The Motley Fool
Ask the Fool
Cracking Open the Shell
Q: What’s a shell company? — H.L., online
A: A shell company is a structure that has financial assets and engages in financial transactions but has little going on in the form of operations — that is, little or no production or sales and few employees. Both businesses and individuals can create and use shell companies.
Shell companies have a shady reputation because although they’re generally legal, they’re often used for illegal purposes, such as tax evasion or money laundering. They’re often established in countries with exceptionally business-friendly laws and/or low tax rates (such as Bermuda, the Cayman Islands or Switzerland), and they can help a company or person hide certain activities, disguise ownership or tuck away money.
Q: Which women lead S&P 500 companies? — P.J., Sacramento, California
A: It’s easy to list them all, because women recently headed only 24 of the 500 companies in the S&P 500 — not quite 5 percent.
They are: Mary T. Barra (General Motors), Gail Boudreaux (Anthem), Heather Bresch (Mylan), Michele Buck (Hershey), Debra A. Cafaro (Ventas), Safra A. Catz (Oracle — co-CEO), Mary Dillon (Ulta Beauty), Adena Friedman (Nasdaq), Michelle Gass (Kohl’s), Lynn J. Good (Duke Energy), Tricia Griffith (Progressive), Marillyn A. Hewson (Lockheed Martin), Vicki Hollub (Occidental Petroleum), Patricia Kampling (Alliant Energy), Margaret Keane (Synchrony Financial), Beth E. Mooney (KeyCorp), Phebe N. Novakovic (General Dynamics), Patricia K. Poppe (CMS Energy), Barbara Rentler (Ross Stores), Virginia M. Rometty (IBM), Susan N. Story (American Water Works), Lisa Su (Advanced Micro Devices), Jayshree Ullal (Arista Networks) and Kathy Warden (Northrop Grumman).
Here’s one reason that low number is a shame: A 2016 Credit Suisse report says, “where women account for the majority in the top management … businesses show superior sales growth, high cash flow returns on investments and lower leverage.”
Want more money in retirement? Here are a few strategies to consider:
¯Work a few more years before retiring. Doing this offers multiple benefits: You can sock away more money, and your nest egg won’t need to support you for as long. You might enjoy your employer-sponsored health insurance longer, too — perhaps also while collecting a few more years’ worth of matching funds in your 401(k).
¯Work part-time for a while in retirement. Working just 12 hours per week at $12 per hour will generate about $624 per month, pre-tax. This can also give your days more structure and help you socialize more. Many people feel a bit restless and lonely in retirement, so a job can help with that.
¯Move. If you downsize and move to a smaller home — or to a region with lower taxes or a lower cost of living — you can end up saving money on taxes, insurance, home maintenance, utilities, landscaping and more.
¯Park healthy, growing, dividend-paying stocks in your portfolio. They’ll generate regular income, and their payouts tend to increase over time.
¯Look into fixed annuities (as opposed to variable or indexed ones, which can be problematic due to restrictive terms or high fees). By paying a lump sum now, you can secure monthly checks for a specified term or for the rest of your life. Learn more before buying any, and buy only from insurance companies with high ratings.
¯Consider a reverse mortgage, in which a lender provides income (often tax-free) during your retirement, based on the equity in your home. The loan doesn’t have to be paid back (typically by selling the home) until you no longer live in it — such as when you move into a nursing home or pass away. Reverse mortgages aren’t for everyone, but if no one is counting on inheriting your home, one might serve you well.
My dumbest investment was buying the stock of Delta Air Lines years ago. The company had been struggling, and its stock price had fallen. I couldn’t imagine that it would end up filing for bankruptcy protection — but it did. I was so sure that some other company would just buy Delta, as the company seemed to be valued in the market for less than it was really worth. And I didn’t realize that when Delta emerged from bankruptcy, it would be with new shares of stock, with old shares like mine canceled and rendered worthless. — Eaamon, online
The Fool responds: It’s typically best to avoid investing in struggling companies. After the 9/11 terrorist attacks in 2001, many airlines had a hard time, facing a sharp drop in people flying coupled with a surge in the price of fuel.
Delta’s bankruptcy was preceded by those of US Airways and United Airlines and came at the same time as that of Northwest. Delta exited bankruptcy in 2007 after 19 months — and after cutting costs and jobs and eliminating many less profitable routes.
EDITOR’S NOTE: The Motley Fool is an investment column created by brothers David and Tom Gardner and distributed by Andrews McMeel Syndication.