Index fees; credit reporting rules
Index and money-market funds are socking investors with more than $300 million in excess fees, says a study from Fund Democracy and Consumer Federation of America. Index and money-market funds are plain vanilla investments that typically aren't actively managed and should charge low fees. But 57 S&P 500 index funds charge an average expense fee of 0.82 percent, four and a half times as much as the 0.18 percent charged by Vanguard, the study's benchmark of high performance and low fees. The study also found that 65 money-market funds charge an average of 0.92 percent in fees, almost three times the 0.33 percent charged by Vanguard.
Husbands and wives often can't agree on how much money they have or how much they owe, says a study published in The Journal of Socio-Economics. Typically, the husband estimates they earn 5 percent more income and have 10 percent more total wealth than the wife. The typical wife, in turn, estimates the family's debts at $500 more than her husband.
Half of the nearly 1,200 couples involved in the study disagreed on how much they earned by more than $5,000 a year, and 10 percent were off by more than $15,000. Disagreements about total net worth were even greater, especially between older couples. Half of couples 66 and older differed by more than $14,700 when estimating wealth. Ten percent were more than $100,000 apart.
Students say they learn about money the same way they learn about most thingsby doing it themselves and talking to their friends. According to a survey by Capital One Financial, 98 percent of college students and 90 percent of high school students say they learned about managing money through their own experiences. More than half of college students and 43 percent of high school students say they picked up pointers on money management from their pals.
But parents can take some comfort, too. More than eight out of 10 college students and nine out of 10 high schoolers rely on their folks for financial guidance as well.
Under a proposed revamping of the Fair Credit Reporting Act, consumers will get one free credit report listing their debts every year, but they'll still have to pay to learn their credit score. The new version, approved by the House Financial Services Committee, would also make it easier to avoid unsolicited credit card offers and applications. In addition, it would help consumers remove inaccurate information from their credit records and block financial institutions from using medical information for credit decisions.
But several consumer groups, including Consumers Union and the US Public Interest Research Group, want the law toughened before it passes the full House. They say consumers should receive annual credit scores for free and automatically get a copy of their credit report and score whenever they are denied credit.
For 2003 and 2004, automakers will have more than 15 models that can run on ethanol, but only 164 gas stations around the country pump the grain-based mixture. The flexible fuel vehicles can run on either gasoline or E85, a mixture of 15 percent gasoline and 85 percent ethanol, which is made from grain. Only 25 states now have gas stations that are equipped to sell E85, and some of them have only one station, says the National Ethanol Vehicle Coalition. Minnesota has the most, at 74. For lists of car models that use ethanol and states where you can get E85, see Online UPDATES or go to www.e85fuel.com.
Yvonne Wollenberg. UPDATE: Focus on finance. Medical Economics Sep. 19, 2003;80:10.