience — complete numerous tasks in their daily lives. Here are five industries that are already starting to see an onslaught of apps to help people in their daily lives. They’re not always cheaper than the standard method, but they often save time or at least make life a little simpler. Now, it’s an individual question of whether that’s worth it.

1. Laundry

Just as parents sometimes sign their college children up for wash ‘n’ fold services that pick up laundry and return it clean and folded, there’s now numerous apps that ensure you never have to touch a dirty sock again for all of adulthood, if you wish.

FlyCleaners, which operates right now in Brooklyn and Manhattan, will have someone pick up the laundry right from your doorstep, and return it to you within less than 24 hours. (If pickups happen before 11 a.m., it’s ready by 7 a.m. the next day.) Pickup and delivery happens from 6 a.m. until midnight daily, seven days a week. The company also offers dry cleaning services. According to estimated pricing from Manhattan ZIP codes, laundry will cost about $1.25 per pound of clothing, with individual pricing on special items like pressed shirts ($2.50 each) and dress or suit cleaning ($12 each). The company also allows you to customize how you’d like your laundry finished, down to the amount of starch or if you’d like to use bleach for an extra cost.

Washio, perhaps a larger name in the industry because it operates in six major cities (Chicago, Boston, Los Angeles, Oakland, San Francisco, and Washington, D.C.), also offers “on demand” services and delivers laundered clothing within 24 hours of pickup, right from your door. Wash and fold services (mostly for t-shirts or jeans) is about $1.39 per pound, with varying prices for blouses ($4.99), dresses ($8.75), coats ($12.99) and more. Minimum orders are $20, with a surcharge of $3.99 for orders less than $35.

This is one of the cases when convenience will have to be more important than cost, as Geoffrey A. Fowler, who tested several concierge apps for the Wall Street Journal, noted. “Washio charged me $1.60 per pound of laundry plus a delivery fee; I could have done it for a little less by bringing the hamper to a wash and fold, or a lot less by doing it myself,” he wrote. Despite the price it seems to be catching on, as TechCrunch reported in February the company has raised more than $13 million in funding.

2. Shipping

For individuals and businesses alike, shipping is one of the great logistical headaches. Now, apps are starting to creep up that eliminate your trips to the post office or nearby FedEx, UPS, or DHL site. Shipster is one of them, and basically requires people to take a picture of the item they’d like to send (from a card to a desk chair, and more), and their address plus that of the destination. A ‘Shipster’ arrives at your doorstep and takes the item, packaging it and sending it on its way to anywhere around the world. The app is live in Brooklyn and Manhattan with apparent plans to expand soon, though CEO Christian Vizcaino didn’t mention where in his interview with AlleyWatch in September 2014.

Another similar app is Shyp, which operates in New York City, San Francisco, Miami, and is in beta testing in Los Angeles. Fowler, of the Journal, said that the service picked up a package and shipped it for a fee of $5, for a total cost of about $48 for the shipment. The company negotiates bulk rates with carriers like UPS and FedEx, and the total was about what Fowler would have paid if he had gone to a shipping center and packaged it himself, he said. Both services are rated highly in Apple’s App store at 4.5 stars, though Shyp has had much more user feedback (a total of almost 250 reviews compared to Shipster’s 37).

3. Valet services

Finding a decent parking spot can be a pain in any city, a problem if you’d like to maintain the freedom of having your own car. Of all the apps Fowler used over the course of a week, the GPS-powered valet service Luxe was his favorite. The company operates in San Francisco, Los Angeles, and Chicago, and has plans to expand to Seattle and Boston. The service works much like a normal valet, with a few added perks. You let the company know via its app where you’re going to be. A valet picks up your car (and will even wash it or fuel it up for you, if you’d like), and then can return it to any spot within its service area — even if it wasn’t originally where you dropped off the car.

