Category Archives: Financial Success

Mar 11 2014
3 Comments
Financial Success, Successful Kids

Who Pays for College and How?

During senior year of high school my Dad pushed for a decision on what I would go to college for. I had ABSOLUTELY no idea. Knowing I liked to tinker with electronics, he said “Here are 2 options; electronics and computer programming.” I said, “Well, let’s go with, um, ahhh, hmmm…Computer Programming.” The options presented were at what is now called Northern Maine Community College.

We are taking a similar approach with our kids. That is, having them start at a local / community college and we “foot the bill.” There are numerous benefits, including:

  • It being much easier to “pay as you go” (loan free)
  • There are no (additional) expenses for room and board (although these boys are eating a whole lot more!)
  • When an early mistake is made (i.e., a class must be retaken) it isn’t too painful/costly
  • Provides an opportunity to try things out (college as well as the field of study) to get their feet wet and determine if this is truly the direction they want to go, making a change in direction less painful/costly
  • Credits from community college can be transferred to 4-year colleges saving 10’s of thousands of dollars!!!
  • Bottom-line: Provides a foundational college education with no loans hanging over their head

Once they have achieved an Associates Degree, and possibly a Certificate or two, a decision can be made regarding the continuation of that education. This is where they begin “footing the bill.” I’m willing to co-sign for loans, but they take ownership of this next level of investment in their education — if they choose to continue. This includes continuing to maintain a job to cover their living expenses and to begin making payments on their newly acquired school loans (while still in school). This approach is working well so far; 3 in process, 1 to go 🙂

While I may have “only” achieved my Associates Degree I took advantage of EVERY training opportunity provided by employers and have consistently invested (out-of-pocket) in continuous education — in many forms. The result: Achieving “only” an Associates Degree hasn’t held me back in the least.

Make no mistake, I believe that a solid education is crucial! My experience is that it isn’t “so much” the degree achieved or the college attended, but what you do with that degree and how you continue your education — FOREVER!

A few pointers related to college-related books, as they are EXPENSIVE! Once your student has their list of classes they can find out what books are needed for each – from their teacher. NOT the school bookstore. Go to Amazon.com to acquire these vs. the school bookstore and you will save a great deal! Then, monitor the use of the books after classes have begun. There have been numerous cases for our kids when the teacher indicates “This is recommended reference material, but we really aren’t going to use it.” When you observe this, send it back to Amazon for a refund!

Economists report that a college education adds many thousands of dollars to a man’s lifetime income – which he then spends sending his son to college. ~ Bill Vaughn

Please feel free to reply with strategies you’ve found effective for helping your kid(s) through the process of acquiring a college education, without you taking on debt to do so. And, please feel free to forward this along to anyone you feel may benefit.

Feb 23 2014
19 Comments
Financial Success

Raise the Bridge or Lower the Water?

Financial independence involves raising the bridge (increasing income) and/or lowering the water (decreasing expenses). You can get there by taking either approach, but the path is MUCH shorter if you work it from both ends. We’ll talk later about raising your income (this takes a bit more time). Lowering your expenses, however, can begin RIGHT NOW.

A key factor to financial independence is not so much how much we make, as it is how much we keep.

There are a number of measures we can take right now to lower expenses. A first good step is to look at those (discretionary) expenses that are on auto-pilot. That is, we’ve subscribed to a service for which we are charged (automatically) each month.

Where I’m about to go some might consider sacrilegious. Chill – It takes guts (and many small steps) to achieve financial independence 🙂

We are too often “tricked” into the sales pitch (or excuse) that “it only costs $90 per month.” Let’s do some math. What is $90 times 12 (months)? Because I hate math, let’s just simplify and say this equals $1,000. That is $1,000 per year for that small expense. Let’s keep going…What is $1,000 times 10 (years)? $10,000. The question we must ask ourselves is “Am I willing to invest $10,000 in that small expense?” Make no mistake, those 10 years will pass (much faster than we think). Would we rather have the $10,000 to invest for our retirement, go on an exotic trip, pay (cash) for a portion of our child’s education? I certainly would rather have the $10k for those “options.”

What might that small expense be (for you)? One of them, for me, was cable TV. I’ll talk (freak some of you out) about others later.

One day I came home from a hard day’s work and saw my family sitting around the one-eyed monster (TV). I said, “Why am I working to pay for people to sit around my house killing time.”

I had recently talked to a good friend of mine (Mike) who conducted a science experiment. He put one of those antenna things on top of his house and was receiving digital signal “over the air” for several networks (including ABC, CBS, NBC, FOX and MORE)! I like to tinker with stuff, so I did my own science experiment (put up an antenna). And, it worked!!! I cut the cord with the cable provider almost a year ago. We no longer pay for air. I mean, it is free, all around us…

Yes, for a few weeks there were some “awe dads” to the effect of “you are ruining my life.” Being fair, there were some available options…Someone else in our household could pay for cable service, but it was NOT going to be me.

A common/fearful question is “will I miss the big games?” NO. The channels we receive broadcast (via crystal clear digital signal) the Superbowl, World Series, Olympics, etc. To be fair, we do subscribe to Netflix for a mere $7.99 a month which provides a TON of additional content (TV series, movies, documentaries, etc.). And, there is a bunch of free content available over the internet.

In summary, if we think short-term “it is only $90 per month” we are losing sight of the bigger picture (and impact on our financial future). The suggestion here is to take a look at your discretionary expenses that are on auto-pilot. It becomes too easy to let a company draw on your net worth. Frequently (every few months) review these to determine if there are opportunities to reduce or eliminate any. Doing so is a crucial step towards shortening your path to financial independence!

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