5 roadblocks to financial success

A lot of people I work with and talk to on a regular basis share their deepest money fears, anxieties and concerns with me.  Most of them come to me feeling alone on their financial journeys, and lost about what to do next since they never received an adequate financial education growing up.  The confusion about how much to save, how to pay off your debt, what to invest in, how to balance saving and spending, what insurance is needed, how much to save for retirement, how to put aside money for your kids’ college education, etc. is something that we all struggle with.  What I’ve found is that the difference between those who have a solid financial foundation and achieve their financial goals are the ones who take the time to learn about personal finance and overcome the major roadblocks that everyone faces with their money.
 
I know you want to get to a place in your financial life where you have fun with your money, make more and save more of it, and invest more in your financial future.  I believe the best way to do that is through financial education and financial planning.  And my new Money Class will provide you with all the tools you need to help build a strong foundation for your financial life and ease any stress, worry or anxiety you have about your money.  It opens January 27, and I hope to see you in the class!
 
Until then, have a great day!
 
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Give Kids the Gift of College Success

BooksMoneyScaleDo you want to give your children the best possible chance to do well in college, earn higher salaries, and save more for their retirement? Then don’t pay for their college education.

One of the most popular money scripts I encounter is the notion that being a good parent means paying for your child’s college. Many parents do this at the expense of taking care of themselves in retirement, which is a very high price to pay.

The most popular reason I hear from clients for funding children’s’ education is empowerment. They want to spare kids the burden of repaying school loans after graduation. They also want them to be able to focus on their studies without the distraction of having to work to put themselves through college. For most parents, allowing students to concentrate on classes so they can perform well, make better grades, and obtain better jobs, is a sacrifice worth making.

There’s just one problem with this scenario. It’s a myth.

In most cases, parents who fund their kid’s’ college education are insuring they will actually do worse in school than those who have to pay their own way. This is the finding of new research conducted by Laura T. Hamilton, published January 7, 2012, by The American Sociological Review under the title “More Is More or More Is Less?” Her study shows that students whose education is funded by parents or through student loans actually have lower GPA’s than students who in some way must work to put themselves through school.

Hamilton found that students who have to “do something” requiring them to take personal responsibility for obtaining the funds for their education do best and carry higher GPA’s. This includes those who receive grants, scholarships, or veteran’s benefits, or who participate in work-study programs.

Parental funds or borrowing “provide the time, money, and proximity (i.e., living on or near campus) necessary to delve deeply into college peer cultures,” Hamilton notes. The gift of time that student loans and parental funding provide isn’t usually poured into studies. Instead, students tend to focus that extra time on increasing their social life. The average college student receiving money from loans or parents spends less time on studies in college than in high school. Even though they spend about 28 hours a week attending class and studying, the research found they devote a full 41 hours a week to social and recreational endeavors.

Put more succinctly, students who have to work to pay their way through college spend slightly more time studying and significantly less time partying.

The net result in this is a big personal and societal lose-lose. Those of you who have sacrificed your retirement to help your children through college have potentially done harm to both your children and yourselves. Your kids have probably done worse in college, thus obtaining lower paying jobs. This loss of potential income has downsides for both children and parents. Previous research has shown that parents who don’t fully fund their own retirement years will actually end up costing their children five times as much as the kids would have spent by funding their own college education.

Understandably, a few of you are now choking on your last sip of coffee as you read the last paragraph. This is not at all the outcome you intended.

The evidence is clear. Parents who take care of fully funding their own retirement instead of sacrificing to pay for their kids’ education are not being selfish. Instead, they give their children something far more valuable than the cost of tuition: the gift of success and achievement.

Rick Kahler

 

Rick Kahler is a Certified Financial Planner, President of Kahler Financial Group, author of the “Financial Awakening” blog, and a featured contributor on the CIF Blog.

How a $75 Parking Ticket Almost Ruined My Life

I was quickly on the path to becoming a loser all because of a stupid parking ticket.

