Mike's Hard Lemonade: Measuring Digital That Drives Retail Sales

It’s refreshing when the head of marketing for a Consumer Packaged Goods (CPG) brand opens up and shares his insights on best practices around tracking and measuring the impact of digital marketing that drive in-store sales. For years, this has been a challenge as the ecosystem between retailers, data providers and manufacturers has been relatively immature.

This summer, I had the opportunity to speak with Sanjiv Gajiwala, VP of Marketing at Mike’s Hard Lemonade and I asked him about how he had effectively streamlined his company’s ability to directly measure the effectiveness of their digital marketing efforts. In addition to this article, you’re welcome to watch the full interview on YouTube.

Matching Facebook Ads to Credit Card Purchase Data

“We work with Oracle and their data provider, Datalogix which actually looks at our Facebook ads and the users that are exposed to those Facebook ads and connects that back to their credit card and purchase behavior,” says Gajiwala. “Datalogix has a way of matching users to their actual purchasing and what we’ve really been able to learn from that has been incredible.”

Gajiwala explains that Datalogix fits within Mike’s Hard Lemonade’s social listening ecosystem. “We’re looking at brand health and what people are saying, but it helps us complete the picture with their purchase behavior,” he says.

Key Learning From This Purchase Behavior Data Layer

“We’ve learned some really incredible things,” says Gajiwala, “People who are exposed to our [Facebook] ads that are Mike’s users are spending 5% more. And 84% of people exposed to Facebook ads on Mike’s definitely would or are very interested in purchase Mike’s after seeing the ad or our content we’re promoting. You start to see that both of these numbers start to synch up, which helps validate what we’re seeing in the soft data versus through the register data.”

Digging in a bit further, Gajiwala acknowledges that this work with Datalogix does not allow Mike’s Hard Lemonade to segment by individual retail store since the data provided is driven by credit card purchases. “Instead of looking at [individual] retailers, we are able to look at the segments of our consumers between heavy, medium and light users and understand what kind of content and what kind of behaviors we can expect from that different type of consumer.”

Breaking Down Geographical Relevance

As Mike’s Hard Lemonade is sold nationally, I asked Gajiwala about how they review the geographical relevance of the sales data driven by their digital marketing efforts. “Datalogix and Oracle are doing the mashination including geographic and penetration data,” he said, with the understanding that some of these insights are a combination of Facebook geographic data and credit card transactional data.

This gives Mike’s Hard Lemonade an additional layer of insights that help with better understanding purchase habits by consumer segmentation (i.e. heavy to light) overlaid with geographical penetration insights to help with better understanding geographical flavor profile preferences and where marketing budgets are best spent on a local geographical level.

Insights Leading to Incremental Investments in Social Strategy

“Through this work we uncovered that there were a whole group of people that, profile-wise, were like our Mike’s heavy users that we weren’t reaching,” Gajiwala said. “They were heavy [Flavored Malt Beverage] users, but they weren’t really engaging with Mike’s. That lead to an incremental investment in our social strategy.”

This allowed Mike’s Hard Lemonade to then track back to see if they are getting the same sort of lift from this new target of previously ignored heavy non-Mike’s users and determine if the incremental investment is performing in a similar fashion to their core marketing investments.

“Our prospecting and our farming strategies are both different on social but just as measurable,” Gajiwala said. That is to say, with a relatively small team, everyone at Mike’s Hard Lemonade is accountable to the data.

What Gets Measured, Gets Managed

The bottom line here is that with the addition of the Datalogix reporting, Mike’s Hard Lemonade is finding new opportunities that it had previously ignored while, at the same time, seeing the direct impact on retail sales from its digital marketing efforts. This is the growing trend at retail. With a growing number of options to track and measure marketing impact, your ability to interpret data gives you a competitive edge. The most effective content and social media ads will receive increased and even incremental budget to ensure brand health and continued sales growth at retail.

For more on this topic, see these two related articles: What It Takes to Exceed Shopper Expectations and Empower Retail Employees and Not All Retailers are Contracting. Here’s the Secret From One That’s expanding.

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According to the SpaceX Co-Founder, This Is Why Elon Musk Is Wildly Successful

With businesses that focus on clean energy, electric, self-driving cars and launching into outer space, Elon Musk is on the innovation scoreboard in a big way, and often leading it. But according to a Quora response from his SpaceX co-founder, Jim Cantrell, it’s not just intelligence that’s propelled Musk to where he is.

To be clear, Cantrell isn’t saying that Musk lacks in the brain department (I think we all know that). In fact, he acknowledges that Musk is highly intelligent. He’s simply saying that other factors do Musk more good and that intelligence isn’t always a prerequisite for success.

So what are those factors for success, specifically?

1. Do something you’re good at or have an inherent talent for.

Musk has many different talents–he speaks with conviction, responds fabulously to his customers, and has a knack for pulling together the resources he needs, for example. But his biggest gift, arguably, is his ability to see the genius in what other people would write off, to identify which moonshots are actually worth pursuing. And after he’s identified great moonshots, he’s able to convince others they’re doable.

2. Do something that creates value (and that you can sell now or later).

Although Musk’s cutting-edge electric cars and groundbreaking initiatives solar initiatives are geared toward those who care about the Earth, they’re highly marketable overall, appealing to the need for both travel and energy. Even space travel entices with novelty. In time, it might become a necessity, too.

3. Raw, Pure Passion.

Elon Musk doesn’t spend his days churning out complex math formulas or training with NASA. But he genuinely believes that space exploration and making humanity “a multi-planetary species” is essential to our long-term survival. In the same way, he believes that the fossil fuel industry is a danger and that electric cars and solar are legitimate paths to saving the environment. His sincere concerns drive him to keep innovating on each platform, even when others have doubts.

But what’s really made Musk successful, Cantrell says, is sheer determination. He just doesn’t give up. So dig your heels in. Don’t quit. Even if you ‘fail’, the amount of experience you gain is priceless, including what you learn about yourself. And when you’re learning, improvement is inevitable.

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This Time It Matters: Why Apple Is Falling

Preface
Apple Inc (NASDAQ:AAPL) is dropping hard after its event to announce the new series of hardware, in particular the new iPhone 8, 8 Plus and X as well as the Apple Watch 3.

It’s Different This Time
Normally when Apple stock dives on lukewarm product reviews we stand firmly in our position that the stock market reaction is over blown. Our simple thesis for that response is to look at demand, which is hypnotically strong, every time. That is not the case this time.

A New Risk is Not Obvious But is Enormous
Apple announced a more complicated lineup of iPhones this time around. It introduced the iPhone 8 series which is an upgrade to the iPhone 7, and then it announced the highly anticipated iPhone X (pronounced iPhone Ten).

Then the company made the iPhone 8 available this month, but pushed delivery of iPhone X to early November, which pre-orders stating in late October. That has created a risk.

It turns out that Apple hyped the iPhone X so much, and poured so much new technology into it, that it has left the demand for iPhone 8 lackluster in Apple terms. Here’s what we mean.

If you go to the Apple Store, and try to purchase an iPhone 8, the wait time is essentially 1-3 days for the smaller memory version. Here is an image:

That is for the iPhone 8, in Los Angeles, on Verizon’s (NYSE:VZ) network. The other networks are essentially the same. A normal wait time for a new iPhone release is usually several weeks, let’s say 2-4 depending on where you are in the world.

There are also reports that in store lines are much smaller than before, with one report pinpointing Sydney Australia, where only 30 people were camped out for the new release. Reports from China are similar.

Here are links to two stories:

Turnout for iPhone 8 Launch in Australia “Bleak” as Customers Hold Out for Upcoming iPhone X
The iPhone 8 launch in Sydney saw “a bleak turnout,” reports Reuters, with fewer than 30 people lining up outside of the Sydney Apple Store on George Street. In past years, hundreds of people have lined up for new iPhones on release day.

Apple Falls After Analyst Report Indicates Weak iPhone 8 Demand
Consumers pre-ordered about 1.5 million handsets on Chinese retail website JD.com in the first three days, compared with about 3.5 million for the comparable period of iPhone 7 orders.

Tim Cook just said he “couldn’t be happier” with the iPhone release (and Apple Watch 3). While sales are lower than prior models, there is one reason, a big reason, that he may actually be telling the truth.

Is There a Plan?
One of the headlines that surfaced from the Apple Event was that the iPhone X was very expensive, starting at $ 999 and climbing to $ 1,200 based on the configuration.