Fowler called the company a “marvel” of logistics, as the app tracks where you’re going so the attendant meets you at your destination at exactly the right time. (Fowler added that each of the attendants are fully vetted, trained, and insured.) The service for the entire day cost Fowler just $15 plus $3 in tip money, much less than the $35 he would normally pay for parking in his own building. That’s largely because the company negotiates better rates with underused parking garages around the city, Fowler explained. The only downside to this, he said, was that the company closes by 6 p.m. on Sundays — other days it’s open until 11 p.m. or midnight.

4. Health

True to the plot lines of Royal Pains, the idea of concierge medicine is one that immediately evokes images of living in the Hamptons with too much money to bother waiting in an overcrowded waiting room to see a doctor. The cost alone to get personalized care from a doctor used to put the idea of concierge medicine out of reach for most people. But with the rise of some medical apps, that’s not the case as much anymore. One Medical Group has an app that allows people to make doctor’s appointments and request prescription refills at the touch of a button, while also gaining email access to your doctor. One Medical operates in San Francisco, New York City, Washington, D.C., Boston, Chicago, Los Angeles, and Phoenix, and works with most insurance providers. The San Francisco Business Times reports that the annual fee to use the service in the Bay Area is $149, and is an employee benefit offered to those working for Twitter, Airbnb, Pinterest, Adobe, and more.

Another app that is reinstating doctors’ house calls is Heal, which is operating in Los Angeles and San Francisco. The company claims it will have a well-trained doctor to your doorstep in less than an hour from placing a request on the app, with a flat $99 fee per visit. The staff vary in their specialties from pediatric medicine to cardiology — the doctor that arrived on Fowler’s doorstep during his weeklong app tests studied at Stanford. The fee truly is $99, Fowler attested, and didn’t accept his insurance. It might not be Hamptons level, but there’s still definitely a cost for the convenience.

5. Meal preparation

Nothing gives you a range of possible apps to use quite like the food and meal preparation industry. AmazonFresh and others deliver foodstuffs to your door, sometimes without a delivery fee if orders reach a certain value. Instacart, which operates in about 15 national locations including San

Francisco, Philadelphia, Boston, and Chicago, is gaining lots of attention not only for its to-your-door convenience, but also for the quality of foods (especially produce) shoppers select for clients. “Our service is available to anyone who can afford our $3.99 delivery fee,” Apoorva Mehta, CEO of Instacart, told the San Francisco Business Times. The service shops at a variety of stores including Costco, Safeway, and Whole Foods, they reported, and tried to match in-store product prices, though there’s sometimes a mark-up on items like gallons of milk. The company has raised $220 million at a $2 billion valuation, the publication reported in January.

But for those who want more than the raw ingredients delivered to their doorstep, there’s a growing number of apps that will deliver hot meals for your dinner. Munchery operates in San Francisco, New York, and Seattle, and offers custom dishes from on-staff chefs including peppercorn crusted steak ($11.95 per plate), vegetarian pasta with mushrooms, peppers, and fresh pesto ($8.95), and gremolata baked salmon ($11.50). The company also contributes to local food banks for every meal purchased. Delivery is free for every meal with a $39 annual charge, the Business Times reports. Munchery is one of dozens now in the meal delivery game — others also in contention are Postmates, SpoonRocket, Caviar, and Blue Apron.

Black Friday’s Record Online Sales

The new challenge facing brick-and-mortar shops this holiday season seems to be the increasing presence of e-commerce in consumer’s daily lives. Retailers like Macy’s(NYSE:M), Target (NYSE:TGT), Wal-Mart (NYSE:WMT), and Best Buy (NYSE:BBY) made plans early this season to stave off competitors such as Amazon.com (NASDAQ:AMZN) and other e-retailers, which, unlike brick-and-mortar stores, have one distinct advantage: their doors never close.

