Category Archives: Financial planning

Oct 29

How would you pay for college?

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President Barack Obama has vowed to make education a top priority. But what does that mean for you?
According to Education.com, America lags behind many nations in the world when it comes to making college affordable.

To make college more affordable for Americans, Obama plans center around two goals: his American Opportunity Tax Credit and freeing up more money for aid by using public instead of privately funded loan providers.

The president said his tax credit will ensure that, “The first $4,000 of a college education is completely free for most Americans, and will cover two-thirds the cost of tuition at the average public college or university,” he says. “And by making the tax credit fully refundable, my credit will help low-income families that need it the most.”

Other methods you can use:
The president certainly has good intentions, but parents and guardians has to play their part.  Numerous approaches can be taken to fund future college costs. Experience has shown that middle class families experience difficulties because they have too many assets to qualify for grants and other support programs. At the same time, they do not have sufficient assets to pay the tuition and fees.

It is best to have flexibility and control when choosing a plan to fund college cost.  Although certain college-funding programs certainly have advantages, a blending of goal-specific funding, such as the prepaid tuition or 529 plan along with a general funding mechanism, such as life insurance or controlled investment and savings, may be most beneficial.

I would love to hear what method you think is best and why.
May 26

Unhappy Employees = Bad Service!

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This morning I stopped by a local auto center to get my vehicle checked.  The sign on the door said “Open at 8:00 a.m.”, so I had no problem waiting for ten minutes.  However the door did not open until 8:15, because the employee who had to open the door was late.

After some paper work and a bit more waiting the mechanic came out to get the vehicle.  In the interim, I  was utilizing the time on my phone with a client, so I immediately concluded the call and said “Good morning…” to him.  He looked at me strangely and did not reply.  I was his first customer and wondered how could he be so angry that early in the morning.  I proceed to engaged him in small talk about the weather, but his reply was short and his expression indicated that he was not interested in my conversation.  As someone who is customer oriented, I concluded that something, besides my talk must be  worrying this employee.  He was certainly not happy and I was about to find out.

About an hour had elapsed and the mechanic returned with the keys and report on my vehicle.  During our conversation about the repairs, I mentioned that ” I don’t know the difference between a bolt and a nut..”  He raised his head and said ” I heard you on the phone talking about annuities, so I know you’re no dummy!”  I said “wow!..do you have an annuity?  He said no and told me a lengthy story about how his company had taken away his pension.

This obviously unhappy worker was employed with his company for more than forty years and was uncertain and unhappy about his retirement plans.  He was now talking to me and expressed disdain for his CEO. He said that he used to have a pension, which was taken away and replaced with nothing.  I could understand why he was not a “happy camper.”

After that experience, I have two suggestions. Firstly to CEO’s of businesses.  If your employees are unhappy they will produce bad service and your company will loose customers and ultimately loose revenue.  So, it is in your best interest to keep employees happy.  They are your greatest resource.  Most companies who are doing well, treat their internal and external customers very well.  Google and Apple are good examples.

Secondly to employees. The era of retirees being rewarded with a gold watch and lifetime pension after 40 years of work with a company has virtually disappeared. Traditional pension plans, are rapidly disappearing because of the high costs involved in funding them. Thus, it is important to be aware that you may have less help from your employer and will probably have to rely more on your own savings and investments to fund your retirement.

“As millions of baby boomers enter or are near retirement, they are coming to realize more than ever that they must learn how to convert assets into guaranteed retirement income.  Many people have no idea where to find guarantees in the financial marketplace.  Options do exist, so boomers will need to learn as much as they can about new forms of insured retirement income offered in the private sector and begin taking action.”  So said Gary C. Bhojwani, in his white paper on Rethinking Retirement.

Retirement planning should start early so you don’t have to end up being a disgruntled employee producing bad service early in the morning.  If you would like information on options available to you, please contact us.