We video chat with people on the other side of the world. Cars are driving themselves. And Elon Musk has a spaceship that will take us to Mars. Vast and rapid change is happening across nearly every spectrum of life and business. Yet, one aspect of our culture remains relatively stagnant: the workplace. The way we work essentially remains rooted in the 9 - 5 protocol put in place over 100 years ago by Henry Ford. Why hasn't that changed?
For many of us, and particularly for those relatively new to the workplace, the way work is designed is a few frustrating steps away from being better. What if our company was run a little bit differently, or our company culture was really a top priority, or the way we work was an open forum to discover better ways to work for everyone involved? How would work need to change so we all can feel like we're working at forward-thinking companies like the Googles of the world?
Now, with the help of OpenWork, a non-profit organization, employees have access to a platform to voice their opinion and foster change. OpenWork believes any company has the potential to bring about progressive change by creating an open forum to exchange ideas from the ground up while remaining committed to working through change. OpenWork strives to spark change by working with companies to implement new practices and policies to create a better employee experience. OpenWork's mission is grounded by the beliefs of leaders representing organizations such as The Alfred P. Sloan Foundation, The New America Foundation, The Society for Human Resource Management, and many others.
How can you get started with OpenWork? The first step is to participate in OpenWork's anonymous survey so they can better understand your experience at work and how best to help you. The survey measures several elements of the workplace experience including company culture, workplace productivity, and the importance of collaboration in the workplace. Once you've completed the survey, you'll be given a company score and can see where your company ranks among the rest. Rally your friends and coworkers to do the same, and OpenWork will help communicate the aggregated results to your company as a way to stimulate changes to the way we all work together.
When you take out a loan for a car, charge something to your credit card, or get a personal line of credit, there is going to be an interest rate that applies to your loan.
A lot of different factors go into what you will be charged, including your own personal credit score. But even those with flawless credit still see a minimum charge that they can't get around. That all goes back to the Federal Funds Rate.
One thing consumers rarely realize is that all of our banks are lending money to each other every night. Banks are legally required to maintain a certain percentage of their deposits in non-interest-bearing accounts at the Federal Reserve to ensure they have enough money to cover any withdrawals that may unexpectedly come up. However, deposits can fluctuate and it's very common for some banks to exceed the requirement on certain days while some fall short. In cases like this, banks actually lend each other money to ensure they meet the minimum balance. It's a bit hard to imagine these multibillion-dollar financial institutions needing to borrow money to tide them over for a bit, but it happens every single night at the Federal Reserve. It's also a nice deal for those with balances above the reserve balance requirement to earn a bit of money with cash that would normally just be sitting there.
The Federal Reserve
The exact interest rate the banks will charge each other is a matter of negotiation between them, but the Federal Open Market Committee (FOMC) (the arm of the Federal Reserve that sets monetary policy) meets eight times a year to set a target rate. They evaluate a multitude of economic indicators including unemployment, inflation, and consumer confidence to decide the best rate to keep the country in business. The weighted average of all interest rates across these interbank loans is the effective federal funds rate.
This rate has a huge impact on the economy overall as well as your personal finances. The federal funds rate is essentially the cheapest money available to a bank and that feeds into all of the other loans they make. Banks will add a slight upcharge to the rate set by the Fed to determine what is the lowest interest that they will announce for their most creditworthy customers, also known as the prime rate. If you have a variable interest rate loan (very common with credit cards and some student loans), it's likely that the interest rate you pay is a set percentage on top of that prime rate that your lender is paying. That's why in times of low interest rates (it was set at 0% during the Great Recession), a lot of borrowers should go for fixed interest rate loans that won't increase. However, if the federal funds rate was relatively high (it went up to 20% in the early 1980's), a variable interest rate loan may be a better decision as you would be charged less interest should the rate drop without the need to refinance.
The federal funds rate also has a major impact on your investment portfolio. The stock market reacts very strongly to any changes in interest rates from the Federal Reserve, as a lower rate makes it cheaper for companies to borrow and reinvest while a higher rate may restrict capital and slow short-term growth. If you have a significant portion of your investments in equities, a small change in the federal funds rate can have a large impact on your net worth.
Whether you're leaving a job involuntarily, departing for something new, or just want to prepare for the unknown, it is smart to understand all your options regarding your 401k.
Frugal gifting often gets a bad reputation. However, this shopping method does not make you cheap — it makes you practical. Frugal gifts often avoid waste and overspending and can be just as meaningful (if not more so) as any other present.
With the National Retail Federation predicting each consumer this holiday season to spend upwards of $1,000 on holiday gifts amidst an economic recession —this year might be the perfect time to reconsider your spending budget. We've formulated the ultimate list of frugal gift-giving ideas to get you started.