How To Graduate with Less or No Debt

Keys_29082It’s quite the conundrum. We are told that a college education is the key to achieving our full potential and the American dream.  The story tells us it is the way out of poverty.  Access to higher education was a major priority for the last White House administration and affordability was central to that message.  President Obama even introduced the America’s College Promise Act 2015 to make the two years of community college free.

Over the past decade or so the number of Americans earning college degrees has skyrocketed.  And so has the tuition, and the debt that follows.  For many, what was supposed to be a roadmap to the American Dream turned out to be a money pit into a uniquely American nightmare.  Graduates now face enormously burdensome debt that many will never be able to pay off in their lifetime.  We’ve all heard reports about the student loan default crisis, where the struggle to keep up with unaffordable loan payments becomes so discouraging that people stop paying altogether.

Women are particularly vulnerable.  I recently read that women own two-thirds of student loan debt.  Yet a female graduate will earn only 79 cents for every dollar that a male graduate will, on average, in a similar position.  Hmm…wouldn’t it be nice if that was reflected in the tuition we pay?!  Blacks and Latinas tend to take on more debt, and the fact that they tend to make even less than their White counterparts makes it especially harder for them to repay.

But alas, there’s hope!  There are several ways to graduate with less or no debt.  At the root of decreasing the need to take on debt to advance one’s education are planning, time and diligence.  Here are some things to consider:

  1. Take your required courses at a community college.  It is not necessary to spend tens of thousands of dollars on coursework that isn’t directly relevant to your major; better yet, if you don’t even know what you want to study or career path you want to take right now, community college is a great place to sort that out.  Aside from the money, it can help you to grow in maturity and be more focused at a four-year college. Advantages:
    1. Cheaper
    2. Potentially pay tuition as you go
    3. The 4-year college transcript is what will be seen on your resume and what you will talk about at parties!  If you started at Community but ended up at Harvard no one really has to know.stundet-loan4
  2. Prepare!  There are literally thousands of grants and scholarships.  Take the time to do the research necessary to meet all of the deadlines and gather all of the information required to complete each application.
    1. Attend events at schools and community organizations of all sorts; read books and articles on free money for college. Get to know people who do this every day and keep in touch.
    2. It would be wise to start researching 18 months out from when you will begin school.  This way you can target your time and energy towards the most lucrative scholarships and grants that you qualify for and are interested in.
    3. Give yourself and your recommenders enough time to craft thoughtful, well-written essays and recommendations.
  3. Consider the potential salary expectations for your desired career.  Will your potential future income allow you to afford your student loan debt along with your realistic cost of living?  Your grades, location, network and caliber of your school are all factors in the salary level that may be available to you.
    1. This is the business of your life.  Do a cost/benefit analysis on your educational goals.  Does the pay scale for the career you intend to go into justify the cost of the degree required for the field?  For example, if you want to be a social worker, would it be worth it to go $60,000 into debt, considering what your salary is likely to be over the long run?
    2. Following the example in number 1, there are student loan forgiveness programs for certain careers.
      1. Usually when you go into one of these careers and apply for loan forgiveness there are requirements such as length of time to work in the field.
      2. Careers in public service (ex., The Peace Corps), medicine, the law and military service are all examples.
      3. For more information go here, here, here and here.splash
    3. An often overlooked yet critical advantage of going to college is the alumni network.
      1. I wrote in a previous blog, No Man Is An Island.  No one gets to where they want to be in life solely on their own effort.  Everyone needs a team to achieve their goals and dreams.
      2. As I asserted in my post about opportunity, connections are key.  That is the value of going to a top-tier school.  College isn’t just about academics; it’s the people with whom you will build lifetime personal relationships and professional connections. Further, the higher up on that U.S. News & World Report list, the higher your earning potential will be as soon as your graduate.
      3. Going to a top school matters most in the beginning of your career.  Afterward your professional record is what will really matter.  Of course top school alums will always have bragging rights, whatever it’s worth. 🙂
    4. Get a job at a company that offers tuition reimbursement.  Consider that there is more than one way to obtain an “education.”  Working in your field of interest while saving and investing as much as you can, kills two birds with one stone.  Being reimbursed for the tuition you pay is icing on the cake!
      1.  I benefited enormously by this incentive when I worked at Ernst & Young.  I was able to grow my professional competence through continuing education classes.  But they would also have paid for graduate school.
      2. Usually companies will require that you study courses either related to your specific position or the company’s industry. Length of time employed is another typical requirement. Either way if it’s your field of choice, it’s a win.
      3. The bigger the company the more likely that this opportunity will be available and the more generous.