That parking ticket made me initially lose hope and give up on myself.

It’s one of the few times in my life where I can remember saying out loud, “F*** it.  I quit!“.

You’re probably wondering how a trivial parking ticket could have such a drastic impact on my life.

Let me explain…..

******

My father was a college dropout and spent most of his life trying to make things work.

I knew that he was disappointed in his choices, and he didn’t want to see me follow suit.

He constantly encouraged me to go to school and get my degree. I had just enrolled in Santa Monica Community College, and
was looking forward to making my dad proud.

When it came time to pay for tuition and fees, I handed the school’s cashier my mom’s credit card. To my surprise and disappointment, they didn’t accept it because it wasn’t my card, it was my mothers.

I figured I’d just come back another day and pay.

A few days passed and I returned to the same cashier to pay, this time with a check. I was ready to get this over with. I just about puked when the lady told me that I had missed the deadline to pay and the classes had been closed.

I had been dropped for all of the classes I enrolled in.

Are you freaking kidding me? Did I really just allow this to happen?

I could not believe it. I was in denial and disbelief, and I just felt like crap.

Missed Tuition Deadline />I asked the cashier what my options were, and she said that I would have to go around to each class and talk to each teacher individually to see if there was any room in the class. She also gave me a warning that many classes now had waiting lists, so it would be even more difficult for me to get in.

Not Giving Up…Yet

At this time, I was still determined that I was going to school and I was going to get the degree that my father desperately wanted for me. So, I went around to each of the teachers to beg them to let me back in.

The first two teachers I visited gave me some disheartening news. The classes were full and the waiting list was already ten people deep in each class. They told me there was little hope for getting into the classes this semester.

Once again, I felt sick. I couldn’t believe that I allowed this to happen to me. I still had some hope that maybe some of the other classes would allow me in, and that maybe I wouldn’t be full time this semester, but I
would at least have some credits to my name to get things started.

I had this hope until I walked back to my car and found the $75 parking ticket that was on the windshield.

I found myself in another state of disbelief.

Of all the crap that I had gone through the past few days to now have a $75 parking ticket on top of it!

It was a low blow. At that exact moment, I remember saying out loud “<see expletive above>”

A $75 parking ticket took all the wind out of my sails, took all the motivation that I once had for getting my degree and threw it out the window.

When I think about the $75 parking ticket and how I let it control me and potentially sabotage my life and career.

I think about how stupid I was to let something so minuscule have such a large impact on my life.

Luckily, I did go back to college. I did finish my degree and because of that, and many other factors, I have proven to be very successful.

I think it’s
easily understood that without my degree I wouldn’t have attained nearly the success that I’ve had. I never would have gotten an internship to A.G. Edwards & Sons, Inc, which turned into becoming a junior broker, which then led to me becoming a financial advisor, which then led to me breaking off and co-founding my own independent firm, and then subsequently, creating my own RIA, Alliance Wealth Management, LLC.

None of that would have happened if I had not gone back to school and reapplied myself – and to think that I almost let a $75 parking ticket, a piece of paper about the size of a number ten envelope, dictate my future!

What little things in your life have you let get to you that have stopped you from pursuing your dreams and your passion?

When you take a look at them
in the big picture of your life, are they minuscule?

Is it ridiculous that you’ve allowed something so trivial to have such a tremendous impact on your life? If so, it’s not too late.

Do what I should have done (I should have taken that $75 parking ticket and paid it off and told them to shove it) and then get on with your life and pursue your dreams.

Visit the California Institute of Finance’s Website to learn more about our MBA In Financial Planning.

Jeff Rose (CFP)

 

Jeff Rose is a Certified Financial Planner, co-founder of Alliance Investment Planning
Group
, author of the “Good Financial Cents” blog and a featured contributor here on the “Advisor Blog”.

It’s Never Too Late to Get the College Degree You Deserve

College GraduateIt’s never too late to go back to school. Regardless of your age, you can still earn a college degree.

