In the language of admission and financial aid offers, a scholarship and a grant are basically the same thing. Each is considered "gift aid" which means they do not need to be paid back. However, this doesn't mean there aren't some "strings" attached. Many scholarships and grants require the recipient to focus study in a particular major. Others have a grade average requirement to keep the scholarship or grant over the college experience. Students need to make certain they know the conditions under which they accept and can maintain gift aid.
NICCP
Sunday, October 26, 2008
Monday, October 20, 2008
College Savers Stuck?
While parent's invested in 529 plans were wondering how they were going to pay for college a Wall Street Journal article directed at these investors said "Don't Panic!" However, no guaranteed solutions were provided. Keep your options open the article suggested and make sure that you are in a position not to miss out on future stock market gains. The big question is when will these gains come. Is there enough time? College savings is usually accomplished in a relatively short period time. It took the stock market 25 years to recover from 1929. On September 3, 1929 it hit a high of 381. On July 8, 1932 the low was 41. It took until November of 1956 for the market to reach 381 again.
With 529 plans, investors put after-tax dollars into an account that typically offers a range of mutual funds and other investments. Distributions and earning are tax free, as long as they're used for qualified higher education expenses.
The College Plan uses a different approach on how to best pay for college. It is called the Fillmore Hill Plan. In the decades prior to the early 40's, counter balance cars (1/2 trolley car and 1/2 cable car) took passengers up and down San Francisco's Fillmore Street. One car would go down so another car could come up the other side. This college savings program works in a similar manner. Using the Money Merge Account system, the mortgage balance goes down at an accelerated pace while equity goes up at a much quicker rate because less interest is being paid. The goal of the program is to pay off the mortgage prior to start of college so that the dollars that paid the monthly mortgage can be used for college. If this is not possible because of the lack of time, additional strategies may be used if financially feasible.
Homer Sweeney
With 529 plans, investors put after-tax dollars into an account that typically offers a range of mutual funds and other investments. Distributions and earning are tax free, as long as they're used for qualified higher education expenses.
The College Plan uses a different approach on how to best pay for college. It is called the Fillmore Hill Plan. In the decades prior to the early 40's, counter balance cars (1/2 trolley car and 1/2 cable car) took passengers up and down San Francisco's Fillmore Street. One car would go down so another car could come up the other side. This college savings program works in a similar manner. Using the Money Merge Account system, the mortgage balance goes down at an accelerated pace while equity goes up at a much quicker rate because less interest is being paid. The goal of the program is to pay off the mortgage prior to start of college so that the dollars that paid the monthly mortgage can be used for college. If this is not possible because of the lack of time, additional strategies may be used if financially feasible.
Homer Sweeney
How Much Is A Trillion?
It is hard to imagine that the financial system will return to the way it was before this present crisis in which $8.4 trillion has been lost in the stock market. According to a report released by the Urban Institute, a nonprofit research and educational group, in the year ended September 30, 2008, retirement accounts in the United States had lost 18.3% or $1.6 trillion of their value from September 30, 2007. If you start to think about a trillion dollars, it's nothing short of mind-blowing.
Imagine a $1.00 bill, the one with George Washington's picture on it.
* A stack of $1.00 bills 1 inch high would be worth $250.
* A stack of $1.00 bills 4 inches high would be worth $1,000
* A stack of $1.00 bills 4,000 inches high would be worth 1 million dollars
* A stack of $1.00 bills 4 million inches (63 miles) high would be worth $1 billion
* A stack of $1.00 bills 4 billion inches (63,131 miles) high would be $1 trillion.
If you broke this stack into smaller ones, you could have 11,480 stacks as high as Mount Everest.
Imagine a $1.00 bill, the one with George Washington's picture on it.
* A stack of $1.00 bills 1 inch high would be worth $250.
* A stack of $1.00 bills 4 inches high would be worth $1,000
* A stack of $1.00 bills 4,000 inches high would be worth 1 million dollars
* A stack of $1.00 bills 4 million inches (63 miles) high would be worth $1 billion
* A stack of $1.00 bills 4 billion inches (63,131 miles) high would be $1 trillion.
If you broke this stack into smaller ones, you could have 11,480 stacks as high as Mount Everest.
Early Decision vs. Early Action
As one applies to college, something that may come up is Early Decision and Early Action. Be sure to know the deadlines and how each college defines these terms. Typically they are defined as follows:
Early Decision:
* Your absolutely agree to attend that college if accepted
* You may only apply to one college in the method of Early Decision
* You apply in October or November and receive an answer in December
* You may apply to other colleges under the regular process
* If accepted, you must withdraw all other applications from other schools
* You will typically be required to give a nonrefundable deposit by May
Early Action:
* Similar to Early Decision, however, not binding
* Apply in October or November and receive an answer by December
* If accepted, you may commit then or in the Spring
* May apply to other colleges under Early Action as well
* May apply to other colleges under regular admissions process.