These are just a few suggestions to get you started.  There are other personal finance possibilities that I will cover in another blog.  Have you been working on getting the money together to pay for college?  What has or has not worked for you so far?  Do you have any ideas you could add to this list?  Comment below!

 

Read more on the advantages of community college here.

Tennessee Makes Community College Free For All Adults

Detroit Is Making First Two Years of College Free

Two Tuition-Free Years in Rhode Island

Should Students Get Grades ’13 and 14′ Free of Charge?

Paying off debt with 401K

8 Reasons To Never Borrow From Your 401K

First 2 Years of College Free

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The Paper Chase

ChasingMoneyMotivational posts are a big thing on social media.  Type in hashtags like “motivation,” “inspiration,” “hustle,” “grind,” “quoteoftheday,” and so on, and a plethora of slick memes will show up with quotes from business leaders and motivational speakers through the ages.  You will find many quotes from Jim Rohn, Robert Kiosaki and Tony Robbins, to name a few, extolling the virtues of persistence, focus, planning, how to build wealth, and the like.  Entrepreneurship has exploded as the internet has made education more accessible than it has ever been.  Technology has lowered barriers to entry for many industries in terms of knowledge as well as start-up capital.  In theory the playing field of capitalism is far more level than it has ever been before.  My inbox and social media accounts are flooded with offers to take a look at some idea to build wealth using the wonders of modern technology, usually with a rags-to-riches testimony.

Now we can “monetize” just about anything.  Industries are growing for motivational speakers, business coaches and trainers, for which clever entrepreneurs will provide instruction on how to tap into the market, for fees small and large.  Usually potential clients are lured into listening to the sales pitch with a free webinar or ebook download.  Somewhere within the material, usually at the end, there is a sales pitch – an up-sell – to turn the free information into a revenue stream through memberships, subscriptions or further coaching.  That sales pitch usually includes at least one quote from a “guru”, such as those mentioned above, to imply that the person shares that winning mentality; they have the thing that you don’t think you have.  It is a very effective tactic as it taps into the deep-seeded self-doubt many of us live with; our desire to be perceived as and feel successful; and guilt over not achieving our full potential.  When I was in network marketing we were taught to always search for the NEED and posit the product as the solution.  The need that motivates many people to pour hundreds to tens of thousands of dollars into these trainings is freedom from the imprisonment of financial struggle.

But even with the abundance of opportunity at our fingertips there is still a pervasive sense of lack in our society.  Increasing abundance of opportunity has not resulted in increasing satisfaction or happiness.  Why is that?

Ecclesiastes 5:11       

As goods increase, so do those who consume them.  And what benefit are they to the owners except to feast their eyes on them?

gold-dollar-sign-on-groundI decided to call this blog The Financial Fashionista in part because I recognized that I myself had a conflict between my desire to acquire things and my desire to establish a solid financial foundation.  I have an economics degree and experience in high and low finance. (That’s a joke.)  In my head I have a very clear understanding of how money works: the concept of compound interest, investing in the financial markets, financial products and services, saving, interest expense, depreciation, the difference between cost and value.  In college my focus was mortgage-backed securities, the same product that brought down the world financial markets. But when it comes to personal finance emotion is almost inextricably linked.  This is why most people pull their money out of the market during a correction, as happened in 2008, marriages fail, and even cause business owners to make poor management decisions.

I am now looking very closely at the ‘why’ in my spending habits and attitude toward money in general.  What lessons from my past must I un-learn?  How do I bridge the gap between my rational understanding and my emotions?  I have rooms full of “stuff” that I never have to look at or touch for the rest of my life.  The older I get the more I realize that it is all meaningless.  Whatever satisfaction I receive from purchasing a new dress or some other thing is absolutely fleeting.  And as such the process must perpetuate to reach the same high.

What motivates us to do this?  I know I’m not alone.

Ecclesiastes 4:4

And I saw that all toil and all achievement spring from one person’s envy of another. This too is meaningless, a chasing after the wind.

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Chasing after the wind.

