Three key elements in savings

Source: The Star Online (Yvonne Tan)

So, you’ve worked for some years now. How do you know if you are doing “well” when it comes to saving your money for a rainy day? Is there a magic number which tells you how you are faring?

“As a rough guide, one should set aside 20% to 30% of one’s net income every month for savings,” says licensed financial adviser Jeremy Tan of Standard Financial Planner.

“Saving is important because when you save you are preserving wealth for future consumption,” he tells StarBizWeek.

Generally, there are three key elements to one’s savings.

“If you have these in place, or are on your way, you are faring ‘well’,” Tan says.

“First, one should have what is called an emergency fund, this should equal at least six months of your current net income.

“This fund is set aside in the event you lose your source of income unexpectedly, so this should keep you going until you find another job,” he said.

Next is your life-risk fund, which is basically funds to be used when a person loses the ability to earn an income, i.e. becomes paralysed or ill.

This is normally accumulated via an insurance policy. Here, one should ensure that the funds are equivalent to at least five years’ annual income, according to Tan.

“So, for example, if you earn RM5,000 a month, which translates to RM60,000 a year, then you should buy a RM300,00 policy,” he says.

Third, you should set aside some money for generally safer investments such as property and blue-chip stocks.

“This should garner you some decent returns but you have to be careful of your choices,” he says.

“Following these principles is a good start to securing your stash,” Tan adds.

Comparing the amount you have tucked away with that of individuals of your same age simply to gauge how “successful” your savings strategies are is not a good benchmark, says another industry player.

“People like to do that but there is no point in comparing yourselves, say, if you are a 30-year-old to another 30-year-old, because every one has different goals and different lifestyle, not to mention different income levels” says Keith Hiew, wealth adviser at Freebase Wealth Advisors Sdn Bhd.

“There is no golden rule that says that at age 30, you should have this amount and so forth. You save within your means but you have to save,” he says.

“You know you are saving ‘enough’ when that savings are able, in your comprehensive and integrated financial plan over your lifetime, to cover your education, retirement and other goals,” says MyFP Services Sdn Bhd financial planner and managing director Robert Foo

“The wisdom in financial planning is save what you have first and then spend the rest,” he says.

For R. Kumar, a single, 30-year-old engineer who earns about RM40,000 a year in net income, savings are top priority, simply because “I cannot afford not to save.”

“I scrimp to save and invest a little every month but I make sure I do because I know my Employees Provident Fund (EPF) money is not going to be enough for my old-age,” he says.

A recent survey by the EPF showed that around 90% of the 5.7 million active members had less than RM100,000 in their accounts and more than 70% would have exhausted their money within three years of withdrawing the lump sum upon retirement.

Generally, Malaysia enjoys one of the highest savings rates in the world at 34%.

In the United States, during the economic boom that took place between 2005 and 2008, a credit-fuelled consumer spending craze effectively brought the US savings rate to zero.

Ahmad (not his full name), a 40-year-old private school teacher says he supplements his income by giving tuition. “The extra income earned is saved and invested,” he says.

“Based on my income alone, I am not able to save much, that is why I do extra work.

“You’ll be surprised to know how much I have saved over the years,” he says gleefully.

Handerpants: Support Where You Never Knew You Needed It

By Don Nguyen (Gizmodo)

Do you ever find yourself lacking support, your middle and index fingers dangling all over the place?—yes!—well you're in luck, Handerpants are here to save the day.

I'm normally a Hander-boxers guy, but I need something more for my workouts on the iPhone Treadmill—that's where these tighty-whities shine. The Handerpants are made of 95% cotton and 5% Spandex to ensure a comfortable fit, and are a bargain at $11.95 a pair. If you still can't get enough Handerpants magic after watching the video, there is a free ringtone so you can relive the wonderment everytime you get a call.

Buy Your Laptops in August, September and April

Source: Gizmodo (Dan Nosowitz)

DealNews took a relatively standard laptop—Vista-equipped, 15.4-inch, Core 2 Duo, at least 2GB of memory—and graphed the average price over the last year. The findings confirm what we already knew: Laptops are cheapest in the fall and April.