Last year, online sales accounted for a full 40 percent of the $59 billion in sales amassed over the Black Friday weekend in 2012, and those numbers, paired with lethargic store traffic in the brick-and-mortar sphere mean that the pressure is on to lure customers into the shops. The pressures aren’t set to go away, either, with a recent Nielson survey estimating that just over 50 percent of shoppers are planning on buying something over the internet this year, a statistic up more than 10 percent from last year, compared to just 48 percent of consumers who said they were planning on visiting a “big box” store during this year’s biggest holiday shopping weekend.

As a result, Macy’s opened on Thanksgiving this year for the first time ever, and other chain retailers have begun offering Black Friday deals earlier in the day Thursday, or utilizing tactics to get customers through the door, such as keeping deals hidden until consumers set foot in store, and only unveiled at a specific time, a strategy employed by Best Buy this year. This strategy aims to prevent other retailers from matching or beating their prices, in addition to luring customers in store. Other retailers put more of their deals on the web, so as to better compete with online retail giants.

However, despite their best efforts to keep up with e-commerce Goliath Amazon.com, online sales of brick-and-mortar companies Target and Wal-Mart still only account for about 2 percent of overall sales. Both Target and Wal-Mart are planning on investing more heavily in technology over building new locations, and this year, Target made nearly all of its Black Friday discounts available online as well as in-person, a change from previous years.

On the flipside, Amazon.com has developed its own strategies for beating out its old-school competition. In the past, the company offered discounts in the days leading up to Black Friday, and this year it added new deals every 10 minutes in order to more effectively keep customers attention. With the Black Friday weekend wrapping up,Disney (NYSE:DIS) Retail’s vice president, Paul Gainer, is reporting in-line brick-and-mortar sales, but higher-than-expected online sales, a trend that seems reflected in the aforementioned investments in online technology on the part of stores like Target.

The bottom line seems to be that online retail is flourishing, and brick-and-mortar companies will need to effectively address the growing trend towards online sales if they hope to profit in the wake of e-commerce gurus like Amazon andeBay (NASDAQ:EBAY).

Americans Will Spend More Money on Christmas This Year

The holidays are a time of togetherness, a time to celebrate one’s faith, and a time to forget about all of the day-to-day stresses, just for a little while. But with all of the planning, shopping, and spending, a peaceful and calm holiday season can quickly turn chaotic, especially when most people worry about overspending.

Gallup recently conducted a survey on holiday spending, with the results showing that an overwhelming 91% of Americans plan to shop for Christmas presents during this holiday season, while only 9% say they won’t be shopping. Overall, consumers plan on spending an average of $720; $790, if you don’t include those who plan on spending $0.

Our planned spending for this year’s holiday season represents an increase compared to this time last year, when in November 2013, we estimated we’d spend $704 on Christmas shopping. Given these estimates, we should come out spending between 2.2% and 3.5% more than last year.

How much are people planning to spend?

Here’a a breakdown of how much consumers plan to spend on Christmas shopping:

Graphic: Erika Rawes | Data source: Gallup

Forty-six percent of consumers plan on spending at least $500, with 25% of people planning to spend in excess of $1,000. Only around one in four people plan on spending less that $250, and a handful of people (5%) are going to stay under a $100 limit.

Plans change

Over the past several years, Gallup has asked consumers how much they intend on spending on holiday shopping during both the month of October and the month of November. In six out of the last eight years that Gallup reported results for both October and November, consumers lowered their estimates in November.

Graphic: Erika Rawes | Data source: Gallup

As you may notice in the chart above, consumers planned on spending $781 on Christmas shopping in October. But now that it’s November and the shopping season is actually approaching, people are being a bit more realistic about how much they can afford.

In 2008, consumers lowered their estimates by nearly $200 between October and November. As people organize their budgets and get ready to shop, they may come to terms with the logistical ramifications associated with spending so much on holiday shopping, and in turn, reduce their planned spending.

What else impacts holiday spending?