Another thing that social media brings to the forefront is the deep desire to be simultaneously approved and envied by others.  We lament the unrealistic standards of beauty and lifestyle promoted on the medium but those who do it best gain the most followers, by which they are able to creative highly lucrative businesses.  Posts and hashtags about grinding and hustling extol the value of pushing to reach goals and measurable achievements; we respect most the people who seem to be accomplishing big goals and dreams and the wealth that comes with it.  But that value system is based on outward signs of a success that can disappear even faster than it came; not character or the virtues of community, humility, patience, temperance and generosity.  It is inherently inauthentic.  No wonder it  cannot bring forth lasting satisfaction and happiness.

Motivation in this day and age is temporary because it tends to be based on comparing ourselves to others and wanting what they have.  Inspiration is more authentic and long-lasting because it is based on the vision and purpose that is uniquely suited to the individual.  As the saying goes, “chase your passion and the money will follow.”

 

Debt & Delay

cbbfb2a7It is not hard to find advice on managing money.  There are print publications, websites, gurus, apps, non-profits, licensed professionals and people we know who give us their ideas on money: saving it, investing it, making more of it and how to spend it.

One of the biggest concerns Americans have about money is debt.  In our consumer-centric culture we rely on interest-bearing credit cards and loans to finance non-essential wants, in the process racking up mountains of debt that we end up struggling to pay.  We are bombarded with ads while checking e-mail, on social media and elsewhere designed to trigger our impulse to purchase on a whim.  Temptation to consume is everywhere.  But for the small business owner, being mindful of discretionary spending is especially important; the consequences of personal finance habits can have a big impact on their business aspirations.

Debt & Delay

According to the 50/30/20 rule, 30% of your income should be allotted for discretionary spending.

098689848723_2A disheartening consequence of having unmanageable “bad” debt is delay in attaining goals and dreams.  Bad debt is debt acquired for things that have no real value.  (Good debt is that which is acquired for things that we can use to increase our net worth today that could also continue to provide resources in the future; for example, a home mortgage.)  Money diverted toward paying the monthly interest on balances carried forward on credit cards represents an opportunity cost both in the moment and the near future.  This is especially true for entrepreneurs.  Access to capital is essential to start and grow a business.  Many entrepreneurs will apply for a bank loan and solicit investors for this purpose.  After loan officers and investors read the business plan, they will want to assess the owner’s financial credibility.  They may look at the credit report and bank accounts among other things, and usually require that the owner have some “skin in the game” to share in the risk (a certain percentage of the loan amount.)  The amount of his/her own cash and/or assets that the owner is expected to have invested in the business could be sizable.  Besides that, business owners always need a cushion for unforeseen hits to their budgets.   Even the most motivated entrepreneur with the best ideas can have trouble getting their business off the ground due to perpetual financial constraints.  An entrepreneur can spin his wheels for years and years, missing out on opportunities and delaying plans, due to large amounts of avoidable debt.

Unmanageable, avoidable, high-interest debt can cause delay in living as well.  We probably all have a wish list of things we’d like to do and things we’d like to see.  Travel pages on Instagram are some of the most popular on the platform.  They portray idyllic destinations both abroad and at home and we can just picture ourselves on that beach or walking those shop-lined streets.  A nice trip to Morocco, Tanzania, Singapore or Brazil can cost thousands.  But most Americans have less than $500 in their savings account.  People put off weddings until enough money is saved to have the kind of wedding they would like.  In so many areas we delay living our lives to work for money to pay debt.

Or as soon as we pay debt off or down we begin the cycle again.  When we don’t have the cash to do and have the things we want we often turn back to our credit cards.  When we in the habit of using credit there is always something else for which to use it.  If we cannot save or save less than we should, we remain cash-poor and resort to credit once again.

2017 is the year to end this vicious cycle of debt and delay!  It will require discipline, planning and keeping our long-term vision in focus.

There are behaviors to void and behaviors to embrace:

  AVOID                                                                  EMBRACE

Impulse buying/Giving in to temptation                     Delayed gratification

Using credit cards                                                                 Paying with cash

Lending money you can’t afford to not get back      Paying Yourself First

Scrambling for money in an emergency                       Building an Emergency Fund

Spending Every Penny                                                      Saving 10-20% of Income

Redundancy                                                                          Reusing/Recycling/Repurposing

Spending for unnecessary things                                  Spending for experiences

Expensive outings with friends & family                    Free to low-cost events

Delayed Gratification:  Do you have a closet full of clothes that you hardly ever wear?  A house full of belongings you hardly ever use?  You were probably excited to buy them.  But you got over it quickly.  If we choose to take the time to save the cash for a purchase instead of whipping out the credit card, after a while that item may not seem as desirable.

credit_card_logos_10

Credit Cards:  Take a look at the interest payment you make on each card every month.  Have you ever added them up? Get a monthly total of interest you pay to make it viscerally clear how much your debt is actually costing you; money that you are not able to invest into your future. Remember this feeling every time you consider using a credit card to buy something you don’t need or could put off until you have the cash.