As we all know, August and September are prime times to snag one of those great back-to-school deals, whether you're actually going back to school or not. April is a little more interesting: The price dipped even further than in the fall, and there's no obvious reason like a holiday. We assume the dip comes from most manufacturers announcing new models around that time, and needing to clear out last year's models. The worst time to buy a laptop seems to be late winter and early summer, the worst month being February. Yeah, we all knew this stuff already, but it's good to see a nice neat graph confirming it.

Think long term, write an Investment Policy Statement

Source: DAN SERRA - McClatchy-Tribune News Service

Volatile moves in the stock market are leaving many investors scratching their heads in deciding whether to buy or sell. Unfortunately, making a decision based on what the market is doing now is the wrong way to invest.

The best way to avoid short-term thinking is to write an Investment Policy Statement, or IPS. This is like a personal diary for investments in which an investment philosophy is documented according to financial goals, such as funding college or retirement. Abiding by the IPS provides both direction and reduces emotional decision making.

Begin by stating the acceptable risk of a portfolio on a scale from conservative to aggressive. Conservative would be 80 percent or more in fixed income while aggressive would be 80 percent or more in stocks. This provides a reference for rebalancing in order to maintain the desired risk. Also document when these percentages will change as time goes on.

Next outline the financial targets and goals, such as buying a house or building a retirement fund. Include the length of time needed before these targets are reached and what will happen with the portfolio at that time. Will it be cashed in or invested more conservatively as the goal approaches? Develop the desired percentages of bonds versus stocks at each stage. For example, for a college fund, a 2-year-old's fund can have 80 percent in stock. But at 16 years old that would be too risky with college two years away so a policy could state that the percentage of stocks decreases every five years until 100 percent is in cash at age 18.

The IPS could also state any needs for income in order to stay on track for investing in income-producing investments. After selecting a desired annual amount of income, do the math to determine what the yield would need to be on the current amount of assets and state that need.

The IPS should also state what investments are desired and what type to avoid. For example, blue chip stocks versus small cap stocks and high-grade bonds versus low-grade bonds. Make a list of each asset class and the appropriate percentage desired to be invested, or a range. This again helps when it comes time to rebalance.

Anyone who works with a financial planner should already have an IPS written for them. If not, ask for it.

This IPS is most valuable in volatile times as a reference on why to stay on course and not make irrational decisions based on what's happening today. Short-term market fluctuations are not a reason to change goals. Considerable research has found investors who move in and out of markets get lower returns than those who stay invested at all times.

10 Important Investment Risks You Must Know

Source: KCLAU.COM & Kevin Chong, (Johor Bharu), Malaysia



What is risk ?
Risk is the probability that an investment’s actual return will be different than expected.
This includes the possibility of losing some or all of the original investment.
Some regard a calculation of the standard deviation of the historical returns or average returns of a specific investment as providing some historical measure of risk.
Financial risk is market-dependent, determined by numerous market factors, or operational etc.
Nowadays, many people lose money in the stock market. Why is this happening? It is because they don’t know how to control the existence of potential risk of investment. Therefore, it will make you lose money and feel hard to earn money from the stock market.
We must know that all investment activities will include some form of risk, such as losing money, stock risk, and market risk and so on. Although, I am still a newbie in stock market, but I have learned all golden investment rules from Warren Edward Buffet, and a local famous stock Teacher Lee Xin Hong. Both of them are my admired idols and teachers. I also have gained two years of experience by investing directly in the stock market.
Investing in stock is not an easy job, because we must always do all the research to assess the potential of a listed company, as well as the market condition too. If you don’t understand all the related facts about a company, it may cause you to lose all your money. It’s true.


Image by Vicki & Chuck Rogers via Flickr Here are the 10 important risks you must know before putting your money into the stock market.
Let’s go through all the type of investment risks：
1. Mismatch Risk: Trade the wrong investment product and it doesn’t suit your budget plan.
e.g : Budget Plan : RM5,000; The stock you bought : RM5,500

2. Inflation Risk: Return of investment (ROI) is less than the market inflation rate.
e.g. Return of investment (ROI) : 5%; Market Inflation rate (IR) : 8.5%

3. Interest Rate Risk: The change of interest rate may decrease the return of investment.
e.g. current interest rate : 2.0 %; Interest rate of the time you bought it : 3.5%


4. Market Risk: Stock market goes up and down according to the market trend, meaning that your return of investment can increase or decrease at such a time.
e.g Current stock price : 0.500; Bought price : 0.470 ( may goes up or down )


5. Market Timing Risk: Trade without knowing the market trend, for example: Current trend is a downtrend. That means that you’ve enter at the wrong time to buy stock. You must always buy during uptrend.