In addition to changes in individual consumer budgets, economic factors come into play, as well. During 2008 and 2009, when economic concerns were high for the whole country, consumers got “cold-feet syndrome” (as Gallup calls it) during November and reduced their planned spending dramatically. Inclement weather may also impact consumers’ desires to weather the storm of other shoppers who are out there battling for those door-buster deals.

All in all, most consumers will buy as much as they are comfortable buying, and that depends on each individual household. How much do you plan to spend this holiday season?

Avoid these 6 dumb retirement savings mistakes

Back when many American workers could count on company-run pension plans, preparing for retirement was something of a no-brainer. Now that many of us are calling the shots when it comes to saving and investing for retirement, things seem a lot more complicated.
Not surprisingly, many of us will make mistakes when it comes to preparing for retirement and managing money during retirement, particularly because greater longevity presents a challenge in terms of making savings last.
Click ahead for a few common traps to avoid.

1. Waiting too long to start saving and/or saving too little

Some 36 percent of workers who participated in a 2014 survey by the Employee Benefit Research Institute reported that they had less than $1,000 in savings and investments.
As a rule of thumb, we'll need about 80 percent of our pre-retirement income during retirement. The average person will get about 40 percent of his or her "replacement income" from Social Security retirement benefits, said Joseph Goldberg, director of retirement plan services for Buckingham Asset Management.
Talking about the need to save is one thing, but doing it can be hard, particularly when you are just getting started in your career and you figure that time is on your side. Of course, that's exactly when you should begin to save, Goldberg said.
Theoretically, the sooner you start to save, the less you'll have to save, as a percentage of your yearly salary, over the course of your career. By jump-starting your savings in your 20s, you'll likely benefit from decades of market gains.

2. Halting or reducing savings during bear markets

It can be unnerving to watch a sizable portfolio drop in value by more than the amount you are contributing to it each month. Many people who find themselves in that situation believe they are "throwing money out the window," Goldberg said.
As a result, they stop saving "when what they should be doing is increasing their savings because stocks are on sale," he added. When stock prices are low, explained Goldberg, expected returns are at their highest level.

3. Putting too much emphasis on average life expectancy

It is common for people to use average life-expectancy figures to determine how long their money will need to last in retirement. But if you happen to be lucky (or unlucky) enough to live longer than average, you risk running out of money.
Planning for a longer-than-average retirement, say five to 10 years longer than your average life expectancy, can help you mitigate the risk of outliving your assets.
"By definition, life expectancy tells you only when, out of a large group of people, half will have already died," said David Mendels, a certified financial planner and director of planning at Creative Financial Concepts. "You have no way of knowing which group you will be in."

4. Retiring too early

Many people are tempted to retire in their early 60s, but doing that can put considerable strain on a retirement portfolio, particularly for those who live into their 90s. By working a little longer, either at your current full-time job or at a part-time job during retirement, you can put off tapping your nest egg, giving your portfolio more time to compound, or draw down your savings more slowly.
A part-time job during retirement, which may include consulting work or some other type of self-employment, can provide a source of funding for big-ticket items, such as travel.
Whether you retire later in life or work part-time during retirement, "anything you are not spending stays in your portfolio, not just for future use but also compounding into something more," said J. Christopher Boyd, a CFP and chief investment officer at Asset Management Resources. 

5. Failing to spend prudently during retirement

The so-called 4 percent rule is a guideline that many people, advisors included, use to determine how much an investor can safely withdraw from a broadly diversified portfolio in order to make it last three decades. The 4 percent withdrawal rate is typically adjusted for inflation in order to provide a cost-of-living increase.
But there is considerable controversy over whether this long-held belief makes sense, particularly with interest rates still at historical lows. Some experts say the rule is downright dumb because it doesn't take into account realized—in other words, actual—market returns.
"What you want is a rule that responds to realized market returns," said Anthony Webb, a senior research economist at the Center for Retirement Research at Boston College. "If the market does well, you spend more and vice versa."
Advisors say one of the biggest mistakes retirees make is not curtailing their spending during bear markets in retirement or spending too freely during bull markets. "The concept of accumulating wealth strategically is very common, but I don't think people give much thought to the concept of distributing their wealth strategically," said Goldberg of Buckingham.