It’s possible, maybe even likely, that Apple decided to release the iPhone 8 for less to make it appear that it was not forcing Apple loyalists to buy a far more expensive phone by offering a reduced priced new model (iPhone 8).

In fact, it does appear that even in the bearish analyst notes, each tends to comment on the fact that demand reduction for the iPhone 8 is simply a reflection of the outsized demand for the iPhone X.

If that’s true, then Apple will have an average selling price significantly higher than in prior times, and if demand is in fact to the point where Apple also sells more units, then that would bring a windfall of profits larger than any company has ever seen in one quarter. If that sound overly bullish, it’s just the choice of words — Apple already has the largest earnings ever in one quarter, so this would be a breaking of its own record — also known more simply as, “growth.”

Back to Risk
While there is a rather bullish narrative to wrap around this odd iPhone selection, there is also, in earnest this time, a reasonable bearish thesis.

Apple won’t be delivering its iPhone X until well into November, and if demand is very strong, it might not even be able to deliver before the holiday season in the United States. And while, certainly, if all of those sales simply occur later in the year (or early 2018), then that’s fine, but to consider that a foregone conclusion is a step we are not willing to take with blind faith.

Some consumers, perhaps many consumers, will not wait. And while Apple loyalists may stick around for a later date, the all-important “Android switchers” (those smartphone Android owners that switch to Apple) may not — and that is a real risk and worthy of a stock drop, until proven otherwise.

Apple’s market share in the United States is jumping as Android loses market share — an under reported but critical phenomenon. On January 11th, 2017, 9TO5Mac wrote iPhone market share grows 6.4% in USA, takes share from Android in most markets.

Apple gained 9.1% in the UK, mostly at the expense of Windows phones.

The iPhone grew its market share in Australia, France, Italy, Japan, Spain, the UK and USA, with Android seeing its own share drop in all of these countries bar Italy, where its growth was less than half that of iOS.

Those are Android switchers and Apple may have just put that group, or at least that trend, in serious jeopardy.

Now What?
We believe the iPhone X is going to be a knock-down drag-out mega hit, and the elevated price will make it yet an even larger success. But, the risk that Apple took, as of right now, is hurting the company both with iPhone 8 sales, and potentially, with Android switchers. And that is not a false narrative — it is accurate.

That risk means the stock should drop, and is dropping.

But, we’re not done yet. What we did not show you, and is easily missed unless you are really looking, is how hard Apple is focusing consumers on the iPhone X over the iPhone 8 — in our opinion.

I recorded a 45 second video arriving on the Apple Store and looking at iPhones. I have turned to video to allow you to make your own decision, as opposed to snapshots, which are too selective and an be used to weave any narrative the author likes.

When you watch this video (below), decide for yourself if you feel that Apple is purposefully pointing people to the iPhone X over the iPhone 8. Here we go:

[embedded content]

That’s hardly headline grabbing footage, but we found it noteworthy.

Apple Watch 3
There have been some pretty poor reviews of the Apple Watch 3 surrounding its LTE connectivity and its battery life. This is one of those times where the reviews are meaningless. Demand is strong and that’s all that matters.

Here is a snapshot from the Apple Store for that product:

We see the Watch becoming a runaway success as people learn to use that wearable device as a standalone product — leaving the phone at home on runs, meetings, swims, hikes, and whatever other times such a convenience could be desired.

Conclusion
We maintain our Top Pick status on Apple, but have certainly tempered our bullishness with an undeniable new risk. It might work out very well, but, it might not, and that is a new risk to Apple stock.

The author is long shares of Apple Inc (NASDAQ:AAPL).

Thanks for reading, friends.

Please read the legal disclaimers below and as always, remember, we are not making a recommendation or soliciting a sale or purchase of any security ever. We are not licensed to do so, and we wouldn’t do it even if we were. We’re sharing my opinions, and provide you the power to be knowledgeable to make your own decisions.

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The Company specifically disclaims any liability, whether based in contract, tort, strict liability or otherwise, for any direct, indirect, incidental, consequential, or special damages arising out of or in any way connected with access to or use of the site, even if we have been advised of the possibility of such damages, including liability in connection with mistakes or omissions in, or delays in transmission of, information to or from the user, interruptions in telecommunications connections to the site or viruses.

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Disclosure: I am/we are long AAPL.

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Wal-Mart tests direct-to-fridge; Amazon ups restaurant game

(Reuters) – Wal-Mart Stores Inc is testing a service to stock groceries directly to customers’ refrigerators as it seeks to take on e-commerce giant Amazon.com.

The delivery of groceries and meal kits is emerging as the next frontier of competition among retailers.

The world’s biggest brick-and-mortar retailer said on Friday it is partnering with August Home, a provider of smart locks and home accessories, to test the service with certain customers in the Silicon Valley. (bit.ly/2ffqqvT)

The grocery business is set to be upended through Amazon’s acquisition of upmarket grocer Whole Foods last month and the online retailer is also entrenching itself more deeply in the restaurants business.

Amazon Restaurants on Friday teamed up with online food ordering company Olo whose network of restaurants includes Applebee’s and Chipotle.

A Wal-Mart Stores Inc company distribution center in Bentonville, Arkansas June 6, 2013. REUTERS/Rick Wilking

The partnership will help Olo’s restaurant customers connect with Amazon’s delivery services.

The competition in the meal-kits business is also heating up. Supermarket operator Albertsons Cos Inc said it would buy meal-kit delivery service Plated while rival Kroger-owned Ralphs started selling meal kits in stores this week.

ONE-TIME PASSCODE DELIVERY

As part of the test, Wal-Mart delivery persons gain access to a customer’s house using a pre-authorized one-time passcode and put away groceries in the fridge and other items in the foyer.

Homeowners would receive notifications when the delivery is in progress and could also watch the real-time process from their home security cameras through the August Home app.

The Bentonville, Arkansas-based retailer has been exploring new methods of delivery and in June said it was testing using its own store employees to deliver packages ordered online.

Reporting by Vibhuti Sharma and Sruthi Ramakrishnan in Bengaluru; Editing by Martina D’Couto

Our Standards:The Thomson Reuters Trust Principles.

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The SEC Hack Shows That Not Even Top Government Data Is Safe

A major computer hack at America’s top stock market regulator is the latest sign that data stored in the highest reaches of the U.S. government remains vulnerable to cyber attacks, despite efforts across multiple presidencies to limit high-profile breaches that are so frequent many consider them routine.

In recent years, nation-state and criminal hackers, as well as rogue employees, have stolen data from the Internal Revenue Service, the State Department and intelligence agencies, including millions of government employee files allegedly exfiltrated by the Chinese military, U.S. officials say.

The Sec urities and Exchange Commission ( SEC ), America’s chief stock market regulator, said on Wednesday that cyber criminals may have used data stolen last year to make money in the stock market, making it the latest federal agency to grab headlines for losing control of its data.

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JAPAN-US-IT-FINANCE-BITCOIN -COMPUTERS-HACKING-SERVICES-BANKING

At the same time, being only the latest major breach is not special, said Dan Guido, chief executive of Trail of Bits, which does cyber sec urity consulting for the U.S. government.

“It simply reflects the status quo of our digital sec urity,” said Guido, who is a former member of the cyber sec urity team at the Federal Reserve, America’s central bank.

Central bank officials have detected dozens of cases of cyber breaches, including several in 2012 that were described internally as “espionage.”

The U.S. federal government has sharply increased funding dedicated to protecting its own digital systems over the last several years, attempting to counter what is widely viewed as a worsening national sec urity liability.

But as one of the world’s largest collectors of sensitive information, America’s federal government is a major target for hackers from both the private sec tor and foreign governments.

“When you have one central repository for all this information – man, that’s a target,” said Republican Representative Bill Huizenga, chairman of the House subcommittee on Capital Markets, Sec urities, and Investment, which oversees the SEC .

Last year, U.S. federal, state and local government agencies ranked in last place in cyber sec urity when compared against 17 major private industries, including transportation, retail and healthcare, according to benchmarking firm Sec urityScorecard.

An update of the rankings in August showed the U.S. government had improved to third worst, ahead of only telecommunications and education.

“We also must recognize – in both the public and private sec tors, including the SEC – that there will be intrusions, and that a key component of cyber risk management is resilience and recovery,” said SEC Chairman Jay Clayton.