6. Non-diversification Risk: Don’t put all your eggs in one basket
e.g. Cash on hand: RM5,000, put all money in the stock market. You should diversify into fixed-deposit RM 2,500, stock market: RM2,500. If you lose money, you still have RM2,500 on hand.


7. Liquidity Risk: When you want to sell the stock you are currently holding, there is nobody there to buy your stock, meaning that there is no volume in that stock.


8. Gearing Risk: You borrow money from bank or friends to invest. If you lose money, you are unable to cover all the losses.


9. Legislative Risk: The change of investment bank rules may affect your investment plan.

10. Personal risk: scare and greedy. Warren Buffet once said, “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful”. This is the method of reverse investment in stock market.

Finally, if you are a newbie to the stock market just like me, I will strongly encourage you to adopt a long-term investment plan with a small token to gain some experience first, make sure you are familiar with it. Don’t ever test water with both feet. And, always remember that you are either you a winner, or a loser in the stock market.

Leverage in Investment

Source: KCLAU.COM

Leverage means The use of credit or borrowed funds to improve one’s speculative capacity and increase the rate of return from an investment, as in buying securities on margin.

Investing is already a high risk activity, according to those not used to do investment. If to use leverage in our investment, it means the risk involved is even higher. But only with the proper use of leverage, a person can grow rich even faster. We must have heard that most wealthy people actually had gone through some difficult years prior to their success. Normally, they are able to double their income every year after those initial struggle. They certainly use some form of leverage. Example:

1. Buying property with bank’s money. In order to own a RM100,000 real property, we only need to pay 10% down payment of RM10,000 for residential property. When the property appreciate to RM110,000, we made a gain of RM10,000, which is a 100% return from our initial RM10,000.

2. Buying warrant instead of it’s mother share. Warrant itself is a form of leverage. When the share price rises 10 sen, the warrant will normally follow by 10 sen as well. Those who bought warrants know that warrant is a derivative security that gives the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame.

3. Borrowing money to do business. That’s how entrepreneurs are able to build their wealth in a short period of time ( 3-5 years). They use the bank’s money by paying them 4-9% interest, but are able to produce more than 20% return per annum in their business.

If we can learn the art of using leverage, we will be able to grow our wealth much faster!

Money Conflicts in a Marriage (Part I & Part II)

Source: KCLAU.COM & Jacquelyn Wong

a marriage, couples seldom see eye to eye in every aspect of money management. Therefore, it is not surprising to hear that money problems or arguments are a leading cause of marriage breakups.

Conflicts are common
If you find that you are constantly fighting or having arguments about money with your spouse, do not worry as a lot of other marriages are also facing the same situation. Each partner brings different money beliefs and money management styles into the marriage relationship. When the difference is so big, the couple end up fighting as each tends to stick to his or her beliefs. Each person also has different money habits, for example one partner likes to spend money with no thought of future savings whereas the other partner hates to spend hard earned money. This is a good example of a money conflict in a marriage where one partner prefers instant gratification and the other delayed gratification.

Reasons for the differences
There are various factors that influence a person’s perception on money matters. Each person is unique taking into consideration the family background, the growing up environment, the upbringing style, the educational background, etc. A person who has never been educated or even read about financial matters cannot be expected to automatically know about wealth creation or preservation.

Compromise
Successful married couples should be familiar with this word, “compromise.” Couples learn to negotiate and to reach a decision where it is a win-win situation for both partners. For example, let’s take Mr. and Mrs. X. Mr. X currently has his eye on an expensive digital camera and would have bought it immediately if it were not for Mrs. X disapproval. They eventually reach a compromise where Mr. X is supposed to set aside a certain amount of money each month whereby he would have the sufficient funds to buy the camera after five months. Mr. X ended up buying a different brand of camera at a cheaper price but with the same satisfactory performance. During the five months, Mr. X had spent more time surveying the different types and brand of camera available in the market. So, Mr. X got his camera and Mrs. X is happy on the money saved.

What money arguments do you normally encounter in your marriage? How do you solve the money problems with your spouse?

