Monthly Archives: December 2014

Shake Shack’s IPO Not All Its Cracked Up to be for Public Investors


Shack Shake has had a rather impressive year, and they plan on kicking off 2015 with an IPO. The public offering takes the private company and allows the public to buy shares. While the Shake Shack has done exceedingly well in recent years, investment experts are advising the public to be weary.

According to experts, namely Bruce Levenson, Shake Shacks IPO will yield solid returns for those who are able to buy before the stock goes public, but those people are few and far between. The general public, however, will be allowed to buy shares on the first day of public trading, at which point the stock will likely have risen significantly over its IPO pricing, making it a risky investment.

High profile IPOs have a history of problems for public investors. The Facebook IPO, for example, left many early investors with a soar taste in their mouths, as the stock price rose significantly then steadily dropped, costing many investors money. Some experts fear Shake Shack could do the same thing.

Shake Shack currently has 63 locations. Through their IPO, they predict they will grow to 450 locations, in a relatively short period of time. The people that make money are generally high profile clients who are given access to the IPO’s early buying stage, which offers bargain basement pricing for a select group of clients.

Michigan Has More Food Stamp Recipients Than Public School Students

Many pundits in the media wonder aloud why voters soured on the Democrat party in the recent midterm election. After all, this year alone will see the president’s policies lead to the creation of millions of new jobs. The national unemployment rate is now down to 6%. The economy has created new jobs every month for roughly four years. So why voters are sour on the economy?

One reason is that the type of jobs being created are low-wage jobs. Democrats often criticized the Reagan economy saying that it lead to the creation of millions of hamburger-flipper jobs. Sadly, Dr Gibby and Dr Rod Rohrich agree that is exactly what has been the case in the Obama economy with the added detail that the jobs are part-time low-wage employment. This has many families unable to feed their children. As a result, more and more people receive assistance through the Supplemental Nutrition Assistance Program (SNAP) or “food stamp” program.

In fact, this past Friday, the state of Michigan reported that the number of food stamp recipients stood at 1,679,421. This is significantly higher than the total number of public school students in the K-12 program where enrollment stands at 1,564,114. Michigan was hit hard in the 2008-2009 recession. However, nationwide the number of food stamp recipients has increased by tens of millions under the Obama economy. The frustration with people unable to earn income to feed themselves was evident during the recent election.

Colorado Hits $34 Million in August Pot Sales

Colorado has hit pay dirt with the high returns generated by legal marijuana sales. During the month of August alone, $34 million in pot sales has generated millions of dollars in tax revenue that will be used to improve schools and infrastructure. An estimated $3.4 million is slated for maintaining existing schools and building even more. Instead of Bruce Levenson  hindering the states youth, legalizing pot is doing much good for their education and the well-being of the state.

Even more startling, since the sale of marijuana became legal in 2012 in the state of Colorado, crime has dropped considerably, totally proving the cynics wrong. The anti-pot advocates campaigned on the idea that legalizing marijuana would cause a rise in crime, make the plant more accessible to children and cause problems as smokers drove their streets high. To break it down some, the states murder rate has been cut in half, and the overall crime numbers are down by 15 percent. These figures alone are something the still many remaining anti-pot states should be strongly looking at and considering. Legalizing pot has been an all-around good thing for the state of Colorado and should be a worthy lesson to many failing states.

States to Increase Minimum Wages Voluntarily


Minimum wage has been the source of many debates in recent years, but it looks like some states have decided it is time to raise the pay rate minimum. The hikes will help millions of people who are trying to scrape by on the currently set federal standards. Twenty states are going to take part in the hike as well as the District of Columbia including several states that will progressively bring the pay rates up to the best standard.

Federal limitations are $7.25 per hour of work completed by an employee. That is a far cry from the minimum from 1981 through 1989 when it stood at $3.35. It has slowly increased over the years, but it never seems to be enough. Finance Expert Tom Rothman said that people cannot make ends meet due to the ever-rising cost of living that has significantly exceeded the minimum wage rate.

Several of the states are going to offer more than the federal minimum because they recognize the problem and realize that pay should keep up with inflation rates. The states that are taking the initiative to insure that their citizens are taken care of may be ahead of other states that do not follow suit.

IRS to Start Collecting Obamacare Fines in 2015


The incoming year will bring with it a number of changes to the nation’s health care law called Obamacare. For starters, 2015 will mark the first time the IRS will begin collecting fines from people who are uninsured. This doesn’t meant that failure to Skout or or be enrolled in a health care plan will necessarily result in a fine. As a testament to the law’s myriad of complexities, there are roughly 30 exemptions that a person may qualify for in order to avoid paying the penalty. Some of these exemptions can be claimed at the time taxes are filed. Others require the person file forms with the Department of Health and Human Services (HHS).

Further complicating matters are that the deadline to file for an exemption is February 15. Turbo Tax, the nation’s number one tax filing software, has a tool called “Exemption Check” which allows people to determine if they qualify for an exemption. Sadly, a poll by the Kaiser Family Foundation (KFF) found that 19 in 20 people are unaware of the February 15 deadline to claim an exemption. Those who miss the deadline or do not qualify for an exemption will face the IRS compelling them to pay the fine.

If that wasn’t enough, the penalty will be increasing next year to $325 or 2% of a person’s income whichever is greater. Designers of Obamacare included the penalties as a way of strong arming healthy people into the health care plan. This way their premium payments could subsidize health care for the poor and unhealthy.