6. Providing too much help to grown children

Boyd, who works largely with retirees, says many retirees help their grown children financially. Some cosign mortgages or loan their children money to start a business. But such generosity can come back to bite retirees in the long run, according to Boyd at Asset Management Resources.
"Parents want to help their kids and think they have sufficient resources, but if they live long lives, it can come back to hurt them," said Boyd, adding that parents who loan money shouldn't count on being repaid.
"If you are lending money to your kids, consider it a gift and don't expect to get repaid. It is also important to consider whether you have enough money to give to be fair to multiple kids," he said. 

The Case for Corporate Partnerships with Academia

JAY HOOLEY: Coping with the relentless pace of technological change is challenging organizations more than ever. One way companies can keep up with advances in technology and data science is by creating partnerships with academia.

Universities are expanding their computer-science and data-management curricula, with new majors popping up in data science, information security, applied analytics and more. With a rigor for problem solving and innovative thinking, academia can provide an outside-in view of the challenges businesses are working to solve. Tapping into this knowledge base offers immense benefits for companies looking to identify practical applications for technology.

From the student perspective, businesses can contribute real-world problems that don’t come with clear instructions or boundaries. Students learn that formulating a problem correctly is sometimes tougher than developing the mechanics of a solution.

The tangible benefits of these partnerships for businesses include increased access to the limited pool of highly skilled talent. The search for talent presents companies across industries with an increasingly tough hurdle. By creating partnerships with academic institutions, businesses can place themselves in front of the next generation of technology workers. By working with faculty and students across different fields of study, companies expand awareness of their business and skill requirements–and help students build the right capabilities to meet those needs.

Companies also gain valuable perspectives from beyond their organization or industry–perspectives that help them question existing assumptions and explore new solutions.

Innovation, by definition, requires creative thinking. Working with the academic community provides fresh perspectives that help push companies to explore solutions to difficult problems they might not discover on their own. That’s a great way to unlock new potential that can speed technological innovation.

Why Investors Need a Technology Scorecard for Companies

BRUCE NOLOP: “We are now a technology company” is often proclaimed by CEOs in a variety of industries, with the implication that their companies deserve higher valuations from the investment community.

However, being characterized as a technology company is becoming less the exception and more the rule; it’s hard to think of any industries or companies whose fortunes are not indelibly interwoven with technology. Therefore, rather than classifying some companies as technology-driven and others not, we should assume that virtually every company is profoundly affected by technology–for better or worse–and to assess whether its technology capabilities and strategies are a net plus or a net minus.

To that end, a technology scorecard could be instructive for investors, who would benefit from an objective, knowledgeable analysis of a company’s technological strengths and weaknesses–akin to the scorecards that are currently being used to evaluate companies’ corporate citizenship and sustainability programs.

The scorecards should incorporate a broad definition of technology and focus qualitatively, as well as quantitatively, on the opportunities and risks from an investor’s perspective—emphasizing high level assessments rather than detailed operational metrics.

Here are five categories of questions that might be included:

1. Investments: How much is the company investing in technologies that improve its infrastructure, create new products, enhance the customer experience, expand the customer base, lower labor costs, or increase production? To what extent does the company rely on its in-house technology organization versus outsourcing or the cloud?

2. Competition: How do the company’s technology strategies compare with its peer group? Does it obtain sustainable competitive advantages from existing or projected technologies? Is the company vulnerable to disruptive technologies and does the management team have the mind-set and capabilities to adapt its strategies– including a willingness to cannibalize its current business model?

3. Information: Is the company employing data mining and other analytics to tailor its marketing strategies? Does it have the systems and skill sets to compile and communicate valuable management information throughout the company? Does it possess sophisticated processes for managing its supply chain and vendors on a global basis?