In Part I, the idea of money conflicts in a marriage was introduced. Part I covers the reasons for having the conflicts and the importance of compromising as a solution.


Make the conflicts work for you

Part II will cover the idea of having conflicts that can be made to work for instead of against the relationship. It is near impossible to meet a couple that thinks identically or who can 100% agree on every aspect of their financial management. So, what are the ways to overcome differing financial habits and attitudes?

Adopt a wait and see attitude

Certain money issues or problems cannot be solved immediately and hence adopting a wait and see attitude is recommended. This will give the couple sufficient time to review the problems and to see whether their financial situation has changed or not. Any decision to be made will be based on the current situation. This prevents making decisions on impulse or at the spur of the moment.

Balance and complement each other

In a relationship, it is common to have one partner who is a spender and the other, a saver. One person may love to spend on big items or purchases but is very stingy when it comes to other areas. The other partner may spend more often but only on small inexpensive items. Overall, the financial situation is not affected as this couple knows how to balance their money habits. Therefore, ensure that there is a balance between your money strengths and weaknesses.

Let the capable person take charge

Normally one partner will be more knowledgeable or capable in handling matters related to money. Hence, it is only logical to entrust him or her with most of the money matters. However, there should be frequent interaction or communication between both partners regarding the family finances. The couple should be jointly responsible when it comes to making decisions on money matters.

Therefore, money conflicts in a marriage are common but they can be overcome if both partners are sensitive to each other and willing to find a common solution.

How do you solve the money conflicts in your marriage? What method works best for you?

The Best Places to Launch a Career

Sources: Business Week ( Lindsey Gerdes )



To lure and keep young talent when cash is tight, companies of all stripes are appealing to Gen Yers' ambitions for speedy advancement—and their desire to do good while doing well

As career choices go, the hotel business isn't one that will put new college grads on the path to riches. With few exceptions, new employees can expect an annual salary of less than $40,000, a figure that has barely budged in recent years. So when Marriott International (MAR) visited the University of Delaware campus on a recruiting trip, it didn't wave a big wad of cash in front of Claire Pignataro. It didn't have to. It had already hooked her with something she considered far more valuable: a chance to help run a hotel.

A semester at the Courtyard by Marriott hotel, located on the Delaware campus, is required as part of the school's hospitality program. Pignataro, who was among the first students to work there, took part in virtually every aspect of opening the hotel, from developing marketing materials and designing weekend packages to even checking the legal mumbo jumbo posted in every hotel room. After graduating in 2005 and joining Marriott full-time, she entered a three-month management training program at a full-service hotel in Bridgewater, N.J., that put her through her paces again, including brief stints in the restaurant, food and beverage service, and front office. Knowing Pignataro wanted to be a wedding planner—and not wanting to lose her—Marriott gave her the next best thing: a permanent slot as an event planner at the Bridgewater property. "I was doing bar mitzvahs and weddings—all kinds of social and corporate meetings," says Pignataro, who is now in corporate sales. "You can do a lot of that within Marriott."

For companies like Marriott that need to win the talent wars without breaking the bank, opportunities such as those offered to Pignataro are rapidly supplanting pay as a way of luring and keeping the best new college graduates in the corporate fold. While the economy has taken its toll on middle management, many companies are continuing to hire entry-level employees—in some cases at a blistering pace. Even those that are hiring fewer employees for entry-level jobs are competing more intensely for the very best. While traditional perks such as pensions and health insurance still have their place, more companies are finding inventive ways to attract, retain, and motivate their youngest employees—using everything from work-from-home programs to faster promotions to financial benefits that kick in a few years down the road. Says Adam Kling, a workplace consultant with RHR International: "They're using those and other perks to help offset what you're seeing in your monthly paycheck." Or more to the point, what you're not seeing in your monthly paycheck.