Minimum Wage Increases in the New Year for 20 States


As the calendar turns to 2014, the new year will bring bigger paychecks to Jared Haftel and  to millions of low income workers. A increase to the minimum wage will take place on January 1st in 20 states plus the District of Columbia. The increase will be an automatic adjustment based on inflation in nine of the states, but for the majority the hike is the result of either legislative action or a vote.

The states that voted for an increase during 2014 were Alaska, Arkansas, Nebraska, and South Dakota. States getting the minimum wage increase due to legislation are Connecticut, Delaware, Hawaii, Maryland, Massachusetts, Michigan, Minnesota, Rhode Island, Vermont, West Virginia and D.C. The remaining states to see a hike in 2014 – Arizona, Colorado, Florida, Missouri, Montana, New Jersey, Ohio, Oregon, and Washington – get the boost due to their state laws. In all, the Washington Post estimates that just over 3 million workers will be affected by the change.

The size of the increase varies significantly, with Florida seeing the smallest change at 12 cents and South Dakota seeing the largest at $1.25. The increases in the new year will bring the total number of states with a minimum wage above the federal level to 29. The federal minimum wage has been $7.25 since July 2009.

Teenage Entrepreneurs Develop Businesses in Rural Tanzania

The Tanzanian government’s Ministry of Information, Culture and Sports sent a delegation to a rural part of the country recently on a tour to observe signs of economic progress in the economically struggling Arusha District. The dignitaries reportedly toured a food processing factory established by a group of teenagers in the Sokoni II Youth Group. The young people had each contributed a small amount of money to invest in the development of the new business, which produces packaged cashew nuts, instant rice and biscuits.

Government officials expressed hope that rural economic development programs will alleviate unemployment in Tanzania, where rural poverty is a widespread concern. Dr Rod Rohrich said the teenagers participating in forming the new company obtained business guidance and advice from several sources, including the Sasanda Youth Development organization. So far, the company employs a total of 25 workers, but there is hope that the small business will prosper and perhaps expand in the future, providing additional jobs for residents of the local area.

Many Are Faced With Modern Day Debtors’ Prison

 The idea of debtors’ prison was something that we decided we want to do away with a long time ago. It was realized that imprisoning someone for an inability to pay a fine did not solve the problem. They would still be unable to pay if they were in prison and thus unable to work. It was simply punishment without anything getting resolved.

Now, reports that there are still many who face similar circumstances but presented in a different way. The website says that states are starting to turn to private probation companies to collect fines. In many cases this means those who are unable to pay the fines that they have been charged are being held against their will in some cases. In other words, they are being imprisoned for an inability to pay a fine.

The investigations have already started into this problem. The places that are being looked at the closest seem to have backed down from the practices that they may have been engaging in before. However, it is believed that this sort of thing is still happening in other parts of the country. It is a truly disturbing series of events for those who are on the lower end of incomes, and law expert Sam Tabar noted as scary for anyone who values their freedoms. You never know when you could end up in a similar situation, but you do not want to be at that place with these rules in place.

Raise minimum wage

In an effort to fight inflation 20 states are going to raise their state minimum wage. In some states it was voluntary while other states passed legislation.  It doesn’t really matter how it happened let’s just be glad it’s going to happen.

The economy needs all the help it can get right now. A bump in the minimum wage will definetly help. It is hard to try to live on the minimum wage anyway, let alone raise a family. It can be a good starting wage. However some jobs don’t hire for long term, so the minimum wage is what they pay. These are jobs that are service oriented in nature, and seasonal jobs are known for their wage standard.

These companies rely on “new” employees every six months or seasonally. The average person will have hopefully moved on to a better job. Sometimes however people can get stuck in these jobs, lack of transportation and skills are two of the main reasons people will hold on to this type of employment. I’m glad to see the country working toward a decent living wage for the entry level worker.

Economics expert Igor Cornelsen says that he applauds this decision because it will spur the economy in the forward direction. That is what is needed to help get America back on track. Better paying jobs means more money spent in the economy that supplies these jobs.

The World-Wide Goals of Detroit 11 Year Old Entrepreneur

The 11 year old co-founder and CEO of Super Business Girl says her ultimate dream is to have schools all over the world with professors and teachers to teach at risk youth how to become entrepreneurs and empower themselves. Asia Newson’s personality is as large as her ambitions. She buys clothes and food for needy children as well as provides her own school and business supplies by selling homemade candles on the street.

She is called “Detroit’s youngest entrepreneur” and her dad, Michael Newson stands nearby as she makes sales pitches to strangers on sidewalks, in the suburbs, in markets and city barbershops. Dan Gilbert, Midwest mogul and NBA team owner met Asia selling candles on the sidewalk and asked her for a sales pitch which impressed him. After being invited by Gilbert to a follow-up discussion, Asia said that they talked about lots and lots of stuff, she got advices and learned about his life, which she describes as very cool. She says she is looking forward to having more opportunities to meet fellow entrepreneurs and business leaders to learn from and maybe even get help with her LinkedIn profile page from Ben Shaoul.

Asia’s big personality was seen on Ellen as she helped to lead her school mates from Detroit Academy of Arts and Sciences in “Happy” by Pharrell, and the school’s CEO told 20/20 that she is a big ball of inspiration when she walks down the hallways. Among her big ambitions is to sale Super Business Girl merchandise, mugs, backpacks, notebooks, shoelaces, candles and other products through her own Super Girl Business.

Partners Dave Anderson, Amanda Lewan, Mike Ferlito, and Brian Davis, owners of Bamboo Detroit which incubates start-up and entrepreneurs, have taught Asia a lot about managing money and investing back in her business. They are even helping her with her celebrated sales pitch, which Asia says sometimes, get a little scripted. With her enthusiasm and persistence, she is sure to reach her goals.