4. Track Record: Does the company have a history of successfully implementing new technologies – such as adding software systems, introducing enhanced products, retrofitting production facilities, or altering go-to-market strategies? Is its corporate culture conducive to adaptation and continuous change? Has the company experienced material write-offs of technology assets?

5. Security: Does the company have adequate safeguards to protect its sensitive and proprietary information, especially against cyberthreats? Does it encrypt all personally identifiable information? Has the company been victim to a material data breach? Does it have robust contingency plans for potential incidents?

By systematically answering these types of questions, technology scorecards from a credible third party could serve as helpful building blocks for investors–much as credit ratings provide snapshots of a company’s financial strength. Moreover, they could further incentivize companies to adopt best practices and execute long-term technology plans.

The Wrong Lesson Companies Learn From Silicon Valley

MARK MURO: Too often, companies—and places—think the great lesson of Silicon Valley is to pile onto the consumer Internet. And it’s true, as venture capitalist Marc Andreessen says, that “software is eating the world.” Given the ascendancy of Google GOOGL +0.36% and Facebook, it’s no wonder companies tend to distill the point of Silicon Valley down to the power of Internet-information offerings.

And yet, it’s a mistake. The true point of Silicon Valley is instead about convergence—about the emergence of a new interdependency of software and hardware, bytes and atoms. Software has been entangled with hardware since the beginning; all along, technology has been an onrushing tango of software built on top of and around a hardware platform comprised of ever faster, smaller, and cheaper microprocessors embedded in devices. And so the crucial lesson of Silicon Valley is not about the centrality of consumer-Internet services but about the power of deep, synergistic and interdisciplinary industrial know-how–the kind responsible for Google’s driverless car, the Apple universe of devices and services, and the extraordinary hybrid experiment of Tesla Motors.

I call this convergence economy the advanced industry sector in a recent Brookings Institution report, and not surprisingly, Silicon Valley epitomizes it, with 30% of all of its jobs residing in one of the 50 designated research and development- and STEM-worker intensive advanced industries. But here again it’s clear that the true Silicon Valley formula is not software alone but a balanced, diverse interaction of software and hardware pursuits. Today, in fact, manufacturing industries employ nearly half (46%) of Silicon Valley advanced workers. For that matter, the semiconductor manufacturing and computer equipment making industries are significantly larger than the web search/Internet publishing and software products industries.

And so I would say that the key takeaway from Silicon Valley is not the rule of the consumer Internet but the advantage to be gained of putting it all together in an inimitable way—software and hardware, online services and cool devices.

This is the American edge.

Avoiding the Pitfalls of the Internet of Me

More Personal Customer Interactions Raise the Stakes for Companies

The Internet of Me is here. From search results tailored to individuals to wearable technology that tracks users' every move, an increasingly personalized Internet presents the opportunity to build brand loyalty and deepen customer satisfaction.

In the Internet of Me era, companies that are not constantly gathering data to gain intelligence will not only miss out on additional ways to connect with their customers, but also on new revenue opportunities.

This new paradigm also brings new challenges. Outlined below are three common pitfalls and recommendations for the steps companies can take to avoid them:

Missing Big Data opportunities
Experts predict that more than 30 billion devices will be wirelessly connected to the Internet by 2020.1 In the Internet of Me era, companies that are not constantly gathering and leveraging data will miss out not only on additional ways to connect with their customers, but ultimately on new revenue opportunities.

With ubiquitous data collection at this level, it's possible to build an entirely transparent and automatic service with a degree of personalization we've never experienced. Imagine the advantage of local businesses that are able to deliver on-demand products and services, like TaskRabbit, which makes on-demand scheduling for just about any request possible.2

Failing to meet increased expectations
Consumers expect their wired devices and related platforms to not only work together seamlessly, but to provide them with personalized services. At a minimum, they assume data stored on a wearable device will easily sync with a program stored on a laptop, and that coupons stored in a grocery chain's app will automatically be applied at the register.