And have $1,000 saved before attacking your debt.

Lending Money You Can’t Afford to Get Back:  Judge Judy would be out of business if people would say “no” to friends and family who ask them to borrow money that they cannot afford to lend.  Such a loan is really a gift by another name.  A generous spirit is beautiful, but it should not cause you stress and damage your relationships.  Part of becoming successful is knowing when to say “no.”

Scrambling For Money In An Emergency:  On the other hand, it doesn’t feel good when you have to resort to asking family and friends for money to bail you out in a pinch.  Things happen.  There’s no shame in needing and asking for help.  Sometimes it’s unavoidable.  The best thing to do is save as much as possible when times are good, not spend it all.  An emergency fund should be at least three, but ideally six, months of living expenses.  Start where you are towards a specific target based on a realistic idea of how much you live on every month.  But strive to consistently save 20% of your net income (after taxes), before spending or paying bills. Visit www.bankrate.com to compare savings account interest rates.  I like Barclay’s.

Don’t neglect to invest – and I don’t mean CD’s!

200520930-001Redundancy:  As stated above, many of us have lots of stuff we don’t use and eventually forget about.  It is good to take an inventory of those junk drawers and crowded basements to avoid re-purchasing items we need down the road for a project or errand that pops us.  Otherwise try to sell excess belongings, especially duplicates, on auction sites like ebay, apps like 5miles, or sites like craigslist.

Spending On Unnecessary Things:  A lot of times when we shop, especially women, it can feed a need for satisfaction, accomplishment or escapism.  How about putting that money and effort toward investing in experiences?  Concerts, art shows, international travel, charity, lessons to learn a skill or develop a talent.  Good experiences that allow us to de-stress, meet new people, learn new things and really LIVE can satisfy the same needs while also allowing us to grow as individuals.

Expensive Outings:  I have a small group of girlfriends that I love spending time with.  We schedule regular outings to eat, go to cultural events and hang out.  I found myself spending much more than I would intend to and promising myself that the next time I will stick to a budget.  In 2017 I am going to be more disciplined about this.  Being honest with my friends about my need to reign in spending will help me to keep focused.  I have a specific saving and investing goal for the year and I am going to be ruthless in achieving it.

It can be challenging for entrepreneurs to remain motivated and inspired.  The things of life can distract us and make our dreams seem farther and farther out of reach.  Controlling spending and debt can help to secure some peace of mind and allow us to leap forward when the right opportunity comes about.

Debt Bad, Leverage Good

Big money stack. Finance concept

Sometimes in life a concept can either mean something good or mean something bad, depending on the person’s perspective.  A word like “debt” can illicit pangs of dread or a spark of promise, depending on the listener’s mindset.  The difference between the two is in some combination of observation, education and experience.

In our consumer-driven society, there is a lot of anxiety around debt.  The media regularly reports on the financial habits of American households and how much we are beholden to creditors.  The types of household debt of greatest concern seems to be credit cards (consumer) and mortgages.  The data tell us that Americans do not save – for the most part – which is the inevitable result of the simultaneous accumulation of large amounts of credit card debt.  At the same time, many homeowners are upside down on their mortgages or own homes they cannot truly afford.  We are losing value hand over fist: first, to high credit card interest rates, then to loss of property value.  We are trained to believe that debt in and of itself is bad, and there is no shortage of evidence that seems convincing.

But, this presidential election brings to light an important truth about debt that often goes un-reported: debt can also be good for you.  One of the two candidates in this race is an unapologetic debt enthusiast.  He has grown an empire built on debt (other business practices aside.)  Almost anyone who has amassed a fortune in business has done so by utilizing the power of debt, but they call it leverage.

According to a recent Inc. article, “the only way to get rich rapidly is to understand the principle of leverage.”  The author describes leverage as the financial secret of the super wealthy.  In simplest terms, leverage allows a person the potential to exponentially increase the benefit, or return, received from putting an asset to work; it can be your time, energy, money or other resources.  A person utilizing the principle of leverage has acquired more of what they need to accomplish a goal, but that additional resource is not derived from their own effort.  In the case off money, the resource is, of course, debt.

