Tuition Bills and Indentured Servitude

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I just ran across an interesting method of covering your tuition bills in an article on alternative ways of paying for college. They offer a number of alternative methods for paying for your schooling, but by far the most interesting of these was a service called MyRichUncle.com.

There’s not a whole lot of information at their site — just a bunch of gibberish about their ‘revolutionary’ scoring system, yadda, yadda, yadda. But according to the BankRate article:

MyRichUncle provides money from private investors to college students who need help with education expenses.

In return, a student agrees to pay a fixed percentage of their gross future income for a fixed period.

“They pay less when they make less, ” says Raza Khan, managing director of MyRichUncle. “They pay more when they make more.”

This is an education investment not a loan, so there’s no interest to pay.

For every $1, 000 of financial help, a student agrees to pay 10 to 40 basis points of future income. A basis point is one one-hundredth of a percentage point, so someone who receives an education investment of $10, 000 might agree to pay anywhere from 1 to 4 percent of future income.

Payment periods are 10 years for graduate students and 15 years for undergraduate students. Payments begin six months after graduation.

Once the payment period ends, a student’s obligation ends even if you end up paying back less than you were given.

“We’re actually taking a chance on a student, ” Khan says. “If a student succeeds, we succeed.”

This sounds like an interesting idea, but I’m not sure how I’d feel about being an indentured servant once I got out of school. This is fundamentally different from standard student loans, as you don’t seem to have the ability to accelerate your payments to rid yourself of the obligation. I guess such a plan could have a weird sort of upside, though — if you end up in a low paying deadend job after graduation, you could come out far ahead in terms of the cost of your college education.


Tracking CDs with Quicken

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I love Quicken. I’ve been using it to track our finances since January 1, 1997. During that time, however, I have noticed a few shortcomings. Perhaps the greatest of these is Quicken’s lack of support for certificates of deposit.

It doesn’t seem like it could be that hard for Intuit to build in straightforward, intuitive support for something as basic as a CD but, for some reason, they didn’t. I’m not sure if this problem persists in the newest versions — I’m still using Quicken 2002 Deluxe — but a couple of years ago I came up with a good workaround. (more…)


Learning About Real Estate Investing

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I’ve recently gotten interested in real estate investing, especially with regard to rental properties. Unfortunately, I know hardly anything about it. Thus, I’m really in need of a good education. So before going any further, I thought I’d start by reading up on the subject to see if it really sounds like something I’d like to pursue. There’s a lot of info on the web, but much of what I’ve run across is pretty short and fluffy. (I’ve compiled a list of a few such articles below.) What I really need is a good book or two (or a few). The problem is that there’s about a million books on real estate investing. Okay, that’s a bit of an overstatement… But a quick search on Amazon reveals that there’s more than 800 books on the topic. (more…)


Saving for College

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I just ran across an article by Suze Orman on saving for your kids’ college education. Pretty run of the mill stuff, but good advice just the same. The take home lesson is that you need to prioritize your investment needs, and that you shouldn’t rank saving for college ahead of some other critical areas.

According to Orman:

“You need to listen up here: You must take care of your other financial needs before you save one penny for your kids’ college educations. That means getting rid of your high-rate credit card debt, contributing enough to your 401(k) to get the maximum company match, saving up for a home if you don’t yet own one, funding a Roth every year if you meet the income eligibility requirement (under $95, 000 for a single tax filer, $150, 000 for married couples filing a joint return), and saving up an eight-month emergency cash fund. And when all of that is done, go back and max out on your 401(k) contribution and save a bit more for retirement in a regular taxable account.”

While opinions vary on issues such as the size of your emergency cash fund (eight months is on the high side of most recommendations), Orman makes a number of good points, particularly with regard to retirement savings… After all, your kid(s) can always get financial aid to help pay for college, but the same can’t be said for your retirement.


Investing on Friday the 13th

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For all of you day traders out there… According to a recent CNN/Money article, you might want to try your luck investing on Friday the 13th. Over the past 50 years, the stock market (or at least the Dow) has performed better on this traditionally unlucky day than it has on a typical Friday.


Kids as a Tax Dodge

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I know that this comes well after tax season, but I somehow neglected to write up something about this sooner. Regardless, it’s never too late to plan for the future… So here’s my advice if you want to minimize your tax liability in the coming years: have kids (or have more kids). That’s right, the impact of kids on your tax liability is truly amazing! (more…)


FiveCentNickel on Reuters.com

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It was just brought to my attention by Ryan over at My Cashflow Blog that this site was mentioned in a Reuters article about personal finance weblogs along with the likes of All Things Financial, PFBlog, Frugal for Life, Seeking Alpha, and Sound Money Tips. Their take on what I’ve put together so far?

“Short and sweet and focused on family finances. Newish, so there’s not too much there yet.”

I’m both pleased and surprised to get this sort of attention within just ten days after launching this site. Thanks to everyone who’s been reading, as well as those who have been willing to exchange links with me. Thanks also to JLP at All Things Financial for plugging my site the other day.


Why Gas Won’t Get Cheaper

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The May 9th issue of Time magazine had an interesting article on why it is that gas prices won’t be getting any cheaper (you can also read it online; subscription required). Nothing terribly new here, but there are some interesting statistics, as well as a bit of investment advice. (more…)


A Small(ish) Citi Gotcha

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As you may have read in my previous entries (here and here), I’m a big fan of CitiBank credit cards and their generous rewards programs. This is not, however, to say that Citi is a credit card panacea. In fact, I just ran into one of their less obvious limitations during the past week. (more…)


Time is Money

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At last! I’ve spent the last couple of days racking my brain, trying to remember the name of personal finance book that forever changed the way I think about money. After a good while browsing on Amazon tonight, I finally found it. But first the backstory… It was the mid-90s, I was in graduate school, and we had just had our first child. I had always been interested in money (aren’t we all?), but had never really done anything significant to take charge of my financial future. And then I picked up a copy of Time is Money by Frances Leonard at the local library. (more…)