No one recognizes the importance of perks more than Ernst & Young, where average salaries haven't increased substantially in at least three years. The Big Four firm still attracts more than 3,000 highly sought-after accounting students each year with extensive training and mentoring programs, performance bonuses, and the promise of face time with top executives—including an annual trip to Walt Disney World (DIS) for all U.S.-based interns, where they get to mingle with the powers that be. It's perks like that, along with a recruiting machine in overdrive and near-certain advancement to a supervisor-level position in just two years, that landed Ernst & Young atop BusinessWeek's third annual Best Places to Launch a Career ranking this year, unseating rival Deloitte

The ranking is based on three separate surveys: a BusinessWeek poll of career-services directors at U.S. colleges; a survey of 40,000 U.S. college students conducted by Universum USA, a Philadelphia research company; and a BusinessWeek poll of the employers themselves. With a greater number of qualified employers participating, we ranked 119 this year, up from 95 in 2007. (The complete list is available online.) The increased competition, along with shifts in sentiment among students and career-services directors, sent several newcomers, including No. 14 Target (TGT), No. 17 Boston Consulting Group, and No. 19 Anheuser-Busch, vaulting up the ranking, while several favorites from last year came off their pedestals. Microsoft (MSFT) slipped seven spots, to No. 13; Disney fell 20, to No. 27; and Accenture (ACN) dropped 39, to No. 47.

While accounting firms again dominate the top of the list, owing to impressive perks and intense demand, one of the most surprising things about this year's ranking is just how well the investment banks fared. With five banks in the top 50, including Goldman Sachs at No. 4 and J.P. Morgan at No. 10, it was the industry's best showing since the inaugural ranking in 2006, perhaps in part because the surveys were conducted before the full extent of the turmoil on Wall Street had become apparent. High pay and an otherwise excellent reputation on campuses propelled four of the five banks—including beleaguered Lehman Brothers—higher up the ranking.

However, for almost every industry, economic conditions today are far different from those that prevailed last year, when both hiring and salaries were on the rise. Overall, hiring was down 2% in 2007—more than 30 companies had cutbacks—and salaries advanced at a sluggish 2.8% pace, trailing inflation. Demand for accounting, computer sciences, and engineering majors created a few exceptions to the unfavorable salary picture, explaining why the accounting and tech companies fared as well as they did. But for the most part, 2007 was the worst year for the entry-level job market since 2003.

Amid all the gloom, companies are seeking new ways to find and retain new college grads. For many, the effort starts with campus recruiting, a hugely expensive undertaking that, for companies with high turnover, often has a very poor return.

To make the most of their recruiting efforts, many companies are scaling back their scope. In recent years, Philip Morris USA dropped nearly 50 campuses from its program, leaving it with just 34. Philip Morris President Craig A. Johnson says the quality of new hires is up as a result, and that more interns are being converted into full-time hires: 47% in 2007, up from 32% in 2005. PricewaterhouseCoopers pairs a targeted recruiting effort with a beefed-up Web presence that now accounts for 20% of its new hires. Jean Wyer, a PwC partner who was instrumental in developing the strategy, says students who find PwC through the Web site—as opposed to PwC finding them through on-campus recruiting events—have the kind of resourcefulness that results in successful accounting careers. "These are people who are paddling on their own," she says.

One reason companies like Philip Morris and PricewaterhouseCoopers are succeeding in their recruiting efforts is they've done the math. Both companies focus their face-to-face recruiting efforts at schools that have traditionally yielded the most hires, employees with the strongest performance reviews, or those who have stayed with the company the longest, among other metrics. For Philip Morris, one such school is Penn State. As a result of its analysis, the company not only has increased the number of Penn State graduates it hires each year for the last three years but has also broadened its recruiting efforts on the school beyond sales jobs.

A different state school in the Upper Midwest wasn't so lucky. The school, which Philip Morris would not identify, was recently cut from its recruiting roster when the company discerned that the number of interns from the school who were hired for full-time jobs was unsatisfactory. Says Ken Garcia, a company spokesman: "The numbers just didn't pan out."

For many companies, though, the bigger problem—far bigger than recruiting—is retention. Overall, average five-year retention rates for employers that took part in both the 2007 and 2008 rankings began to slip this year, from 55.4% in 2007 to 52.8% in 2008. This was true for some companies in low-paying industries, including insurance and transportation, and industries with relatively high pay, both of which struggled to hold on to their youngest employees. While the accounting industry made modest improvements, companies in other industries took it on the chin: Abbott Laboratories (ABT) saw its five-year rate drop from 83% to 72%, and Intel's (INTC) fell from 71% to 58%. Claudia Tattanelli, CEO of Universum USA, says falling retention is a function of Generation Y's fearless attitude: "They're not going to stay in a job just because the economy is bad."