Increasingly, they expect that they will receive personalized recommendations and offers based on their shopping behaviors. Companies that fail to deliver on these expectations will lose business. To counter that possibility, products must be designed and tested to ensure they work intuitively and in all circumstances, and must apply insights from data to deliver an individualized experience.

Losing customer trust
Customers share very personal information with the companies that serve them—everything from the places they visit to the time they go to sleep. As with any relationship, a deeper connection is possible only with trust.

As companies gather more data from users, they need to establish strict protocols to ensure that sensitive information won't fall into the wrong hands. These include maintaining back-end firewalls in products and in the cloud to keep all data secure, enabling privacy choices during product set up and offering options that allow consumers to balance personalized service with their need for privacy.3

Every new technological era presents both opportunities and risks, and the Internet of Me is no exception. The enterprises that thrive will be the ones that pursue the possibilities while staying mindful of the pitfalls.

What is the Difference Between ‘Rich’ and ‘Wealthy’?

Owning a big house and earning a six-figure salary doesn’t necessarily mean you have a secure financial future. What you might not know is there is a difference between being rich and being wealthy. So what’s the difference?

That’s exactly what The Cheat Sheet decided to ask The New York Times wealth columnist Paul Sullivan. According to Sullivan, it’s better to be wealthy. And it will take more than living within your means to get there. In his new book, The Thin Green Line: The Money Secrets of the Super Wealthy he explains why and offers tips for how you can turn your riches into wealth. Join us and learn more from our chat.

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The Cheat Sheet: What prompted you to write this book?

Paul Sullivan: In the spring of 2011, when the economy had started to improve but few regular people believed it, I met with some super-wealthy men who were part of a group called Tiger 21. It was an investment club for deca- and centa-millionaires, almost all of whom had made their money themselves. They had invited me to participate in their monthly meeting, where at each one a person presented every financial decision he and his family had made and the group critiqued them. I don’t have $10 million, but I figured I was well-prepared for something like this, given that I have written about money for the better part of two decades. I was wrong.

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CS: What were you wrong about?

PS: These men could have cared less about my relatively simple investments; they tore me apart for the way I thought about money more broadly. One thing they drilled into me was that the future would not resemble the present, and however it turned out, life was likely to be a lot more costly than it was today. These were guys who thought about when something would go wrong, not if. It’s a subtle but important distinction in our thinking about how we save, spend, invest and think about money. I left that meeting in a daze but a few days later I began thinking about this book.

CS: What is the main difference between being rich and being wealthy?

PS: Rich is a number, be it on a savings account, a brokerage statement or what Zillow tells us our house is worth. If it’s larger we can buy more things; if it’s smaller we can’t buy as much. Simple. Wealthy is more complicated. It is a sense of security no matter how much or how little you earn. It is what allows you to make choices in life, whether you’re a school teacher or a hedge fund manager.

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CS: What is the key to wealth?

PS: Being wealthy isn’t the same as earning a lot of money. Often those two do not align, which may shock some people who are just scraping by. The key to being wealthy is the choices and decisions we make every day coupled with the behaviors we have around money. And these behaviors are not confined to how we invest money; they radiate out to everything that money touches, from how much we pay for our home each month to how often we eat out to what or when we decide to spend on our children’s education or a charitable appeal.

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CS: What do you want readers to learn from this book?

PS: The visual of the thin green line in the title. Think about it as a stock chart over the past 50 years, starting out low and gradually rising, in fits and starts, to a much higher point. You want to be on top of that line, standing comfortably whether you’re near the bottom or at the peak.

In either place, your choices have to reflect your resources and your goals. You do not want to be on the other side of that line, hanging beneath, by your fingertips, or in free fall. That’s when choices will be made for you — many of which you won’t like. Keep that green line in mind no matter what financial decisions you’re making.