The federal government audits cyber sec urity measures every year at top agencies, producing reports that routinely expose shortfalls and sometimes major breaches. The Federal Bureau of Investigation also looks for hacking attempts and helped spot an alleged intrusion by Chinese military-backed hackers into a major banking regulator between 2010 and 2013.

Weekly scans of government systems by the Department of Homeland Sec urity showed in January that the SEC had critical cyber sec urity weaknesses but that vulnerabilities were worse at three agencies, including the Environmental Protection Agency, the Department of Health and Human Services and the General Services Administration.

Some agencies said they had improved their cyber sec urity posture since that report.

For more about cybersecurity, see Fortune’s video:

A GSA spokeswoman said the agency has not had any critical vulnerabilities in the past six months, and that the ones identified in January were patched in under 10 days.

A Department of Labor spokesman said all identified vulnerabilities had been fixed and that its systems were not compromised by the identified flaws.

But, he added, “addressing vulnerabilities associated with legacy systems can be challenging.”

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National Bank of Canada faces website glitch: Bloomberg

(Reuters) – A glitch in National Bank of Canada’s website may have exposed personal information of about 400 customers, Bloomberg reported, citing an email statement from the bank.

Some people filling out an electronic form on the bank’s website could have seen data provided by a previous customer, according to Bloomberg.

The cause was human error in setting up the form, Bloomberg reported, adding that the bank was offering free credit monitoring to customers who may have been affected.

The bank was not immediately available for comment.

Reporting by Ahmed Farhatha in Bengaluru; Editing by Anil D’Silva

Our Standards:The Thomson Reuters Trust Principles.

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Distrustful U.S. allies force spy agency to back down in encryption row

SAN FRANCISCO (Reuters) – An international group of cryptography experts has forced the U.S. National Security Agency to back down over two data encryption techniques it wanted set as global industry standards, reflecting deep mistrust among close U.S. allies.

In interviews and emails seen by Reuters, academic and industry experts from countries including Germany, Japan and Israel worried that the U.S. electronic spy agency was pushing the new techniques not because they were good encryption tools, but because it knew how to break them.

The NSA has now agreed to drop all but the most powerful versions of the techniques – those least likely to be vulnerable to hacks – to address the concerns.

The dispute, which has played out in a series of closed-door meetings around the world over the past three years and has not been previously reported, turns on whether the International Organization of Standards should approve two NSA data encryption techniques, known as Simon and Speck.

The U.S. delegation to the ISO on encryption issues includes a handful of NSA officials, though it is controlled by an American standards body, the American National Standards Institute (ANSI).

The presence of the NSA officials and former NSA contractor Edward Snowden’s revelations about the agency’s penetration of global electronic systems have made a number of delegates suspicious of the U.S. delegation’s motives, according to interviews with a dozen current and former delegates.

A number of them voiced their distrust in emails to one another, seen by Reuters, and in written comments that are part of the process. The suspicions stem largely from internal NSA documents disclosed by Snowden that showed the agency had previously plotted to manipulate standards and promote technology it could penetrate. Budget documents, for example, sought funding to “insert vulnerabilities into commercial encryption systems.”

More than a dozen of the experts involved in the approval process for Simon and Speck feared that if the NSA was able to crack the encryption techniques, it would gain a “back door” into coded transmissions, according to the interviews and emails and other documents seen by Reuters.

“I don’t trust the designers,” Israeli delegate Orr Dunkelman, a computer science professor at the University of Haifa, told Reuters, citing Snowden’s papers. “There are quite a lot of people in NSA who think their job is to subvert standards. My job is to secure standards.”

The NSA, which does not confirm the authenticity of any Snowden documents, told Reuters it developed the new encryption tools to protect sensitive U.S. government computer and communications equipment without requiring a lot of computer processing power.

NSA officials said via email they want commercial technology companies that sell to the government to use the techniques, and that is more likely to happen when they have been designated a global standard by the ISO.

Asked if it could beat Simon and Speck encryption, the NSA officials said: “We firmly believe they are secure.”

THE CASE OF THE DUAL ELLIPTIC CURVE

ISO, an independent organization with delegations from 162 member countries, sets standards on everything from medical packaging to road signs. Its working groups can spend years picking best practices and technologies for an ISO seal of approval.

As the fight over Simon and Speck played out, the ISO twice voted to delay the multi-stage process of approving them.

In oral and written comments, opponents cited the lack of peer-reviewed publication by the creators, the absence of industry adoption or a clear need for the new ciphers, and the partial success of academics in showing their weaknesses.

Some ISO delegates said much of their skepticism stemmed from the 2000s, when NSA experts invented a component for encryption called Dual Elliptic Curve and got it adopted as a global standard.

ISO’s approval of Dual EC was considered a success inside the agency, according to documents passed by Snowden to the founders of the online news site The Intercept, which made them available to Reuters. The documents said the agency guided the Dual EC proposal through four ISO meetings until it emerged as a standard.

In 2007, mathematicians in private industry showed that Dual EC could hide a back door, theoretically enabling the NSA to eavesdrop without detection. After the Snowden leaks, Reuters reported that the U.S. government had paid security company RSA $ 10 million to include Dual EC in a software development kit that was used by programmers around the world.

The ISO and other standards groups subsequently retracted their endorsements of Dual EC. The NSA declined to discuss it.

In the case of Simon and Speck, the NSA says the formulas are needed for defensive purposes. But the official who led the now-disbanded NSA division responsible for defense, known as the Information Assurance Directorate, said his unit did not develop Simon and Speck.

“There are probably some legitimate questions around whether these ciphers are actually needed,” said Curtis Dukes, who retired earlier this year. Similar encryption techniques already exist, and the need for new ones is theoretical, he said.

ANSI, the body that leads the U.S. delegation to the ISO, said it had simply forwarded the NSA proposals to the organization and had not endorsed them.

FROM JAIPUR TO HAMILTON

When the United States first introduced Simon and Speck as a proposed ISO standard in 2014, experts from several countries expressed reservations, said Shin’ichiro Matsuo, the head of the Japanese encryption delegation.

Some delegates had no objection. Chris Mitchell, a member of the British delegation, said he supported Simon and Speck, noting that “no one has succeeded in breaking the algorithms.” He acknowledged, though, that after the Dual EC revelations, “trust, particularly for U.S. government participants in standardization, is now non-existent.”

At a meeting in Jaipur, India, in October 2015, NSA officials in the American delegation pushed back against critics, questioning their expertise, witnesses said.

A German delegate at the Jaipur talks, Christian Wenzel-Benner, subsequently sent an email seeking support from dozens of cryptographers. He wrote that all seven German experts were “very concerned” about Simon and Speck.

“How can we expect companies and citizens to use security algorithms from ISO standards if those algorithms come from a source that has compromised security-related ISO standards just a few years ago?” Wenzel-Benner asked.

Such views helped delay Simon and Speck again, delegates said. But the Americans kept pushing, and at an October 2016 meeting in Abu Dhabi, a majority of individual delegates approved the techniques, moving them up to a country-by-country vote.

There, the proposal fell one vote short of the required two-thirds majority.

Finally, at a March 2017 meeting in Hamilton, New Zealand, the Americans distributed a 22-page explanation of its design and a summary of attempts to break them – the sort of paper that formed part of what delegates had been seeking since 2014.

Simon and Speck, aimed respectively at hardware and software, each have robust versions and more “lightweight” variants. The Americans agreed in Hamilton to compromise and dropped the most lightweight versions.

Opponents saw that as a major if partial victory, and it paved the way to compromise. In another nation-by-nation poll last month, the sturdiest versions advanced to the final stage of the approval process, again by a single vote, with Japan, Germany and Israel remaining opposed. A final vote takes place in February.

Reporting by Joseph Menn; Editing by Jonathan Weber and Ross Colvin

Our Standards:The Thomson Reuters Trust Principles.

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Apple Watch Series 3 Has a Connection Problem

Apple Watch Series 3’s major new feature may not work as well as promised.

The tech giant has acknowledged a problem with its Apple Watch Series 3 that causes it to try to connect to unknown Wi-Fi networks instead of a cellular network, creating a potential security problems, according to The Verge, which confirmed the problem with Apple and experienced the flaw in a unit it tested.

Apple said the flaw would be fixed in a future software update, Apple told The Verge in a statement. It’s unclear when that update would be available.