NICCP
Early Decision:
* Your absolutely agree to attend that college if accepted
* You may only apply to one college in the method of Early Decision
* You apply in October or November and receive an answer in December
* You may apply to other colleges under the regular process
* If accepted, you must withdraw all other applications from other schools
* You will typically be required to give a nonrefundable deposit by May
Early Action:
* Similar to Early Decision, however, not binding
* Apply in October or November and receive an answer by December
* If accepted, you may commit then or in the Spring
* May apply to other colleges under Early Action as well
* May apply to other colleges under regular admissions process.
NICCP
Sunday, October 19, 2008
What Admissions Counselors Expect To See At Colleges That Accept Less Than 30%
The ten most important things that admission counselors expect to see at colleges that accept less then 30% of their applicants are as follows:
1. High level of performance from freshman year on: Develop strong academic, language, mathematics and critical thinking skills by taking challenging courses showing consistent improvement and classroom participation. No senioritis.
2. Strong standardized test results: i.e. SAT 1 - 2100+, ACT 32+
3. All AP Classes: Applicants will have been expected to have taken all available AP courses. Test scores should be at 4 --- preferably 5.
4. Meaningful Extra Curricular Activities: One maybe two activities that the student has shown serious interest and ability pursuing is very helpful to round out the application. Ideal activities will show strong leadership, follow through and organizational and /or creative talent as well as purpose and breadth.
5.Well Written Essays: This is called on many applications the "Personal Statement" for a reason. The ideal essay would leave the reader with a desire to meet the applicant. It is an opportunity to let the admissions counselor know something personal about the applicant. For assistance contact Kristine Fox at krisfox@verizon.net. UC assistance http://www.ucgateways.org/
6.. Interesting Interviews: Admissions counselors will play down the importance of these interviews in the final decision. Don't you believe it. Make sure the student has researched the school policies, curriculum and academic profile. Be well dressed but do not over do it. Have questions ready that are preferably related to their possible area of academic concentration.
7. Flawless Applications: How questions are answered in the applications are crucial! This is where bright applicants in a rush to meet a deadline and "get through with it all;" respond too hastily to important questions.
8. Personal Factors: This is the admissions counselor effort to diversify the student body and construct a class that will have a particular geographic, ethnic, social economic and talent mix.
9. Demonstrate Interest: The DI could begin way back in the first half of the junior year. We encourage personal communication between the student (not mom) and the college as early as the last half of the junior year. Students should not over do it. Nor should they email queries to colleges that are easily learned on the college's website.
10. The "hook": When all else fails, this could be an applicants saving grace. It could be an exceptional accomplishment, athletic skill, musical talent or a wealthy relative who needs a good reason to gift the old Ivy Tower.
Eric Goodhart
Smart College Planning
1. High level of performance from freshman year on: Develop strong academic, language, mathematics and critical thinking skills by taking challenging courses showing consistent improvement and classroom participation. No senioritis.
2. Strong standardized test results: i.e. SAT 1 - 2100+, ACT 32+
3. All AP Classes: Applicants will have been expected to have taken all available AP courses. Test scores should be at 4 --- preferably 5.
4. Meaningful Extra Curricular Activities: One maybe two activities that the student has shown serious interest and ability pursuing is very helpful to round out the application. Ideal activities will show strong leadership, follow through and organizational and /or creative talent as well as purpose and breadth.
5.Well Written Essays: This is called on many applications the "Personal Statement" for a reason. The ideal essay would leave the reader with a desire to meet the applicant. It is an opportunity to let the admissions counselor know something personal about the applicant. For assistance contact Kristine Fox at krisfox@verizon.net. UC assistance http://www.ucgateways.org/
6.. Interesting Interviews: Admissions counselors will play down the importance of these interviews in the final decision. Don't you believe it. Make sure the student has researched the school policies, curriculum and academic profile. Be well dressed but do not over do it. Have questions ready that are preferably related to their possible area of academic concentration.
7. Flawless Applications: How questions are answered in the applications are crucial! This is where bright applicants in a rush to meet a deadline and "get through with it all;" respond too hastily to important questions.
8. Personal Factors: This is the admissions counselor effort to diversify the student body and construct a class that will have a particular geographic, ethnic, social economic and talent mix.
9. Demonstrate Interest: The DI could begin way back in the first half of the junior year. We encourage personal communication between the student (not mom) and the college as early as the last half of the junior year. Students should not over do it. Nor should they email queries to colleges that are easily learned on the college's website.
10. The "hook": When all else fails, this could be an applicants saving grace. It could be an exceptional accomplishment, athletic skill, musical talent or a wealthy relative who needs a good reason to gift the old Ivy Tower.
