Tag Archives: finance

Student Loan Debt Hits a New High

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1.2 Trillion dollars.

Let that sink in and after you get finished with that, this site will help you visualize what a trillion dollars actually is

In one way I reckon that large student debt is evidence that people are seeking their education, which is a wonderful thing. It enriches one’s life in numerous way, not just having the parchment that makes you acceptable to employers.
But on the other hand, I cannot help but ponder why an education is causing so many SO much financial burden. $1000+ student loan repayments, just 6 months after you’ve graduated? What kind of situation do the holders of these loans expect graduates to be in?
If you look at it from a business standpoint, opportunities are rarely richer or more guaranteed than loaning money to people who need to get an education in order to make money and hope to have a middle class lifestyle. It’s almost like ransoming education. School is so expensive, (or should I say the “better” schools)… it might be justified by the quality of education, but its also the weight that the degree holds, which allows for more opportunities for the holder, along with many other factors, but for loaners the more it costs for the learner the higher stream of income that one can expect. On $100,000 in student loans, one can expect a return of perhaps $125,000? Sweet! A college education is supposed to allow one to “make it”, but how can you make it when a mountain of student loan debt is weighing on you before you really have a chance to get started.
The first years of one’s career are the most lean, and they become even leaner when you have a $500 bill coming right along with it.

I propose that student loan debt be treated like a mortgage, because it is more akin to a lifelong investment than it is to a payday loan, which is what it seems like now. It should be structured at an interest rate that is no more that 1.25% and should be spread out over 30 years. That means a student borrowing $100,000 for the life of their education would be paying $105 a month. I think that is fair and solid. It would prevent predatory lending to students and allow them to not be burdened with a huge sum before they are able to establish themselves.

1.2 Trillion is a lot of money.

5 Retirement Tips!

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In the last 6 months I have taken an active interest in my retirement portfolio and savings. Although I am still in my 20’s, I am finally in a stable position with employment and I have been in my career field for 5 years now. I have spoken with several people and asked questions regarding retirement plans, savings plans, and other important investment information for my future. Additionally, I have started to research online and looked at several books. One intriguing short article I read in the Money Section of Black Enterprise Magazine recently peaked my interest and gave me some important information. Below is a summation of the article:

 

Don’t Run out of money in retirement: 5 tips to make sure you don’t fall short and outlive your savings…

Many baby boomers are beginning to enter their retirement years, and are falling short of their financial needs. In an article in the “Money” section of Black Enterprise Magazine, Carolyn Brown discusses 5 tips that can help baby boomers or those of younger generations to make smart decisions regarding their retirement, that will pay off in the end.

 

According to the Employee Benefit Research Institute, “early baby boomers, (people 58-64) have a 44% chance of not having enough money to pay basic retirement costs and uninsured medical expenses. “Late boomers (ages 48-57), and Generation X workers (38-47), have about a 45% chance of running short, the study concluded.”

 

The following 5 tips come from Clyde Anderson, who is a financial lifestyle coach:

 

  1. Determine your needs. The rule of thumb is that you’ll need about 70% to 80% of your pre-retirement income to live on during retirement, according to your lifestyle. To get a snapshot of what this looks like, analyze your spending. Look at your bank account statements monthly, or try using programs such as mint.com looking closely at various categories of spending including: entertainment, food, travel, etc.
  2. Do the math. Examine the three areas critical for determining how much money you will need to retire: A. Your current age (when do you plan to retire) . B. Your goals, C. Your projected life expectancy. (Most benefit specialists and companies use 90 as a standard age- how long will you live in retirement (20-30 years).
  3. Don’t set it and forget it. If you begin to make a plan, make it realistic enough to follow and continue to track your progress.
  4. Rebalance. You can take one of the two general approaches which is to rebalance on  a regular time schedule such as quarterly, semi-annually, or annually, or rebalance when the  allocation is a certain percentage points away from its target due to the difference between funds in your 401k over time.
  5. Read your statements. “Not looking at your statement is like throwing away money.” – says Anderson. Take the time to learn and understand what your statements are telling you especially in terms of the expense ratio and fees for each mutual fund in your account. “Did you know that just 1% in fees and expenses reduces your account balance at retirement by 28%, eating away your returns?”

An all Ipad classroom

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One of my questions about this is why does it always seem like a good idea when it comes to technology? I think its especially true when it comes to Apple products. They like to market themselves much like coke, as an itegral part of ones happiness and all good times. The commericals for the current ipad make it seem like you if you don’t use apple products then you don’t love your family or that with an iphone you have unlimted power to control the universe. Neither of which are true. One is a big phone that doesn’t make calls, the other is small phone. But let me get off that soapbox and get to this:

Apple hopes its foray into digital textbooks for the iPad will impress educators and corner a huge, lucrative K-12 book market. But the high costs of the plan and the challenges of mobile technology could ensure that hardback books remain a classroom mainstay.

Read more here: http://www.bellinghamherald.com/2012/03/11/2431762/a-move-toward-an-all-ipad-classroom.html#storylink=mirelated#storylink=cpy

My issue with this is that the underlying costs are actually greater. They don’t actually let kids take home books right now, but books are great because they are durable, long lasting with normal usage and they don’t require electricity and it hard to break a book. Ipads require mainaintence, a delicate touch and electricity. The discounted rate for an iPad is hardly a discount, and a school could get two computers for the price of one iPad (which makes perfect sense because no school in their right minds would allow a rented or purchased iPad to go home with the a child).
In summary I am against iPads in the classroom mostly because its financially irresponsible when the information that you need to teach is readily available in a more durable and cost efficient form. The encouragement of needless electronic proliferation because educators want to cater to students is an act of appeasement, and that never works.