Monday Morning Boost

What I’ve been thinking about-

One of the biggest mistakes I see parents make is not actively trying to reduce the net cost of college because they have been diligent in saving and think they have enough set-aside. And chances are, they do. But, how could their student's life be impacted if they were to do a little planning and make some smart money moves during the college selection process? If, for example, they were able to tweak their AGI to increase the number of tax scholarships available to them by $10,000 over four years, or decrease the net cost of college by the same amount, the impact could be significant. That's $20,000 that can stay in savings and be used for their future grandkids' college. And, if this money grows at an average of 7% over 25 years, that's over $100,000 set aside for the next generation's college tuition.

Articles I’m reading-

Finally, students can comparison shop the cost of their college majors. The Department of Education expanded the College Scorecard to include data on the average level of debt for individual programs.

Big Hat, No Cattle: Money Lessons From The Millionaire Next Door .

Have a great week!

Week in Review

Keep calm and brace for trade impact. What will the newest round of tariffs cost US households? The Federal Reserve Bank of New York estimates this cost to be around $831 a year. Or, the price of a new Xbox and 4K TV. But who’s counting. This latest figure does not take into account China’s newest tariff increases on US goods set to begin on June 1.

More on this here.

Silver linings. While this week marks the fifth straight weekly loss for the Dow, it also represents a great time to potentially do one of two things. A.) Harvest losses in your taxable accounts to offset your capital gains. B.) Rebalance your portfolio (use proceeds from some of your best performing investments to purchase shares of your investments hit hardest by the last few weeks at a discount).

Brexit. While Britain has yet to find a way to leave the European Union, they have found a way to remove Prime Minister Theresa May from office. Effective June 7, the U.K. Prime Minister will be stepping down.

Still confused on what Brexit means? BBC News has an article with everything you could ever want to know on the topic here.

What I’m Reading:

Did you know that Australia hasn’t had a recession in 28 years? Barron’s has a great article on why the US isn’t slowing down either: The U.S. Economic Expansion Is About to Break Records. Can It Last?

Unhappy with how Game of Thrones ended? One fan decided to do their part by creating a petition you can sign here.

Staying ahead of the game. People spent $1.9 billion last year on apps to keep their brains sharp as they age — here’s what actually works.

Have a great Memorial Day weekend everyone. We’ll see you next week!

*These are the general views of Stanton Burns and they should not be construed as investment advice for any individual. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Stanton Burns does not maintain positions in any securities mentioned as of the writing of this article. Past performance is historical and does not guarantee future results.

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.