The biggest new feature in the Apple Watch Series 3, unveiled last week, is the ability to connect to wireless carrier networks when the user is away from an iPhone so they can place and receive calls directly from the device. Cellular connections can also be used to use apps when the Watch is untethered from an iPhone.

However, The Verge found that when the Apple Watch Series 3 isn’t connected to an iPhone, it sometimes tries to access Wi-Fi networks instead of defaulting to the carrier network. Other reviewers discovered the same problem, prompting Apple on Wednesday to issue its statement and promise to fix it in the future.

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“We are investigating a fix for a future software release,” the Apple statement says.

The problem could be a big one for users. Cellular connectivity is a major selling point for the Apple Watch Series 3’s, and if that doesn’t work as promised, users could avoid buying the device when it goes on sale Friday.

Apple(aapl) did not immediately respond to a Fortune request for comment about the flaw or when it plans to release its fix.

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At U.N., Britain to push internet firms to remove extremist content quicker

UNITED NATIONS (Reuters) – The leaders of Britain, France and Italy will push social media companies on Wednesday to remove “terrorist content” from the internet within one to two hours of it appearing because they say that is the period when most material is spread.

British Prime Minister Theresa May, French President Emmanuel Macron and Italian Prime Minister Paolo Gentiloni will raise the issue at an event on the sidelines of the annual gathering of world leaders at the United Nations.

Internet companies including Facebook Inc, Microsoft Corp Alphabet Inc’s Google said they will attend the meeting.

Google will be represented by general counsel Kent Walker, who will also speak on behalf of a recently formed industry group called the Global Internet Forum to Counter Terrorism.

Facebook is sending Monika Bickert, head of global policy management, who is expected to make remarks reiterating the companies’ commitment to combating online extremism.

Microsoft is sending Dave Heiner, a senior policy advisor.

The European Union has threatened legislation if internet companies do not step up efforts to police what is available on the web.

The British U.N. mission said May will welcome progress, but urge companies to go “further and faster” to stop groups like Islamic State spreading material that promotes extremism or shows how to make bombs or attack pedestrians with vehicles.

“Terrorist groups are aware that links to their propaganda are being removed more quickly, and are placing a greater emphasis on disseminating content at speed in order to stay ahead,” May plans to tell the event.

“Industry needs to go further and faster in automating the detection and removal of terrorist content online, and developing technological solutions which prevent it being uploaded in the first place,” she will say.

Responding to pressure from governments in Europe and the United States after a spate of militant attacks, key firms created the Global Internet Forum to Counter Terrorism in June to share technical solutions for removing extremist content and work more with counter-terrorism experts.

Twitter said it had removed 299,649 accounts in the first half of this year for the “promotion of terrorism”, a 20 percent decline from the previous six months, although it gave no reason for the drop. Three-quarters of those accounts were suspended before posting their first tweet.

May said ahead of Wednesday’s event: “We need a fundamental shift in the scale and nature of our response – both from industry and governments – if we are to match the evolving nature of terrorists’ use of the internet.”

Reporting by Michelle Nichols; Additional reporting by Paresh Dave and Joseph Menn in San Francisco; Editing by Paul Tait

Our Standards:The Thomson Reuters Trust Principles.

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Tesla shares fall from record high after warning from analyst

SAN FRANCISCO (Reuters) – Shares of Tesla (TSLA.O) fell from record highs on Tuesday after an analyst warned that the electric car maker may take longer than expected to become profitable.

Jefferies analyst Philippe Houchois launched coverage of Tesla with an “underperform” rating, helping send shares of the company headed by entrepreneur billionaire Elon Musk down 2.17 percent to $ 376.74 after closing at a record high the day before.

“Achievements to-date and vision are impressive, but we don’t think Tesla’s vertically integrated business model can be scaled up as profitably and quickly as consensus thinks and valuation multiples imply,” Houchois warned in a research note.

Houchois’ $ 280 price target was well below the median analyst price target of $ 337.50, according to Thomson Reuters data.

Musk is counting on the recently launched Model 3, Tesla’s least pricey car, to make the Palo Alto, California company profitable and establish it as the leading electric carmaker ahead of BMW (BMWG.DE), General Motors (GM.N) and other long-established players.

Wall Street’s confidence in Musk has sent Tesla’s stock up 83 percent over the past year to record highs.

Skeptics believe Tesla’s aggressive production targets are unrealistic, that Musk is burning through cash too quickly and that the company’s electric cars will be overtaken by larger automakers.

Eight analysts recommend buying Tesla’s stock, while another eight recommend selling, and eight others have neutral ratings, according to Thomson Reuters data. That makes Tesla one of the 10 most poorly-rated stocks in the Nasdaq 100 index.

Reporting by Noel Randewich; editing by Diane Craft

Our Standards:The Thomson Reuters Trust Principles.

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Is A.I. Just Marketing Hype?

Early today, Slate pointed out that breakthrough technologies always seem to be “five to 10 years away,” citing numerous tech forecasts (energy sources, transportation, medical/body-related technologies, etc.) containing that exact phrase.

The also included some quotes predicting breakthroughs in “Robots/A.I.” in “five to 10 years,” but the earliest was from 2006 and rest were from the past two years. The lack of older quotes is probably because with A.I., the big breakthrough–the “singularity” that approximates human intelligence–has a fuzzier threshold.

Here’s are some highlight in the history of A.I. predictions:

  • 1950: Alan Turing predicts a computer will emulate human intelligence (it will be impossible to tell whether you’re texting with a human or a computer) “by the end of the century.”
  • 1970: Life Magazine quotes several distinguished computer scientists saying that “we will have a machine with the general intelligence of a human being” within three to fifteen years.
  • 1983: The huge bestseller The Fifth Generation predicts that Japan will create intelligent machines within ten years.
  • 2002: MIT scientist Rodney Brooks predicts machines will have “emotions, desires, fears, loves, and pride” in 20 years.

Similarly, the futurist Ray Kurzweil has been predicting that the “singularity” will happen in 20 years for at least two decades. His current forecast is that it will happen by 2029. Or maybe 2045. (Apparently he made both predictions at the same conference.)

Meanwhile, we’ve got Elon Musk and Vladmir Putin warning about A.I. Armageddon and invasions of killer robots, and yet… have you noticed that when it comes to actual achievements in A.I., there seems to be far more hype than substance?

Perhaps this is because A.I.–as it exists today–is very old technology. The three techniques for implementing A.I. used today–rule-based machine learning, neural networks and pattern recognition–were invented decades ago.

While those techniques have been refined and “big data” added as a way to increase accuracy (as in predicting the next word you’ll type), the results aren’t particularly spectacular, because there have really been no breakthroughs.

For example, voice recognition is marginally more accurate than 20 years ago in identifying individual spoken words but still lacks any sense of context, which is why, when you’re dictating, inappropriate words always intrude. It’s also why the voice recognition inside voice mail systems is still limited to letters, numbers and a few simple words.

Apple’s SIRI is another example. While it’s cleverly programmed to seem to be interacting, it’s easily fooled and often inaccurate, as evidenced by the wealth of SIRI “fail” videos on YouTube.

Another area where A.I. is supposed to have made big advances is in strategy games. For years, humans consistently beat computers in the Chinese game of GO. No longer. And computers have long been able to defeat human chess champions.

However, while the ability to play a complex game effectively seems like intelligence, such programs are actually quite stupid. For example, here are three chess pieces:

The piece on the left is a Knight (obviously) and the piece in the middle is a Queen (again obviously). The piece on the right is called a “Zaraffa” and it’s used in a Turkish variation of chess. If you look at the Zaraffa carefully and you know how to play regular chess, you immediately know its legal moves.

Deep Blue–or any other chess program–could scan that photo for eternity and not “get” it; far less incorporate a “knight plus queen” way of moving into its gameplay. Game playing programs can’t make mental adjustments that any novice chess player would grasp in a second. They would need to be completely reprogrammed.

Similarly, self-driving cars are also frequently cited as a (potentially job-killing) triumph of A.I. However, the technologies they use–object avoidance, pattern recognition, various forms of radar, etc.–are again decades old.

What’s more, even the most ambitious production implementations of self-driving cars are likely to be limited to freeway driving, the most repetitive and predictable of all driving situations. (While it’s possible self-driving cars may eventually cause fewer accidents than human drivers, that’s because human drivers are so awful.)