Leverage is the bread and butter of the capital markets.  There are many financial instruments (options, futures, etc) that increase the buying power of an investor’s dollar, thereby allowing the investor to own more shares of a company than would otherwise be possible.  Businesses use leverage to operate, expand and improve when they borrow.  In real estate, investors use leverage to acquire, rehab and flip properties.  An investor or developer who pools funds from other investors will be able to do much bigger.  Real estate investors even fund acquisitions and rehabs with credit cards (which for most people is on par with a 4-letter word.)  The key to leverage in your finances is to “buy things that will appreciate in value. When you can leverage your time and your money and then put your money to work, you are on the road to riches.”

Leverage is a valuable mechanism for maximizing output and efficiency in the functions that impact profits.  The author gives an example of how this works.  It’s also the concept behind network marketing: on your own you will make a certain income.  But if you duplicate your efforts via a team that you develop to work with you, each of whom will develop teams of their own,  your income will expand exponentially.  An entrepreneur may start off doing all the labor him/her self, but when he/she is able to hire staff to do the work instead, he/she will have created an opportunity to significantly increase both the client base and the amount of work that gets done within the same time frame.  This way time, energy and money are leveraged, which can quickly escalate one’s income and grow wealth.

Real Estate Investing, With Other Peoples’ Money (It’s a thing)

 

I am a hard-core multi-tasker, in life and in business.  For better or worse, I am happiest when I have several objectives to handle at once.  So I like the idea of having multiple streams of (potential) income.   I have a variety of really strong skills and I enjoy finding ways to grow and use them.

Last year I attended a very impressive seminar on real estate investing.  It was held over 3 days in 8-hour-long sessions.  The purpose was to show attendees how to become financially independent by investing in real estate, but at a higher level.  The scope of the information and the extent of the detail provided was stunning, and frankly a bit overwhelming.  So exceptional was the training and the skill of the trainer that a ballroom full of hundreds of people remained transfixed from the first minute of the first day to the last minute of the last day.  Some attendees were seasoned renters, rehabbers and flippers who found themselves blown away by the eye-opening education.

One of the biggest take-aways from the seminar was that it is possible to get started in real estate investing with little to no money out of pocket.  Even some of the most successful real estate investors began with hardly any money to their name. Below are a handful of ways that cash-poor self-starters can begin their journey to financial freedom through investing in real estate.

6 Real Estate Investment Money Myths, Busted!

1.  Wholesaling

Wholesaling is a  popular way to get started in real estate.  A real estate wholesaler is someone who helps investors locate the types of properties they are interested in buying.  The warehouser builds a database of homeowners who are looking to sell their properties as soon as possible, as well as active investors who have the funds to grab the right opportunity when it presents itself.  When you see a sign on the road with an offer like, “WE BUY HOUSES, ANY CONDITION” that person is a wholesaler.  A wholesaler is a type of real estate investing intermediary.

2.  Creative Financing

This is for someone willing to take on a bit of calculated risk. There are quite a few ways that a budding investors short on funds can find money to get started.  These methods may sound irresponsible because they contradict conventional wisdom.  For example, if investing for retirement standard guidance is to invest for the long-term and NEVER make withdrawals so you don’t miss out on gains.  But I have a saying, “It’s not the ‘what’, it’s the ‘how’.”  In other words, it’s the ‘how’ in what you want to accomplish, not the ‘what’ itself that counts.  With the right information and training, what may look like a questionable decision to someone else could be the best decision you will ever make.

HELOC

One way to begin investing in real estate is to tap the equity in your own home through a home equity line of credit (HELOC).  I won’t go into too much detail here but with the right amount of planning and skill to do it properly this can be a relatively safe way to begin investing without having to come up with cash out of pocket.

Retirement Account

A similar method that successful real estate investors have used to get started without having to come up with extra money is by taking a short-term loan from their retirement accounts such as the 401K.

Private Money Lenders

Real estate investors must always have a Rolodex (so to speak!) of sources of money to acquire more properties.  I call them the ‘investors’ investors’, but the official title for individuals who will lend their own money is ‘private money lenders’.  A private money lender is anyone you may know – a family member; wealthy associate; property owner; etc, who has money that they are looking to lend to others with the expectation, of course, of a certain return on that investment.  This is one way that individuals seeking to grow their portfolio can do so without having to go into the stock market, where value is largely arbitrary.  Private lenders include people who lend from their HELOC.