Indeed, one reason high pay alone is no longer enough to guarantee loyalty is that many members of Gen Y, who have been entering the workforce since 2004, have other priorities. For them, issues such as community service and serving the greater good are among the most important, according to the 2008 Universum USA survey of U.S. undergraduates.

That's an inversion of the baby boomer priorities, and particularly good news for nonprofit and government employers. Some of the federal government agencies in our ranking—including the State Dept. and NASA—mesh well with Gen Y priorities, which helps explain why their retention rates are high even though the pay is nothing special. And with more than 60% of the federal workforce eligible for retirement by 2016 (and 37% expected to actually depart), the opportunities for rapid career advancement—another Gen Y priority—are growing. At AmeriCorps, which each year sends an army of 75,000 to serve nonprofit groups in communities across the country, applications from young adults are up 69% in the last four years. David Eisner, the CEO of AmeriCorps' parent agency, the Corporation for National & Community Service, says AmeriCorps is the beneficiary of a generation intent on giving something back. "It's the kind of demographic shift you almost never see," says Eisner.

But if you can't promise new college grads a chance to save the world—or a seat on the space shuttle—how do you get them to stick around?

A growing number of employers are trying the carrot-and-stick approach. Some companies in recent years have restructured their 401(k) matches and vesting schedules to entice new employees to stay until the richer benefits kick in. Among them: Honeywell International (HON), American International Group (AIG), and Blue Cross Blue Shield, where three out of four entry-level hires leave within three years. The health insurer last year ditched its traditional pension plan and created a 401(k) match that starts at 3% and goes as high as 10%, based on age and years of service.

To improve retention, Ernst & Young in 1999 began doubling its match after four years of service to 3%. Today, it boasts the best five-year retention among Big Four firms: 34%. Although that still leaves a lot to be desired, the savings in recruiting and training expenses are significant. Explains Mary A. Stringfield, E&Y's head of Americas benefits: "Retention was a key factor for designing that match formula."

As incentives go, ballooning 401(k) benefits are a crude but effective way to keep employees tethered to the company. But for a generation that values flexibility, there's something even more valuable that employers can offer: no tether at all. About a year ago, BearingPoint (BE) started a program to permit employees to work from home full-time. Of the consulting company's total workforce of 16,000, some 800 employees ultimately took it up on the offer, including Jenny Fredrickson. Fresh out of college, the 24-year-old marketing analyst started in the company's Redwood (Calif.) office in January 2007 but joined the work-from-home program a year later to be near her family and boyfriend, and to buy a home 360 miles away in tiny Etna, Calif. (pop. 750). Today, she's part of a virtual marketing team with outposts in six states. It's lonely at times, but conference calls and the occasional real-world meeting with her teammates break up the monotony. "There's a lot of flexibility with where you can live," says Fredrickson. "That's one of the main reasons I joined the firm."

It's too soon to determine the success of BearingPoint's work-from-home program. But Tom O'Connor, a senior BearingPoint manager who founded the program, says younger employees like Fredrickson find working remotely more desirable than boomers do, so there's real potential to increase their job satisfaction. "My son is a junior in college," O'Connor says. "The last thing he wants to do is sit in a cubicle all his life."

Programs like BearingPoint's improve retention by making employees more satisfied with the day-to-day aspects of their jobs. But more targeted interventions are sometimes equally effective. By making a big impression when it matters most—in the first year of employment, when a lot of entry-level hires jump ship, or at the three-year mark, when boredom and frustration often set in—employers can get their young charges over the hump and, with luck, motivated to stay on for many more years. More than a dozen companies in this year's ranking did that with cold, hard cash, increasing the size of performance bonuses awarded to entry-level hires in their first year on the job. KPMG paid out an average of $4,300, up from $3,500 in 2007, and to a far larger group of employees—nearly 80% got the bonuses in 2007, up from 53% in 2006.

At IBM (IBM), the average bonus more than doubled, to $3,500, from $1,500 in 2007, but fewer employees received them in their first year on the job: 83%, down from 92%. Laurie Friedman, an IBM spokesperson, says the company purposely raised the bar for awarding the bonuses to increase the amount and make a bigger impression. Says Friedman: "It's one of the ways IBM attracts the highest-quality applicants in today's competitive tech job market."

