How lucky am I?
September 12th, 2007
Here’s what my sixth grade son wrote for a school project his week. I’d say I’m pretty lucky - thanks Pal
My Hero
A hero by definition is a brave or good person. My dad is my hero because I think he is a good person. My dad takes care of me, my mom and my sisters. He loves us and cares for me and teaches me how to be good person. He helps me with my activities and my school work. My dad has coached my baseball team and always tells us that the most important lesson to respectful of each other and the other team. He says don’t be afraid no matter what life gives you. He teaches me to work hard and to follow my dreams. I hope I grow up to be like my dad.
Site of the Week: Just One Club Card
June 23rd, 2007
Sick of carrying around too many cards in your wallet? Condense those numbers onto one card.
Go to Just One Club Card
How much money will I need in retirement?
May 17th, 2007
The average American household will save 58% of their income for retirement according to a Fidelity Resarch Institute Research report. BUT only 23% of those surveyed think they are saving enough. Not that we have cleared that up - assume 75%-100% depending on the type of lifestyle you want to live.
Simple Investing - Check your investments quarterly (or buy index funds)
April 29th, 2007
I paraphrased the title from this NY Times article by Mark Hulbert. He summarizes a recent academic study which explains why high performing managed funds can’t regularly beat the market (because investors move to much money to the managers and they become too big to effectively invest all that money). So the approach you should take is:
1) define an asset allocation model for yourself
2) find 1-2 funds for each part of the portfolio - use morningstar to find funds; use index fund if you don’t find a spectacular fund that you must have
3) review your funds results quartely; if you have a non-index fund that is not in the top 20% of performance for that class, dump it (watch out for penalties for selling to soon after you purchased)
4) rest assured that you are doing just as well as the guy who is paying .75% to 3% to have his money managed.
Book Review: “The Miracle of St. Anthony” by Adrian Wojnarowski
April 20th, 2007
I just finished this book about Bob Hurley and the 2004 St Anthony’s Friars. Hurley is a legendary high school basketball coach from Jersey City, NJ. This is a really nice book to read. It doesn’t go overboard on basketball details. It is a nice story about the 2004 team and provides a little insight into the people involved in making this team, struggles they face dealing with the inner city, and the challenges keeping a small private school running. A few things jumped out at me:
1) Behind every legend is a number of people making it all happen - there is no denying Bob Hurley’s outstanding talent of developing basketball players, but more importantly developing young men who can grow up and lead independent and productive lives. BUT the sacrifice of his wife and children and the support of the school administration, assistant coaches and ’support’ staff are the real impressive thing. They get no credit, but make it all happen.
2) Positive re-inforcement? - Bob Hurley doesn’t appear to believe in the positive re-inforcement approach. On the outside he appears to be a ‘mature’ Bob Knight. BUT he clearly has a mission and a motive (besides winning basketball) for his aggressive and challenging nature. He wants to challenge these boys in a safe environment so that they can face (and win) the everyday challenges of life. Based on some of the stories in the book, he’s been very successful.
3) Talk about being lucky - as Bob Hurley says just after winning the State Championship “No one is happier about this than Adrian”, the author got a little help by the success of the 2004 team.
4) Teaching the best reward - it is really touching about the ‘reward’ adults feel after seeing the success of the kids they team in high school. My uncle is a junior high school teacher and I’ve never met anyone who loves their job more.
Book Review: “Franklin and Winston: An Intimate Portrait of An Epic Friendship” by Jon Meacham
April 19th, 2007
This a very well-written and informative book about the lives of Churchill and Roosevelt, and their relationship during the war. I recommend it to any who want to learn some history and learn a little more about these two great men. Arguably, two of the most important people of the 20th century. I was especially intrigued by Churchill - a passionate, energetic orator. How can you not like a guy who stood up to Hitler when no one else in Europe would, and then worried if there was enough beer for the British to celebrate on VE day?
Book Review: “The Big Bam: The Life and Times of Babe Ruth” by Leigh Montville
April 17th, 2007
This is another great book by Montville (but isn’t as good as the classic about Ted Williams). Babe Ruth had the perfect personality to be the patron saint of baseball. The ultimate kid who played on and off the field. If you are interested in learning about the Babe, this book provides enough stories and details to bring the times to life.
Thanks Jackie
April 15th, 2007
“A life is not important except for the impact it has on other lives.”
Reducing the costs of college
April 12th, 2007
I recently attended a unique presentation on paying for college. The speaker didn’t talk about savings or 529’s. He spoke primarily about strategies related to taxes, financing, and the colleges themselves.
Taxes (Please contact your tax advisor before embarking on these strategies)
- Asset Transfer - If a parent has an asset which have significantly appreciated since acquired (e.g., a stock owned for a long time) or has an extra income stream (e.g., rental property), then ‘gift’ the asset to your child. Your child will pay a reduced tax and then use the money to pay for college. Each parent is currently allowed to gift $12,000 per year to a child. This may require the child to be over 18 because current US tax law requires unearned income to be taxed at the parent’s rate for children under 18 or require that the child file separately and be dropped as a dependent on their parent’s return. AMT also needs to be considered in this case.
- Income Shifting - If a parent owns a business, the parent should employ their child and have the child you use that money to pay for college. The child will most likely pay at a reduced tax rate from the parent.
Finances
- Student Loan
- Interest only mortgage - Rather than a personal loan, re-mortgage your home with an interest only mortgage.
- Scholarships - start looking for scholarships during the sophomore year of high school. Some sites to investigate are finaid.org, fastweb.org, sscholarshipgrantguide.com, scholarshipcoach.com
Colleges have created a surplus of funds which they give to students in the form of Merit Aid. These funds are used by the university to entice students to attend the school. It is not related to financial need. 75% of college students get some type of merit aid. As a parent, you want to be in a position to call the college that your child really wants to go to (and has been accepted to) and say “My child really wants to to your school, will cost $10,000 less per year, what can you do for me?” Here are things you should do to increase your chances of merit aid:
- don’t be too aggressive in your pursuit of a college - too many calls, too many web sites visits (are they tracking?), too many interviews / tours, don’t enter you top school as your top choice on the SAT/ACT test - if you are too aggressive, they may deem you as not needing a financial incentive to attend their college
- apply to 6-10 colleges (via SAT / ACT testing process, colleges will know where else you apply)
- don’t apply early decision - this is a clear sign that this school is your primary choice (and therefore, the school doesn’t have to provide you aid in order to entice you to attend)
- apply to colleges which are ‘rivals’ to the college you really want to attend:
- academic, sports or regional competitors
- strong in-state competitor
- high quality school outside your region
- school where the student profile puts your child in the top quintile
- schools with lower enrollment yield (number of students attending as % of number of students accepted is low) - therefore they will need to incent their top choice to attend their college
One more gem: Colleges are faciliating the belief that 12 credits per semester is a tough road. This approach puts your child on the 5-6 year plan. Make sure your child is taking the right number of credits to finish school in 4 years, else your college costs will increase by 25%.
Site of the Week: 1-800-Free-411
April 8th, 2007
Ok, this really isn’t a site, but its a great service to save you some money. Call 1-800-FREE-411 or 1-800-373-3411 and get free 411 help for residential and business. Google is now offering a similar service for business only 1-800-GOOG-411.
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