Monday Morning Boost

When deciding how to pay down your student loan debt you can always shoot for student loan forgiveness. Or, you could invite billionaire tech investor Robert F. Smith to deliver your commencement address. Around 400 seniors received a surprise at Morehouse College this month when Mr. Smith dropped the news that he’d be paying off the student loans for every graduate in attendance. This gift is estimated to be somewhere in the neighborhood of $40 million. Marketwatch has more on this here.

With over $1.56 trillion in student loan debt, this is definitely one way to end the crisis.

What I’m reading today:

Inside the Nationwide Effort to Encourage Students to Take College Credits - While Still in High School

10 Versatile College Majors that Eliminate the Need to Decide Early on a Career Path

Spoiler:

1. Business administration and management 
2. Marketing 
3. Psychology 
4. Economics 
5. Finance 
6. Political science and government 
7. Communication 
8. Computer science 
9. Information technology 
10. Sociology 

Have a great week!

Week In Review

Week In Review

The trade dispute with China was the toast of the town for the second week in a row. With all of the rhetoric out there right now the biggest question I have is what is the real cost of tariffs on Chinese imports? Let’s think about this. Tariffs are a tax. Last year we paid $5.51 trillion in federal, state and local taxes. The new increase in tariffs is the equivalent of a $30 billion tax increase. Which sounds like a lot on its own. But not a lot when you compare it to the $5.51 trillion we’re already paying.

Marketwatch has an opinion piece here that goes in to more detail.

Perhaps the silver lining here is U.S. Treasury Secretary Steven Mnuchin said the U.S. was "close to an understanding with Mexico and Canada" about resolving those tariffs. And, the Trump administration is likely to delay tariffs on auto imports.

What I’ve been reading:

You’ve graduated and now it’s time to pay your student loans. Where do you begin? Some of your loans are subsidized, some are unsubsidized. You have some that are private loans and others that are direct federal loans. Which do you pay off first? Student Loan Hero has a great blog post on this topic here.

The final episode of HBO’s Game of Thrones airs this weekend. If you’re wondering what details you might have missed in last week’s Episode 5, CNET has just the article for you here.

Something to think about. When is the last time you looked at the investments inside of your kids (or grand kids) 529 college savings plan? You typically have three options when you set these plans up. You can invest based on the amount of risk you want to take, the age of your kid, or through a customized portfolio you designed yourself. With the volatility in the market over the last two weeks it could be a good time to revisit your investments and make sure they are still appropriate. If your kid is getting ready to go to college and their 529 is invested predominately in the stock market then the last thing you want is to be caught off guard with prolonged market volatility.

College, Having "The Talk"

College, Having "The Talk"

"The Talk." You know the one. It has stressed out parents and mortified kids since time began. Our daughter isn't even old enough for "the talk"and I'm already stressed about it.

It’s uncomfortable. But we do it because it’s necessary.

Yet we don’t talk finances with our kids. Or with our parents. Why? There’s no way that a conversation about money can be more uncomfortable than “the talk.”

What do we lose by not talking about money?

When it comes to college, the answer is A LOT.

When we buy a home we get pre-approved before we start shopping. But with colleges we do the exact opposite. Doesn't it make more sense to put together a college budget and talk money with our kids ahead of time? If we don't, we risk waiting for our kids to apply and get accepted to their dream school before we discuss money. And then we run the risk of telling them it isn't in the budget.

“The Talk.” It isn’t just for kids. We need to have it with the grandparents too.

Checks grandparents write for tuition or withdrawals they make from 529 plans are considered student income. And up to 50% of this amount could count against the students eligibility for need-based aid.

The same is true for up to 20% of any money grandparents have saved in a custodial account for the student.

Be proactive. Don’t wait until you fill out the FAFSA your kids senior year to find this out.

It’s uncomfortable. It’ll cause anxiety. But having the “college talk” with kids and grandparents could save a lot of trouble down the road.

Market Wrap-Up: Week of 4/28/2019

Market Wrap-Up: Week of 4/28/2019

Markets Year-to-Date: DJIA: +14.93%/ S&P 500: +18.5%/ Nasdaq: +23.99%

Data Dump: Consumer confidence is up (+5 points), businesses are hiring, wages are moderately increasing (+2.9%), and unemployment has decreased to 3.6%.

Blurred Lines. The Federal Reserve met on Wednesday and decided not to make a change to their interest rate target (target remains at 2.25% to 2.50%). This sent the markets in to a tailspin with the S&P ending the day down -0.75%. Blame it on poor communication. The Feds statement after the meeting seemed to indicate the possibility of a rate cut as core inflation has declined and is now running below 2%. However, in Chairman Jerome Powell’s post-meeting press conference, he repeatedly stated that “the decline in core inflation is due to ‘transient’ factors”. Essentially, he does not see the decline in inflation continuing which supports his wait and see attitude towards interest rate changes.

The Fed’s job, and it’s autonomy, has not been made easy by President Trump, who continues to politicize monetary policy.

Market Wrap-Up: Week of 4/21/2019

Market Wrap-Up: Week of 4/21/2019

Good afternoon everyone. In case you missed it, here’s what happened in the markets this week. Earnings season is officially underway, and it’s like Christmas and Halloween all rolled into one. Facebook stock rose 9% in after-hours trading on Wednesday following their first-quarter earnings report. The company exceeded revenue expectations despite the Federal Trade Commission’s ongoing inquiry. And then there’s 3M. On Thursday the industrial giant cut it’s 2019 earnings estimates and revealed plans to lay off 2,000 workers. This sent the stock price down 13% and brought the overall Dow Jones Industrial Average down with it.