Money is all well and good, but nothing says "stay for the long haul" like a promotion. So companies are experimenting with ways to accelerate the process. While many companies award promotions only when a vacancy exists, several, including Philip Morris USA, have shifted to a system that considers employees for new positions whenever they're ready—vacancy or not—thereby removing one of the biggest obstacles to promotion. And Whirlpool (WHR) is now giving employees a chance to fast-track their careers by offering them opportunities to work on special projects that will enhance their skills, thus making them eligible for promotions earlier. The projects can be anything from a 60-day stint with HR to six months spent designing a new appliance. The pilot program was started in July, but the company expects it to be popular with young employees and to improve retention, which is already the best among consumer products companies in our ranking. "The more opportunities we can provide our employees to engage in meaningful work and challenging assignments, the more quickly we can help them achieve career goals," says Jeff Beavers, Whirlpool's director of global university relations.

The problem with providing all that meaningful work, however, is that too much can quickly lead to burnout—especially for a generation for whom work-life balance is a priority. This is a major concern in industries such as consulting, where long hours and nonstop travel can take their toll on new grads—driving as many as two-thirds to bolt inside of five years. To prevent that, Boston Consulting Group takes unusual precautions, monitoring employee hours through a formal early-warning system and sounding the alarm when hours approach the burnout zone.

On her first assignment, a stint in Toronto, Allie Melnick averaged 75 hours a week over a three-week period. The 23-year-old associate showed no signs of distress—to hear her describe it, she barely broke a sweat—but the long hours alone triggered BCG's early-warning system. Her project leader pulled her aside to find out how she was handling the pressure, then BCG quickly reorganized the case team, adding staffers and redistributing the workload to give Melnick a break. BCG's response made a big impression on her. "If you're working hard, people notice it," says Melnick. "It was a good feeling."

For many new college grads, however, nothing gets the juices flowing quite like a chance to speak truth to power. Mingling with top executives and having their ideas heard by senior managers is particularly important to Gen Y workers. So providing those opportunities is becoming a priority for many employers. Ernst & Young last year allowed interns aboard the corporate jet for some face time with the chief executive. Mark Kappelman, 24, an Arizona State accounting graduate who chose E&Y over the three other Big Four firms, said senior-level access is typical for new hires as well, and was one of the things that helped him handle all the duties he received in his first few months on the job. Says Kappelman: "It's a very uphill learning curve in the first year. They throw a lot of responsibility at you."

Some companies have even begun taking on the role of surrogate parents to attract and retain a generation often criticized as being far too dependent on mom and dad. Many companies, including Cisco Systems (CSCO), Unilever, and Ogilvy & Mather Worldwide, will now finance your move, help you pay for that laptop you can't afford, or even pick up the full tab for graduate school.

Some go even further. IBM brings in financial coaches from Ayco and Fidelity Investments to advise young employees. Nearly half of IBM's U.S. workforce uses the program, tapping the coaches for advice on everything from 401(k)s to mortgages. Darien Davis, a financial analyst in IBM's software group, says his coach taught him how to manage his student loan payments and still save for retirement, bringing a new "level of discipline" to his financial life. That was kind of the point, says Karen Salinaro, an HR vice-president. "You're just out of school, and you're trying to figure out how to live on the salary you're making," Salinaro says. "These are tools to help you and give you one-on-one interaction, rather than asking your mom and dad."

Perhaps the most unconventional method for holding on to the best entry-level talent is showing them the door—at least temporarily. A number of companies now offer employees a chance to work with nonprofits, a shot at saving the world without sacrificing their jobs. At Verizon Communications (VZ), dozens of employees, many of them Gen Yers, are dispatched to K-12 classrooms across the country each year to preach the benefits of studying engineering and computer sciences, disciplines that Verizon relies on to fill its talent pipeline.

At Boston Consulting Group, employees with 18 months at the firm can spend up to a year working at a nonprofit. Employees receive two-thirds of their pay; BCG and the nonprofit split the bill. Albert Chu, 24, who is spending a year with Save the Children, says BCG's philanthropic bent was a big reason he joined the firm after graduating from Duke in 2005—and a big reason he hopes to remain there for years to come. That's a long way from his original plan, which involved using consulting as a more immediate springboard into the nonprofit world. "I had always been looking at this as a short-term thing," says Chu, echoing a common sentiment among new college grads.

Not anymore.