How to Plan for College Expenses
August 29th, 2014
With the school year quickly approaching, paying for college expenses is likely on the minds of many families. If you’re currently saving for that large expense, it is probably taking up a significant portion of your disposable income. Or maybe you’re a grandparent that has earmarked a portion of your liquid assets to help provide the capital to cover tuition for your grandchildren. Of course, some kids will receive scholarships, but others must use financial aid that will leave them graduating college with a debt burden that they will repay with a future income.
In this recorded webinar, Nate Butler will discuss how to use the family banking system to successfully pay for the monumental costs of a College Education.
To view this recording, click here.
From “ABC” to MBA in a Hop, Skip and a Jump!
August 28th, 2014
On the first day of school, for your little bright-eyed wonder, there are all the traditional reasons to cry. “Look how fast they’re growing! They’ll be off to college before you know it!” And there are the not-so-traditional reasons to cry. “How am I ever going to pay for that?”
The first and most important answer, of course, is to START NOW! If you start preparing for the first day of freshman orientation on the first day of kindergarten, most of your tears will be shed on the “goodbye.” If you wait until high school graduation day, you risk waving your child’s education goodbye, instead.
A four-year college education, today, is notoriously high. Outrageously high. And if you have more than one child…
Let’s examine some average costs. For a public college, the annual cost for tuition, room and board, fees, books and supplies is $12, 841, per year. For a private college, the cost jumps to $27,677, per year. And if your child is fortunate enough to be accepted at one of the Ivy League colleges, well, congratulations, the cost, per year, is now $36,604.
Keep in mind that these costs do not include travel, clothing, additional food, entertainment, houseware necessities, “call your mom”telephone bills and the additional “must-haves” like a new laptop, iPhone, iPod, iPad and other “iWants” that all their friends have.
So let’s include an additional $5M – $8M (depending upon distance of transportation, number of allowed visits home, appetite for pizza, fashion and high-tech toys) and multiply that grand total by four years. Whew.
However, in reality, for every child that wants to go to college, there is a seat waiting and a way to place him in it. Along with the traditional savings and investment plans, there the 529 college plan, which is similar to an IRA or 401k, and the Parent PLUS loan, set at a higher fixed rate of 7.9% but easy to obtain and with flexible re-payment schedules and a possible loan-forgiving aspect, as well.
Additionally, there are federal student loans, grants, scholarships and even some college-offered low interest payment plans.
But while you’re shopping for your children’s future, just a word of caution regarding two popular borrowing practices that might incur more downsides than the upbeat solution you expected.
First, a home equity loan could, actually, result in the loss of your house if you can’t pay the loan when it comes due. And you could wind up owing more than your home is worth if the real estate values drop, in your area.
Secondly, with an early withdrawal from a traditional IRA, there will be an income tax payment due, on the full distribution, less actual cash for college and a permanent loss to your retirement fund.
Perhaps the best lesson you might offer your future college graduate is your smart and savvy choice in how you finance their college education!
To learn more about Infinite Banking and what it can do for you, log in to Infinite 101!
Benefits of Permanent Life Insurance
August 26th, 2014
Be sure to check out Infinite 101 for additional education.