The same thing is true of facial recognition. The facial recognition in Apple’s iPhone X is being touted in the press as a huge breakthrough; in fact, the basic technology has been around for decades; what’s new is miniaturizing it so it will fit on a phone.

But what about all those “algorithms” we keep hearing about? Aren’t those A.I.? Well, not really. The dictionary definition of algorithm is “a process or set of rules to be followed in calculations or other problem-solving operations.”

In other words, an algorithm is just a fancy name for the logic inside a computer program. It’s just a reflection of the intent of the programmer. Despite all the sturm-und-drang brouhaha about computers replacing humans, there’s not the slightest indication that any computer program has created, or ever will create, something original.

IBM’s Watson supercomputer is a case in point. Originally touted as an A.I. implementation that was superior to human doctors in diagnosing cancer and prescribing treatment, it’s since become clear that it does nothing of the kind. As STAT recently pointed out:

“Three years after IBM began selling Watson to recommend the best cancer treatments to doctors around the world, a STAT investigation has found that the supercomputer isn’t living up to the lofty expectations IBM created for it. It is still struggling with the basic step of learning about different forms of cancer.”

What’s more, some of Watson’s capabilities are of the “pay no attention to the man behind the curtain” variety. Again from STAT:

“At its heart, Watson for Oncology uses the cloud-based supercomputer to digest massive amounts of data — from doctor’s notes to medical studies to clinical guidelines. But its treatment recommendations are not based on its own insights from these data. Instead, they are based exclusively on training by human overseers, who laboriously feed Watson information about how patients with specific characteristics should be treated.”

Watson, like everything else under the A.I. rubric, doesn’t live up to the hype. But maybe that’s because the point of A.I. isn’t about breakthroughs. It’s about the hype.

Every ten years or so, pundits dust off the “A.I.” buzzword and try to convince the public that there’s something new and worthy of attention in the current implementation of these well-established technologies.

Marketers start attaching the buzzword to their projects to give them a patina of higher-than-thou tech. Indeed, I did so myself in the mid 1980s by positioning an automated text processing system I had built as “A.I.” because it used “rule-based programming.” Nobody objected. Quite the contrary; my paper on the subject was published by the Association for Computing Machinery (ACM).

The periodic return of the A.I. buzzword is always accompanied by bold predictions (like Musk’s killer robots and Kurzweil’s singularity) that never quite come to pass. Machines that can think forever remain “20 years in the future.” Meanwhile,, all we get is SIRI and a fancier version of cruise control. And a boatload of overwrought hand-wringing.

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Emmy Award Winners 2017: Hulu’s 'Handmaid's Tale' Win Heralds Television’s New 'Big Three'

Last year, when Jill Soloway accepted her Emmy Award for directing Transparent, she hoisted it in the air and hollered “topple the patriarchy!” At the time, she was talking about trans rights, civil rights, and the feminist movement, mostly on TV but globally, too. Twelve months later, The Handmaid’s Tale, a show where the patriarchy literally rules all and women’s only hope of survival is to topple it, won the Emmy for Outstanding Drama, becoming first series from a streaming service to do so.

The win didn’t just cement Hulu’s position alongside Netflix and Amazon as creative class leaders. Along with a strong overall showing by Netflix, it underscored that streaming’s Big Three now hold the same vaunted space that the major broadcast networks did for much of the 20th century.

For decades, TV was ruled by NBC, ABC, and CBS—the so-called Big Three—but in the last 15 years, their grip on the industry was loosened thanks to “prestige” shows from the likes of HBO, AMC, and Showtime. Those networks, and others like them, were able to move past TV’s traditional gatekeepers by making shows that didn’t have to be primetime-friendly (read: full of sex and gunplay and without laugh tracks) and didn’t even necessarily have to appease advertisers. Now, completely unencumbered by television scheduling and bolstered by huge Silicon Valley budgets, a new class of networks—led by Netflix, Amazon, and Hulu—is taking over.

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All told, streaming services—Netflix, Amazon, and Hulu—took home 32 Emmys this year during yesterday’s ceremony and the Creative Arts awards the weekend before. Granted, HBO by itself collected 29 awards, even without the help of Game of Thrones, but streaming services still drummed up more awards than the original Big Three networks (NBC, ABC, and CBS) garnered this time around: 26. It’s also more than the networks that helped launch Hulu—NBC, ABC, Fox—pulled in: 27. And the bulk of those wins came from pushing the kind of norms-toppling programming that helped TV-that’s-not-really-TV stand out in the first place.

During Sunday night’s ceremony, the Television Academy did a fair amount of self-congratulating for the industry’s diversity. And while it’s true that a lot of Emmys went to shows that feature women, people of color, and LGBTQ characters, those awards have been slow to come. When Donald Glover won last night for Outstanding Directing for a Comedy Series for Atlanta, he became the first black man to do so. When Master of None’s Lena Waithe won the award for best writing for a comedy series, she became the first black woman to do so (presumably the first queer black woman to do so as well). That’s not great, Bob. But the fact of the matter is, Emmys can only be given to shows that actually get made, and in the play-it-safe world of La La Land, it’s been streaming services that make the bolder, braver shows.

Take Netflix, for example. When that service initially got into making TV rather than re-packaging it, it did so with House of Cards and Orange Is the New Black, which used the story of a middle-class white lady’s time in prison as an opportunity to tell the stories of transwomen and women of color. (Creator Jenji Kohan literally called her protagonist a “Trojan horse.”) The awards followed. Soon after, Transparent made Amazon an awards contender, a show that, in Soloway’s words, finds its heroes in “unlikable Jewish folk, queer folk, trans folk.” And now here comes Hulu, which just planted its own Emmys flag thanks to a show that—its problematic relationship with race notwithstanding—focuses on the ways society can strip women of their agency. It even nabbed an Emmy for star Elisabeth Moss—something not even Mad Men could do.

The Emmys rewarded cable’s efforts as well. In her acceptance speech for Big Little Lies, HBO’s most-awarded show, Reese Witherspoon encouraged studios to “bring women to the front of their own stories.” It’s a good thing HBO did; otherwise it would’ve been sucking wind compared to its streaming network contemporaries.

It’s also worth noting that while Netflix nabbed a few Creative Arts Emmys for Stranger Things, the show got shut out during the telecast. It also only got one award last night for its expensive critical darling The Crown—for John Lithgow for best supporting actor in a drama series. Meanwhile, its big winners were Master of None, which won for Waithe’s excellent episode about a young woman coming out to her mother, and anthology series Black Mirror, which won two awards for “San Junipero”—an installment that used sci-fi tropes to tell a queer love story in an era that didn’t really have many of those (the 1980s, roughly). Amazon got shut out during Sunday night’s show, but considering Hulu picked up the slack and then some, it should be clear that, creatively, television is evolving to have a new Big Three—none of which are actually, you know, on TV in the traditional sense.

Streaming services have long supported diverse, ambitious, genre-breaking shows is kind of an old tale at this point. What’s astounding is that there are now three major players in this space. The easiest joke to make about TV in the last few years has been that there’s just too damn much of it to watch, but The Handmaid’s Tale‘s big night just proved there’s still room at the top for more. Hulu will obviously see this as a sign that they should do more original programming, audacious original programming. So will their contemporaries—online and off. At the end of last night’s ceremony, when Handmaid’s took home the big award, showrunner Bruce Miller ended his speech by telling the entire television industry that there were goals to accomplish, that there were a lot of tales that—because of suppression or perceived lack of interest—hadn’t been told, and it was time to find places to start telling them. “Go home and get to work,” he said. “We have a lot of things to fight for.”

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You Have 10 Years Left To Retire, How To Plan

Let’s say you have just turned 50, or you are already in early 50’s, and you plan to retire in about 10 years. It’s probably the high time to work out a plan and put it into practice. Thinking of retirement, the very first question that comes to mind is how much savings would be enough that could last comfortably for 30-40 years. The second question would be what will be my/our expenses in retirement. Both of these questions are inter-dependent and often are the most intriguing questions facing most people who are not yet retired but plan to retire not too distant in the future.

On the other hand, if you are still in your 40s, you may think it is too early to ask these questions. However, it never hurts to run some numbers and plan accordingly. Moreover, if you plan early, you will have more choices and time to adjust your plan.

Obviously, these questions are not very straightforward to answer. There are many variables that can differ from one person to another. The first question that you need to tackle is how much spending/expenses a year you will have in retirement. The answer to the other question with regard to the amount of savings will largely depend on our ability to answer the first question fairly accurately. In this article, we will try to address these questions and try to develop some estimates. We will also try to demonstrate how a modest level of savings can be grown to significant sums that can last for a long time.