Eric Goodhart
Smart College Planning
$28 Million in Cuts for UC Berkeley
The Wall Street Journal reports that according to administration officials the University of California, Berkeley faces $28 million in cuts or unavoidable cost increases for the academic year that began in July. But the real bad news is that starting in July of 2009, the faculty and staff have been told to expect to make contributions to their pension funds for the first time since 1990. Can you imagine contributing to your own retirement fund? Things can't get much worse!
Homer Sweeney
Homer Sweeney
The Bailout
There is, in any commerically advanced country, three layers of debt, government debt, the debt of banks and businesses, and finally, private consumer debt (e.g. your mortgage, student loans, car loans, credit cards, etc). The bailout legislation simply transfers the debt problem from the banks and businesses to the government. The printing presses will be working overtime meaning that your money will be worth less. It's called the hidden tax. Even sharing in 5% of "Joe the Plumber's" profits will not be enough. The government is not going to bail you out. Getting out of debt is going to be your responsibility. How long will take you? Will you be debt free by the time you retire? Is the Money Merge Account for you? Start planning now. Don't wait! Get a free analysis today.
Homer Sweeney
Homer Sweeney
Monday, October 13, 2008
This Date in History
October 13, 2008 is the 91st anniversary of "Miracle of the Sun" which was the basis for a 1950 Warner Brothers film. Can you name this picture? Homer Sweeney
The 3b Approach to Retirement
Last week the first question asked at the "town hall" presidential debate was about individual retirement accounts. Neither candidate came close to answering the question. If I was a candidate here is how I would have replied.
Individuals are responsible for their own retirement. Government helps by providing tax incentives to encourage investing. The financial industry has provided a variety of ways to accumulate funds for retirement during your working years. However, the potential dangers and pitfalls have not been communicated very well as witnessed by the reaction to the current stock market decline. There are three major risks that could cause havoc with your retirement account.
1) Sharp decline in the stock market for those near retirement or retired.
2) Expanded life spans. If you live longer, your money needs to last longer, too.
3) Steep inflation.
With these three risks in mind, it's important to carefully and thoroughly review your approach to retirement. One simple method suggested is called the 3b or 3Bucket Approach. The goal is fill each of the three buckets:
1) Build Your Home Equity Bucket by paying off your mortgage a quickly as possible. This can be accomplished by using the Money Merge Account program which allows people to pay off their mortgages in a shorter period of time without any increase in payments of change of lifestyle. Once paid off this money can be used to further build your nest egg and guaranteed income buckets. Owning your home free and clear during retirement provides great protection against inflation and unexpected financial emergencies.
2) Build Your Guaranteed Income. Social Security provides a base for guarantee income. Is it enough for you? Or do you need to build this bucket? This bucket will provide income for life for you and spouse and lessen the dependence on the nest egg bucket.
3) Build Your Nest Egg Bucket. The financial experts suggest that you continue to contribute to your 401(k) and IRA as the law allows. The theory being that your monthly contributions will buy much more now with the market depressed and when market rises again it will carry many more stocks or units with higher value so that over time you will recover your losses.
The market drop devastated millions of Americans because they counted too heavily on their 401(k)s. Build your home equity and guarantee income buckets then in future market drops your retirement will be hurt but will not be devastated.
Homer Sweeney
Individuals are responsible for their own retirement. Government helps by providing tax incentives to encourage investing. The financial industry has provided a variety of ways to accumulate funds for retirement during your working years. However, the potential dangers and pitfalls have not been communicated very well as witnessed by the reaction to the current stock market decline. There are three major risks that could cause havoc with your retirement account.
1) Sharp decline in the stock market for those near retirement or retired.
2) Expanded life spans. If you live longer, your money needs to last longer, too.
3) Steep inflation.
With these three risks in mind, it's important to carefully and thoroughly review your approach to retirement. One simple method suggested is called the 3b or 3Bucket Approach. The goal is fill each of the three buckets:
1) Build Your Home Equity Bucket by paying off your mortgage a quickly as possible. This can be accomplished by using the Money Merge Account program which allows people to pay off their mortgages in a shorter period of time without any increase in payments of change of lifestyle. Once paid off this money can be used to further build your nest egg and guaranteed income buckets. Owning your home free and clear during retirement provides great protection against inflation and unexpected financial emergencies.
2) Build Your Guaranteed Income. Social Security provides a base for guarantee income. Is it enough for you? Or do you need to build this bucket? This bucket will provide income for life for you and spouse and lessen the dependence on the nest egg bucket.
3) Build Your Nest Egg Bucket. The financial experts suggest that you continue to contribute to your 401(k) and IRA as the law allows. The theory being that your monthly contributions will buy much more now with the market depressed and when market rises again it will carry many more stocks or units with higher value so that over time you will recover your losses.
The market drop devastated millions of Americans because they counted too heavily on their 401(k)s. Build your home equity and guarantee income buckets then in future market drops your retirement will be hurt but will not be devastated.
Homer Sweeney
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