Long gone are the days when people could park their money in a savings account and watch the interest pile up, and not even conventional investing wisdom from the stock market gurus are panning out as they did in decades of the recent past. Today there is a new paradigm.  In this new world of constant uncertainty and upheaval it is imperative, in my opinion, to have a backup plan for our financial survival that is well-rounded and smart; calculated investing in real estate should one of the tools in that tool box.

The ‘Trial’ Temptation

 

There are many obvious ways that our efforts to save money and practice good financial habits can be sabotaged.  High interest rates, late fees and even the opportunity costs of not investing and/or saving adequately are among them. But there are other subtle little bank balance busters that go unspoken in media on household money management.   One of them is unwanted memberships and subscriptions from un-cancelled  free trial or introductory periods.

In a consumerist culture like ours it can be hard to make a budget and stick with it.  It takes an enormous amount of disciple to resist the incessant barrage of temptations that surround us almost every moment of every day, to keep spending money.  One of the ways that savvy companies tempt us to put our guard down and hopefully spend money (we don’t have to spare) is the “free trial offer”.  Trial offers can last days or even several weeks but the key is to obtain our credit card and contact information to allow us this temporary access to services and information for free.

The words “free” and “no risk” are a great way to peak interest in a product or service.  Who doesn’t want something for free if they can get it and it can be of benefit to them?  But we also know that there is usually a catch: that free trial will come with some expectation upon us to do something or give something up at some point.  It can be referrals, which businesses often find even more valuable than a one-time sale, or the sale itself – subscription or membership.  Not to mention that once we willingly provide our personal details the company has gained the ability to continue to market itself to us.

The problem with trial periods – for the consumer, at least – is that it can be difficult to remember to cancel on time.  Many people take advantage of these offers with the intention of cancelling before it’s over.  If you forget to cancel a trial membership or subscription you end up paying for something you don’t want, and if you don’t catch on for weeks or even months there is the potential for a substantial financial loss to you.  Companies have different rules regarding canceling a subscription after the trial period has expired.  Some companies will reimburse all of the subscription rate if you cancel within a day or two of the first charge; others will prorate the reimbursement based on how many days are left in the subscription.  Others disallow reimbursement of funds but will cancel charges as of the next billing cycle.

Obviously there are ways to try to prevent this mistake from happening, like adding the last day of the trial period to your calendar, but of course the easiest way to avoid the problem is to not sign up for trial periods at all.  There are times when you need to utilize a service but only for a short period of time to accomplish a specific goal. This is when trial periods are most useful and sensible.  What you want to avoid is failing to discontinue a trial period for something you never even used or didn’t find beneficial anyway.

The “Millennial Investor” Is A Thing…

Thirty trillion dollars. “Trillion.” With a “t.” That is the estimated amount that so-called millennials will inherit from their baby-boomer parents over the next few decades.  It is the largest transfer of wealth, possibly in human history.  By the way, who are these people?  Seriously.  The fact is most people are entirely unprepared financially for retirement!  Clearly these are not the kids of the millions of baby boomers who will be reliant upon social security to make ends meet.  But I digress.Wealth managers today focus a lot of energy targeting the baby boomers themselves, especially to help them protect whatever wealth they have amassed, to sustain their lifestyle after retirement.  It is a very large market.  But apparently the wealth that is going to be transferred to millennials will be an even larger market, and investment advisors are beginning to position themselves to capture the opportunity.  In the clip below, one such advisor talks about a program his firm offers called Backpacks to Briefcases.  It pairs millennial clients with their contemporaries in the wealth management game, whom they may better be able to relate.

Financial literacy is woefully lacking in our education system, even among the well-off, so this is a great idea.  The fortunate ones who will be coming into enormous sums of money will need the training that many of their parents didn’t receive in order that they may make wise decisions about managing, spending and donating their windfall.

Preparing Millennials for a $30 Trillion Wealth Transfer

You don’t have to inherit a large fortune for sound money management to be relevant to you.  Any amount of money you have earned or inherited should be handled properly.  True, we are more likely to blow through money that we have been given rather than money that we have earned on our own.  But no matter the circumstance, sound financial practices matter.  For example: a guy in his mid-20’s inherits the proceeds of a large life insurance policy, pension and 401K upon his mother’s passing, totaling several hundred thousand dollars.  He uses his windfall to live the large – traveling, partying, and everything else.  Fast forward five years, the money is gone and he’s worse off than he was before.  True story. There is an expression one of my friend taught me: “It’s not what you make (have), it’s what you keep.”