We can use a hypothetical couple – John and Lisa – let’s assume they both are 50 years of age and want to retire in 10 years at 60 years of age. Their current savings are modest at $ 300,000 and mostly in 401K, and/or IRAs. Their current household gross income is $ 125,000 a year. They recognize that they need to do some serious planning and make some tough choices if they hope to have a comfortable retirement starting 10 years.

John and Lisa currently carry a mortgage on their house and have one child in college whom they are supporting. First, they make some bold decisions. They decide that they will make some extra payments each year on the mortgage and will be able to pay off the house by the time they retire. They decide that they will not carry any car loans or credit card debt into retirement. They also decide that they both will increase their current 401K contributions to 16% of their earnings until they retire. This will help boost their savings significantly.

Estimation of Expenses in Retirement:

Next task is to figure out how much their spending/expenses will be when they retire in 10 years. There are basically two ways to calculate spending. First one is to simply make a list and add the likely expenses in retirement; however, one is likely to underestimate or overestimate some expenses. The second method that we feel is more appropriate is to take the current income and subtract all the expenses that you will not incur in retirement. Also, add any expenses that you may have in retirement that you do not have currently; for example, there may be an increase in medical premiums/costs. Then, adjust this remaining amount for inflation for the number of years that are left prior to retirement. It basically means to figure out how much of the money currently goes into items that will no longer be needed. This method will ensure your current lifestyle into retirement years.

This is what they come up with:

  • They will not need to put the 16% savings contributions into their 401K or retirement funds any longer.
  • Their tax bracket would be much lower, so will need to account for that reduction.
  • They will not be putting any more money into Social Security/Medicare deductions, as they would not have any earned income.
  • Besides they will not have work-related expenses, like commuting, new clothing, dry-cleaning expenses, etc.
  • They should be done with kid’s college education which will cut down another $ 14,000 a year.
  • They will not have the house mortgage payments anymore (monthly mortgage $ 1,200 or $ 14,400 yearly).
  • They will not have the current medical premiums that get deducted from their paychecks, but instead, they will need to earmark higher medical premiums since they will not be eligible for Medicare until 65.

Total current gross earnings

Minus (-)

Current 401/IRA contributions

Social security/Medicare deductions

Taxes (federal and State)

Medical premium deductions

Any work-related expenses

Kid’s college expenses

Home Mortgage payments

Plus (+)

Extra costs or premium for Medical Insurance.

John and Lisa use a Google spreadsheet (prepared by Financially Free Investor, available here) to run the numbers and come to a conclusion that nearly 60% of their current income goes to expense-items that they will no longer have or need in retirement. That means they would only require 40% of their current income to support their existing lifestyle. Based on their current gross income of $ 125,000, it comes to $ 50,000 a year in today’s prices. However, due to inflation in the next 10 years (assuming at 2.5% a year), they will require $ 64,000 a year. In addition, they plan to earmark another $ 1,000 a month or $ 12,000 a year for medical premiums/costs. So, they figure out that they will need roughly $ 76,000 a year to be able to sustain their current living standards. They round it off to $ 75,000 a year.

40% of the current Income:

Inflation adjusted Amount (10 years later):

Plus Medical Premiums in retirement:

$ 50,000

$ 64,000

$ 12,000

Total:

$ 76,000 a year

(~=75,000 a year).

How Much Savings Are Needed?

John and Lisa decide that John would start taking his social security benefits at the earliest eligibility age of 62 years, but delay Lisa’s social security until she gets to 70 years of age. By doing this, they will be able to balance out the income needs along with compounding Lisa’s social security benefits to the highest payout possible.

John and Lisa also assume that they will withdraw up to 6% income from their investment capital at the time of retirement at age 60 until they get to the age 70. This is when they start withdrawing the second social security benefits. Now some folks will argue that 6% income is too high to withdraw. However, even if we think it is too high, in the worst case scenario, their portfolio may not grow as much they would like during their age from 60-70 years. After 70 years, when they have the second social security coming in, their withdrawal percentage will get reduced significantly.

By reverse calculation, this couple will require $ 1.25 million (75,000/0.06) in investment savings at the time of retirement. They only have $ 300,000 today. Without any more contributions, to grow this amount to 1.25 million in 10 years will require compounding this amount at a rate of 16% per annum, which is almost unachievable. But the good thing is that they are still working. They have already decided to increase their 401K pre-tax contributions to 16% of their income, and along with the employer’s matching, they will likely be able to achieve the target. Any further rise in their income would also be put away to ROTH IRA accounts.

Investment Returns Simulations:

John and Lisa get to the task of planning how they could get to the target of $ 1.25 million in 10 years. In the first example, they assume that their investments would grow at a very steady rate of 9% a year for the next 10 years, while they contributed 16% of income every year along with 4% from employer’s matching.

Table-1

With 9% steady growth rate, they are very close to their target of $ 1.25 million, but not entirely. Further, the above assumption of 9% growth every year would probably be fine over 2 or 3 decades, but over 10 years it may not be very realistic. The market’s ups and downs from year to year can change the outcome. If the history is any guide, it can vary greatly depending on how the markets do in the next 10 years. Let’s run some numbers for John and Lisa, from the past for historical perspective to see what is realistic.

We will consider every 10-year period, starting from the year 1999; for example, 10-year periods such as 1999-2008, 2000-2009, 2001-2010 and so on. We will assume that they invested rather conservatively with a mix of 70% in stocks, and 30% in Treasuries and bonds. Let’s see how they would have fared in each scenario.

Now, what if, John and Lisa had decided to invest everything in S&P 500. Let’s see how they would have fared in this scenario:

As you can see if they had started their 10-year plan anytime between years 1999 and 2002, they would be much behind their intended target. The 10-year periods of 1999-2008, 2000-2009 and 2001-2010 were most undesirable as they had to bear two full-blown recessions/corrections and did not have enough time to recover from 2008 debacle. It is clear if John and Lisa had started the plan anytime between 1999 and 2002, there was no way they could have retired at the end of 10 years with the level of spending expenses as they had planned. The only options would have been either to postpone the retirement for a few years until the markets recovered or to cut down on their lifestyle significantly.

Now, for the sake of comparison, let’s also run the numbers if John and Lisa had decided to invest in a Conservative Risk-Adjusted Rotation portfolio (based on back-tested numbers). This portfolio rotates between S&P 500 fund and the treasury/bond funds. When the market is relatively strong, the more funds are invested in the market; however, when the market starts declining or enters into a correction phase, more funds get switched to treasuries and bonds. Such a portfolio would generally underperform slightly during strong bull markets, but protect the capital during major corrections or recessions.

Author’s Note: The above Risk-Adjusted Rotation portfolio is part of FFI’s Marketplace service “High Income DIY Portfolios.”

Comparison of 3 Investment portfolios:

Initial Capital = $ 300,000

Additional Contribution= $ 25,000 each year for 10 years

However, for the sake of simplicity, let’s assume, John and Lisa would get a constant return of 8% over 10 years, which is not overly optimistic. With this rate of growth, their savings and contributions over 10 years will accumulate to 1.01 million. Let’s round it off to $ 1.0 million. As we can see, John and Lisa would fall short of their target of $ 1.25 million. However, the gap is not huge and can be managed with some innovative thinking. The other solution may be that one or both of them work some part-time job for a couple more years; however, not a desirable outcome. Let’s look at some alternatives to manage the gap.

Bridging The Gap:

For John and Lisa, the other solution may be as follows:

  • They reserve 2 years of expenses in cash from the total capital, a total of $ 150,000 @ $ 75,000 per year, leaving the investment capital to $ 850,000.
  • Also, they had already decided that John will start withdrawing social-security at the earlier eligible age of 62. Due to early withdrawal, he will get 75-80% of the full benefits. We will assume that SS-1 to be $ 1,500 a month and grow at a very conservative rate of 1% per annum due to COLA (Cost Of Living Adjustments).
  • This will allow Lisa to wait until the age of 70 years to collect and let the social-security benefits be compounded to a much higher amount. We will assume that the SS-2 will be $ 3,000 per month, starting at 70 years and grow at 1% per annum by COLA adjustments.
  • However, at age 70, due to inflation (from age 60-70 years), their expenses would go up as well, and they would need roughly $ 94,000 to keep the same purchasing power as of $ 75,000 (when they were 60).
  • They assume that investments of $ 850,000 ($ 1.0 million – 150K reserve) will grow at a conservative rate of @8%.