My father, who had previously been a college drop-out in his teens, went back to school at the ripe age of 55 and finally attained his bachelor’s degree.

It was one of the proudest days of his life.

Going to college costs a lot of money but this shouldn’t stop you from trying again!

You are also entitled to all the student loans for college students. To help you prepare, here are some things you should consider doing.

Evaluate yourself

You need to determine the course you want to pursue based on your interests
and the future job you have in mind. Most adults go back to school because they want to have better jobs after they graduate. Make sure that the program you’ll be enrolling in will lead to the job you’re aspiring for. Do not veer away from your passions because taking a course that doesn’t interest you will wear you down in the long run.

Look for a school

In looking for a school, take into foremost consideration if it offers programs accredited by the U.S. Department of Education. The department does not accredit schools but education programs.

Only accredited programs are eligible for the federal student aid. Compare tuition fees of different schools and look for the school that’s more affordable for you. Consider the retention and graduation rates of the schools as well. Ask if they have job placements after graduation, too.

Learn about the costs and aids

There are many financial aids available for incoming college students. You can apply for scholarships and
grants which do not require repayment. You can also opt for work-study which is a part-time program so that you can earn money while studying. You can also avail of federal loans or private student loans for your cost of attendance (i.e. tuition fees, room and food expenses, transportation, and other expenses).

Applying for loans

To apply for a federal loan, fill out the Free Application for Federal Student Aid (FAFSA). You also need your social security number and driver’s license. The other supporting documents you need are W-2 forms or other proof of income and federal income tax return. If you’re married, you can also include your spouse’s income documents.

It will also be helpful if you declare records of other untaxed income you received, such as welfare benefits, TANF, veteran’s benefits, military or clergy allowances, and social security benefits.

While in college

You
need to maintain satisfactory academic progress to remain eligible to your financial aid. To help you in your expenses, you can also apply for part-time jobs that fit your schedule. Consult with financial advisors should you encounter difficulty in paying your loans.

Do not let age hinder you from going to college. There are people who can assist you from the time you enroll up to the time you graduate. It’s never too late to achieve your dreams. With a college degree you have greater chances of getting a better job and providing a brighter future for you and your family.

For more information on student loans for adults, visit http://studentaid.ed.gov/PORTALSWebApp/students/english/index.jsp.

Visit the California Institute of Finance’s Website to learn more about our MBA In Financial
Planning.

Jeff Rose (CFP)

 

Jeff Rose is a Certified Financial Planner, co-founder of Alliance Investment Planning Group, author of the “Good Financial Cents” blog and a featured contributor here on the “Advisor Blog”.

The Burden of Student Debt

Student Loan DebtAccording to a recent New York Times article, based on a new study from Ohio State University and on data collected for the federal Bureau of Labor Statistics, graduating college students feel empowered by the debt that they graduate with. In fact, the more debt that they graduate with, the higher their self-esteem, and the more control they feel that they have over their lives.

Although counter intuitive, these results are consistent with earlier research. For these young adults, aged 18-27, the debts incurred to complete their education represent an “investment in their future”, and are therefore acceptable, or even something to be proud of according to Rachel Dwyer,
the study’s lead author, and assistant professor of Sociology at Ohio State University.

However, older respondents, those aged 28-34 who are further removed from their college lives, were beginning to show signs of stress about the money that they owed. These findings suggest that the reality of the costs and constraints of their debt were becoming more evident as they advanced further into their adult lives. They found that their ability to provide for their family, to save for their dream purchases, to buy a home, or to plan for retirement was still being affected by their student loans and college credit card debt.

Student loans play an important role in allowing many more students to attend college, pursue their dreams, and better their lives. The often pay for themselves over the years by creating the opportunity for higher wages and greater job satisfaction. However, they should not be taken for granted. Students need to remember that they are not “free” money and that they will
have to be paid for out of future earnings.