What We Spend On Vacations – Demographics Review

As the summer approaches, families start to plan vacations and travel excursions. The travel industry in the United States is enormous, with over $887 billion spent every year on lodging, foodservices, transportation, and amusement. The most is spent on dining, with over $209 billion going to restaurant and other foodservice entities nationwide. Hotels and retail stores also capture a generous portion of what travelers spend.

Well-maintained roads and secure facilities throughout the country afford Americans the ability to travel confidently across the states. As do U.S. citizens, foreign travelers also find the Unites States a safe and easy country to visit and vacation in. In 2013, the U.S. had nearly 70 million international arrivals into airports and seaports. Of these, about half were directly from Canada and Mexico, and the other half from various countries overseas. The U.S. Travel Association calculates that every international traveler to the U.S. spends $4500 on their stay, which averages about 17 days.

Since the attacks of September 2001, it has become more difficult for foreign travelers to enter the United States, as fewer visas are issued and fewer foreign passports are allowed into the country. These security procedures have curtailed some travel to the U.S., but has not dampened the desire to visit the United States.

In aggregate, the travel industry generates over $2 trillion in economic activity, which includes direct spending, taxes, and jobs. Nearly 15 million jobs are supported by the industry, producing over $200 billion a year on wages earned by U.S. workers.

The average leisure traveler is age 47.5, which represents a typical consumer in their prime spending years and most likely with children. Thus, the majority of companies in the travel and leisure industries tend to create and focus their activities and themes around the desires and interests of this age group.

Source: U.S. Travel Association



What To Keep & What To Toss – Tax & Finance

As we make our way through the piles and files of receipts and statements left over from tax time, disposing of some of these obstacles is a thought. It is always suggested to carefully shred documents containing any critically sensitive information.

The idea is to toss out what you don’t need anymore, yet keep what you might need for taxes and accounting purposes. Here are some items that accumulate the most with a note as to how long to keep them:

Monthly Utility Statements – can be disposed of after three months unless the expenses are being written off for tax purposes, then you may want to maintain those until after tax time.

Pay Stubs – having the most recent pay stub handy is suggested, with no need to keep older stubs since the most recent stub should contain all YTD details. Should you be applying for a loan or mortgage, then having as much as one year’s stubs available is helpful.

Credit Card Receipts & Statements – can be tossed when the credit card statement is received and reviewed. If using a credit card for business purposes, then keeping receipts for seven years is the recommended time period. Statements on the other hand should be kept for three months should there be a dispute or chargeback of an expense.

Canceled Checks – can be shredded once the bank statement arrives. Credit card receipts and business related expenses should be kept for seven years.

Bank Statements – are possibly the most important items to keep for an extended period. Like pay stubs, if a loan or mortgage application is in process, six to twelve months of statements is what most lenders are asking for nowadays.

Insurance – always replace outdated policies and coverage verifications with the most recent and keep in an accessible place should a claim need to be filed.

Medical Statements, Bills & Insurance Notices – should be kept for at least five years especially if these items are used as tax deductions and even lingering insurance payment claims. With the onslaught of recent health care initiatives, it is wise to track and file all medical related items as detailed as possible.

Tax Returns & Supporting Items – should be kept at least seven years. Supporting documents include receipts, mileage logs, spreadsheets, paid invoices and canceled checks.



Gasoline & Oil Prices Projected To Rise – Commodities Update

Each month, the Energy Information Agency (EIA) tracks the price of gasoline nationwide as well as how much households (consumers) are buying overall.

The EIA expects gasoline prices to start rising this year, while continuing to head higher into 2017 as demand picks up and supply levels drop. Gasoline prices had been falling because of lower crude oil prices, which account for about two-thirds of the price U.S. drivers pay for a gallon of gasoline.

Increases in fuel economy are also contributing to lower fuel expenditures, as cars and trucks are more efficient and travel farther on a gallon of gasoline. According to the Environmental Protection Agency, the production-weighted fuel economy of cars has increased from 23.1 miles per gallon for 2005 cars to almost 28 mpg for 2014 cars, an increase of over 20%. Similarly, the fuel economy for trucks has increased 19%, from 16.9 mpg to 20.1 mpg in the same timeframe.

The Consumer Price Index (CPI), a statistical measure of inflation, has gasoline accounting for 5.1% of consumer spending as of October 2014. Reductions in gasoline prices ultimately impact the relative weight of gasoline compared to other expenditures such as shelter, clothing, food, and entertainment in price indices compiled by the Bureau of Labor Statistics (BLS) and the Bureau of Economic Analysis.

The demand for gasoline is very price inelastic over short time periods, meaning changes in price have little impact on the number of gallons used. Falling gasoline prices allow households to spend their income on other goods and services, pay down debt, and/or increase savings. However, the longer prices remain low, the more time households have to plan for driving vacations and decide on where to spend their excess money.

Sources: EIA, Commerce Dept., BLS, EPA


Who Owns Gold – Commodities Market Overview

Many believe that Russian President Putin is trying to distance his country from its reliance on the U.S. dollar, which is the primary currency used to trade oil and other major commodities worldwide.

Over the past five years, Russia has been increasing its stockpile of gold bullion significantly, to over a value of $44 billion.

There have been instances when countries have imposed exchange controls or a freeze on assets, such as on foreign securities. Gold provides the essential liquidity in these circumstances. Thus central banks from around the world accumulate and hold gold to afford such benefits.

For thousands of years, gold has been one of the most sought after metals in the world. It was first used as jewelry as early as 2600 BC in ancient Mesopotamia, what today is Iraq. Gold was introduced to dentistry in 600 BC, and has since then been introduced to various other applications. Several industries such as electronics, food, medical, and manufacturing all utilize gold in some fashion. Most notably, gold plays a significant role in the international monetary markets, where countries worldwide hold gold as a reserve. Holding gold as a reserve provides diversification among assets, economic security, and liquidity.

Gold is a unique asset in that it is no one else’s liability and, is not directly influenced by the economic policies of any individual country. Its status cannot, therefore, be undermined by inflation in a reserve currency country.

According to the World Gold Council, the ten countries with the largest percentage of reserves in gold include Germany, Italy, France, China, and India, with the United States holding the largest amount of reserves.

Based in the UK, with operations in India, the Far East, Europe and the U.S., the World Gold Council is an association whose 23 members comprise the world’s leading gold mining companies, representing approximately 60% of global corporate gold production.

Sources: CIA Factbook, World Gold Council