COLA – Cost Of Living Adjustment – (Source: Investopedia)

An adjustment made to Social Security and Supplemental Security Income to counteract the effects of inflation. Cost-of-living adjustments (COLAs) are generally equal to the percentage increase in the consumer price index for urban wage earners and clerical workers (CPI-W) for a specific period.

Below is the table that simulates the income and withdrawals from the age of 60-80 years.

Explanation and assumptions:

  • Column A shows the age in years.
  • Column B shows the starting capital at the beginning of the year.
  • Column C shows the needed income each year. For the first two years, they need a fixed amount of $ 75,000 each year. After that, we will add 2.5% each year for inflation.
  • Column D shows the social security payments for John, the first earner, assuming he starts withdrawing at 62 years of age (the earliest eligible date). We will assume that social security payment increases at an average rate of 1.0% (Cola adjustment).
  • Column E shows the social security payments for Lisa, the second earner, assuming she starts withdrawing at 70 years of age (the late withdrawal date), so as to get higher payments. We will assume that she gets $ 3,000 per month starting at age 7 years. Also, social security payment increases at an average rate of 1.0% (Cola adjustment) after that.
  • Column F is the actual cash withdrawn from the invested capital. Column F = Column C – Column D – Column E
  • Column G shows the percentage of cash withdrawn. Column G = Column F / Column B
  • Column H is the net investible amount after taking out the needed income.
  • Column I: Rate of return on the invested capital = 8% per annum.
  • Column K is the total balance amount at the end of each year, after accounting for withdrawals and the growth of the capital.

Table-5

Now, there is no guarantee that the future returns will be at 8%. It can be less or more. It may depend on their investment choices and market conditions. Let’s see, what their net balance would be at the age of 80, assuming different rates of return, everything else being the same. In the below table, we are only showing the last line only (at age 80) from table-5, assuming different rates of return.

Table-6

As you see, a lot depends on what the average rate of return is from the investments. If they get only 6% rate of return, they are not doing so good, as their capital is reducing, albeit slowly. If that were to occur, they should modify their lifestyle and reduce spending by about 10%. However, if they were to get an average rate of 8%, which is highly feasible, they have nothing to worry as their net balance at 80 years would be 70% higher than when they started, in addition to the consistent income withdrawn. Anything more than 8% would, of course, be icing on the cake.

Conclusion:

The simple conclusion is that if you are already 50 years old or more and have not planned for a possible retirement, it is high time that you should do it. Of course, it can always be done prior to getting to 50, but your numbers may have a little higher margin of error. It is always prudent to start saving from an early age, but as John and Lisa’s example shows, it is never too late. Even if you have modest savings by the time you turn 50, there is still ample time to make a plan, ramp up the savings/contributions to retirement accounts and compound the savings. However, more you delay it, harder will be the choices.

Author’s note: If you like this article, please click on the “Follow” button at the top of the article. In our SA Marketplace service “High Income DIY Portfolios,” we provide two high-income portfolios, one conservative portfolio, and another hi-growth portfolio. For more details, please click on the image just below our logo at the top of the article. We are currently running the 2-week free trial and discounted pricing.

Full Disclaimer: The information presented in this article is for informational purposes only and in no way should be construed as financial advice or recommendation to buy or sell any stock. Please always do further research and do your own due diligence before making any investments. Every effort has been made to present the data/information accurately; however, the author does not claim 100% accuracy. Any stock portfolio or strategy presented here is only for demonstration purposes.

Additional Disclosure: I am/we are long ABT, ABBV, JNJ, PFE, NVS, NVO, CL, CLX, GIS, UL, NSRGY, PG, MON, ADM, MO, PM, KO, DEO, MCD, WMT, WBA, CVS, LOW, CSCO, MSFT, INTC, T, VZ, VTR, CVX, XOM, VLO, HCP, O, OHI, NNN, STAG, WPC, MAIN, NLY, PCI, PDI, PFF, RFI, RNP, UTF, EVT, FFC, KYN, NMZ, NBB, HQH, JPC, JRI, TLT.MCD, WMT, WBA, CVS, LOW, CSCO, MSFT, INTC, T, VZ, VTR, CVX, XOM, VLO, HCP, O, OHI, NNN, STAG, WPC, MAIN, NLY, PCI, PDI, PFF, RFI, RNP, UTF, EVT, FFC, KYN, NMZ, NBB, HQH, JPS, JRI, TLT.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Too soon to determine risks of central bank-issued cryptocurrencies: BIS

LONDON (Reuters) – It is too soon to determine whether central banks should issue their own cryptocurrencies, the Bank for International Settlements said on Sunday, as the risks could not yet be fully assessed and the technology underpinning them is still unproven.

Central banks already use electronic money – only a very small proportion of their assets are now backed by gold – but this is exchanged in a centralized fashion, across accounts at the central bank.

What would be distinctive about a central bank-issued cryptocurrency – rather than just electronic money – would be that this could be exchanged “directly between the payer and the payee without the need for central intermediary”, by means of blockchain technology, BIS said in its latest Quarterly Review.

Blockchain technology enables peer-to-peer payments to be made using decentralized cryptocurrencies like bitcoin, by means of a shared ledger that verifies, records and settles transactions in a matter of minutes.

“While it seems unlikely that bitcoin or its sisters will displace sovereign currencies, they have demonstrated the ability of the underlying blockchain or distributed ledger technology (DLT),” BIS said.

Publication of the BIS report coincides with a crackdown by China on the cryptocurrency business as it tries to limit risks with consumers piling into a highly speculative market that has grown rapidly this year.

RETAIL OR WHOLESALE?

The report explores two possibly forms of central bank-issued cryptocurrency: a consumer-facing currency for use in retail transactions, and a wholesale one that would be used by institutions as a “token” currency for digitally settling transactions.

BIS concluded that the peer-to-peer nature of the technology meant that a cryptocurrency for consumers could enable the anonymity that cash currently provides. But if that were not seen as important, it said, it was unclear what further benefits it could provide.

“Most of the alleged benefits of retail central bank cryptocurrencies can be achieved by giving the public access to accounts at the central bank, something that has been technically feasible for a long time but which central banks have mostly stayed away from,” it said.

BIS said that the question of whether or not a central bank should offer a digital alternative to cash was most pressing in a country like Sweden, where cash usage has declined rapidly over the past decade.

A retail cryptocurrency could also, if it were to completely replace cash, remove the zero-lower-bound constraint on monetary policy, BIS said, as it would no longer be possible for depositors to avoid negative interest rates by hoarding cash.

On the institutional side, a central bank-issued cryptocurrency’s usefulness depended on whether it could reduce settlement times and improve efficiency, BIS said. But that had yet to be proven and would depend on the successful resolution of a number of technical issues.

BIS concluded that central banks would probably have to decide on an individual basis whether issuing retail or wholesale central bank cryptocurrencies made sense for them.

“In making this decision, central banks will have to consider not only consumer preferences for privacy and possible efficiency gains – in terms of payments, clearing and settlement – but also the risks it may entail for the financial system and the wider economy, as well as any implications for monetary policy,” BIS said.

“Some of the risks are currently hard to assess,” it said, adding that very little was known about the resilience such currencies would be able to show to cyber-attacks, for example.

Reporting by Jemima Kelly; editing by John Stonestreet

Our Standards:The Thomson Reuters Trust Principles.

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Everything We'll Be Watching for During the Emmys

For years the Emmys were the place that Modern Family went to pick up something pretty for the mantle. But that’s all changing thanks to the likes of Netflix, Hulu, and Amazon. Now streaming services compete—and win—right alongside their big network counterparts. With more players in the game, television studios are starting to pony up for really creative shows to grab attention. All of this has lead to a lot of amazing TV. In anticipation of the Emmys, which air tonight at 8 pm Eastern/5 pm Pacific on CBS, WIRED’s editors spent last week reflecting on our favorite shows of the last year—and why we think they deserve to be rewarded.

The Handmaid’s Tale Reinvented Dystopia

The Handmaid’s Tale couldn’t have come to Hulu at a better—or worse—time. The adaptation of Margaret Atwood’s 1985 novel started production in 2016, when it looked like the United States was on a course to elect its first female president; it got released in 2017, after that same country elected a man who dismissed his use of the phrase “grab ‘em by the pussy” as locker room talk and saw a swell of white nationalism in its borders. Atwood’s dystopian world of Gilead was modeled after an America that had succumbed to totalitarian theocratic rule. It’s not quite Trump’s America—but as The Handmaid’s Tale’s first 10 episodes rolled out, it was hard not to see similarities. (Read the rest of Angela Watercutter’s appreciation of  The Handmaid’s Tale.)

The Handmaid’s Tale couldn’t have come to Hulu at a better—or worse—time. The adaptation of Margaret Atwood’s 1985 novel started production in 2016, when it looked like the United States was on a course to elect its first female president; it got released in 2017, after that same country elected a man who dismissed his use of the phrase “grab ‘em by the pussy” as locker room talk and saw a swell of white nationalism in its borders. Atwood’s dystopian world of Gilead was modeled after an America that had succumbed to totalitarian theocratic rule. It’s not quite Trump’s America—but as The Handmaid’s Tale’s first 10 episodes rolled out, it was hard not to see similarities. (Read the rest of Angela Watercutter’s appreciation of  The Handmaid’s Tale.)

How Atlanta Expanded the Limits of Storytelling

Atlanta, akin to the city itself, is pure sprawl—thematically sweeping if sometimes implausibly lush, with its cabal of lovably thorny characters and its conceptually exhaustive format. Much to the credit of Donald Glover and his all-black writers’ room, it is a show without a roadmap that isn’t afraid to take detours to uncharted territories (or get lost and find its way back). As such, the Emmy-nominated comedy (it’s up for four awards on Sunday) has no precedent. In the short history of contemporary television, there have been more than a handful of shows that have traversed the highs and lows of black life—some of them exceptional, most of them simply OK. But there’s never been a vision quite as specific and as versatile and as wonderfully gonzo as Atlanta: It speaks with a cultural knowingness that, until its debut, had never been given space on TV. (Read the rest of Jason Parham’s appreciation of Atlanta.)

Atlanta, akin to the city itself, is pure sprawl—thematically sweeping if sometimes implausibly lush, with its cabal of lovably thorny characters and its conceptually exhaustive format. Much to the credit of Donald Glover and his all-black writers’ room, it is a show without a roadmap that isn’t afraid to take detours to uncharted territories (or get lost and find its way back). As such, the Emmy-nominated comedy (it’s up for four awards on Sunday) has no precedent. In the short history of contemporary television, there have been more than a handful of shows that have traversed the highs and lows of black life—some of them exceptional, most of them simply OK. But there’s never been a vision quite as specific and as versatile and as wonderfully gonzo as Atlanta: It speaks with a cultural knowingness that, until its debut, had never been given space on TV. (Read the rest of Jason Parham’s appreciation of Atlanta.)

Westworld’s Strength Is Its Inhumanity

One scene from Westworld replays in my head again and again, a little like (I imagine) one of the poor, doomed robots on the show who start noticing and remembering the programmatic loops in their simulated, hyper-violent Old West sandbox game. It’s when the android Maeve, played by Thandie Newton, grabs a technician’s tablet showing the dashboard for her personality software and, with a deft finger swipe, upgrades herself to genius. Yes, maybe taking control of your life by literally taking control of your life is a teensy bit on the nose. But for me it was the best flicker of weirdness from a show that—again, like its robots—dreamed big dreams. (Read the rest of Adam Rogers’ appreciation of Westworld.)

One scene from Westworld replays in my head again and again, a little like (I imagine) one of the poor, doomed robots on the show who start noticing and remembering the programmatic loops in their simulated, hyper-violent Old West sandbox game. It’s when the android Maeve, played by Thandie Newton, grabs a technician’s tablet showing the dashboard for her personality software and, with a deft finger swipe, upgrades herself to genius. Yes, maybe taking control of your life by literally taking control of your life is a teensy bit on the nose. But for me it was the best flicker of weirdness from a show that—again, like its robots—dreamed big dreams. (Read the rest of Adam Rogers’ appreciation of Westworld.)

The Night Of’s Single Season Is the Future of TV

Last year’s best case for restraint was The Night Of, the hypnotic HBO legal miniseries created by Richard Price and Steven Zaillian. Which is not to say The Night Of didn’t have blind spots. It did, thematically and narratively—lazy detective work; the sluggish pacing of certain scenes—but the complete product was a small triumph: a sneakily crafted urban noir about the justice system that was ambitious and pragmatic in palatable doses. The show never overcompensated (if anything, the plot sometimes didn’t say enough). In this way, The Night Of was less of a whodunit and more of a close look at the contours of human identity—the way a single event radically alters the lives of the people it touches. (Read the rest of Jason Parham’s appreciation of The Night Of.)

Last year’s best case for restraint was The Night Of, the hypnotic HBO legal miniseries created by Richard Price and Steven Zaillian. Which is not to say The Night Of didn’t have blind spots. It did, thematically and narratively—lazy detective work; the sluggish pacing of certain scenes—but the complete product was a small triumph: a sneakily crafted urban noir about the justice system that was ambitious and pragmatic in palatable doses. The show never overcompensated (if anything, the plot sometimes didn’t say enough). In this way, The Night Of was less of a whodunit and more of a close look at the contours of human identity—the way a single event radically alters the lives of the people it touches. (Read the rest of Jason Parham’s appreciation of The Night Of.)

O.J.: Made in America Is a Masterful Feat of Editing

O.J.: Made in America is, to be sure, a feat of raw reportage—director Ezra Edelman and his producers conducted more than 70 interviews. But what editors Bret Granato, Maya Mumma, and Ben Sozanski accomplished was equally remarkable. They distilled hundreds of hours and countless narratives into a nearly eight-hour-long panoramic about everything from politics to race to the media—and somehow wrapped it all into a can’t-turn-away thriller. (Read the rest of Brian Raftery‘s appreciation of O.J.: Made in America.)

O.J.: Made in America is, to be sure, a feat of raw reportage—director Ezra Edelman and his producers conducted more than 70 interviews. But what editors Bret Granato, Maya Mumma, and Ben Sozanski accomplished was equally remarkable. They distilled hundreds of hours and countless narratives into a nearly eight-hour-long panoramic about everything from politics to race to the media—and somehow wrapped it all into a can’t-turn-away thriller. (Read the rest of Brian Raftery‘s appreciation of O.J.: Made in America.)

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Serverless computing may kill Google Cloud Platform

Google, which has had to claw its way back into cloud relevance in the shadows of Amazon Web Services and Microsoft Azure, suddenly finds itself playing catchup again, thanks to the rise of serverless computing. Although Google Cloud Platform still trails AWS and Azure by a considerable margin in general cloud revenue, its strengths in AI and container infrastructure (Kubernetes) have given it a credible seat at the cloud table.

Or would, if the world weren’t quickly moving toward a serverless future.

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Cloud providers such as Amazon, Google, Facebook and Microsoft are already rolling out distributed cloud infrastructure. Whilst the central cloud is established as an integral part of current and future networks, there are key issues that make the central cloud simply not the solution to several use cases.

  • Latency, also known as the Laws of Physics: The longer the distance is between two communicating entities, the longer the time it takes to move content there. Whilst the delay of reaching out to the cloud today might be tolerable for some applications, it will not be the case for emerging applications that will require nearly instantaneous responses (e.g. in industrial IoT control, robots, machines, autonomous cars, drones, etc.).
  • Data volume: The capacity of communication networks will simply not scale with the insane amount of raw data that is anticipated will need ferrying to and from a remote cloud center.
  • Running costs: The cost of a truly massive computational and storage load in the cloud will simply not be economically sustainable over the longer term.
  • Regulatory: There are and will very likely be new constraints (privacy, security, sovereignty, etc.) which will impose restrictions on what data may or may not be transferred and processed in the cloud.

So it certainly does make sense to distribute the cloud and interconnect this distributed infrastructure together with the central cloud. This process has already begun. One good tangible example is Amazon’s launch of the AWS GreenGrass (AWS for the Edge) product and their declared intentions to use their Whole Foods Stores (in addition to the small matter of selling groceries) as locations for future edge clouds/data centers. In general, cloud providers, perhaps driven by their real estate choices, have a relatively conservative view of the edge, restricting it to a point of presence typically 10 to 50 km from the consumer.

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