Category Archives: Education

America is Screwing Us… the President Said So!

Are you ready to shit your pants? From the official Woodrow Wilson Presidential Library Web site:

“A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men who, even if their action be honest and intended for the public interest, are necessarily concentrated upon the great undertakings in which their own money is involved and who necessarily, by very reason of their own limitations, chill and check and destroy genuine economic freedom.” – Excerpt from 1912 campaign speech

“We have restricted credit, we have restricted opportunity, we have controlled development, and we have come to be one of the worst ruled, one of the most completely controlled and dominated, governments in the civilized world–no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and the duress of small groups of dominant men.” – Another excerpt from 1912 campaign speech

Student Loan Debt Feedback

My old friend, Jesse, sent me a series of instant messages the other day – referencing an old thread on student loans:

I was just reading your post from a few weeks ago about student loan debt. I wanted to share my view on this with you. You may recall, over the past year I have been serving as the student trustee on my university’s board of trustees:

I would like to see a few things happen. First… Differential tuition. Charge students the cost of their individualized education. I am in the engineering school, which is one of the most expensive pieces of my institution. My professors cost almost 2x as much as some other departments do… and my lab equipment is really expensive as well. I should be pay proportionaly more than someone that it is english or education or social work (which are at the other end of the cost spectrum). Basically, this balances itself out because people that cost more to educate will generally make more when they graduate.

Then… Do away with the grant system and take all the money from it and fully subsidize loans for all students. If you’re going to college and you need money… You get a loan interest free. I have a philosophical problem with grants as they are currently implemented. Your education is about you… Not your parents… So i have a problem with telling one kid that his parents made too much money for him or her to get any help and another that since his parents are poor he gets to go to college for free.

Now… The argument for the current method is because poorer communities don’t have as much money in their public schools so the education is not as good. But i’d rather not just cover up the problem… Instead let’s fix it by detaching property taxes from school revenue. Anyway… I’ve done a lot of research and ran numbers and planned… This is my idea of what would make the system fairer and equitable for all. The other major flaw with the grant system is that with the divorce rate as high as it is… The numbers don’t calculate right with who is poor and who isn’t…

Maximize your Home Value

Stan “the Man” Mackey (Voted the best real estate agent in Seattle) has a few more bits of info for all homeowners:

I hope you are doing well and enjoying your new home. Now that you are settled in, I wanted to give you some information on how to maximize your home’s value. Property values have risen fairly dramatically over the last few years. We have become used to selling our homes for a profit. During a slower economy, though, property values may not appreciate as rapidly. Here are some suggestions on how to maximize your home’s value:

  • Remodeling the kitchen and/or baths is one of the best ways to add value.
  • Adding a room or garage is an expensive improvement, but can pay off if it is carefully designed and seamlessly executed.
  • Adding or improving decks and patios can add value.
  • Improving landscaping often adds appeal, but not necessarily value.

We did remodel the master bath, we improved the deck by adding stairs to the lower level, and we also landscaped a bit. I hope our improvements pay off (not just for us, but when we’re ready to sell). Still haven’t found a local Seattle carpenter to help us with a few small custom projects, though.

Finding a Tax Attorney

As I mentoined before, we’re searching for a tax attorney. But this situation begs the question: how do you know the tax attorney you find is any good? My friends responded with answers that should help everybody:

Douglas Lineberry:

Ask another attorney. The bar association or lawyer referral services can be problematic. I believe the majority of attorneys that agree to take referrals from bar referral services genuinely want to help the folks that typically turn to a referral service (many of the referral services require the attorneys taking the referral to work at a reduced or no fee basis, or at least to provide a free initial consultation). There are, however, some attorneys that use the referral services because they cannot get any other work (and there is usually a reason for that).

Asking a friend or family member is a good start, but they are probably only going to be familiar with an attorney they know (being a friend of an attorney is not necessarily a reflection of how good that attorney is) or someone that they have worked with. If you get a referral to an attorney that friend or family worked with, the problem is that friend or family only knows if they had a good or bad experience. That doesn’t tell you anything about the qualifications of that attorney relative to other attorneys doing similar work in that geographic area.

The advantage to asking for a referral from another attorney is that they know other attorneys. For example, I don’t do family law work. However, I do know 2 or 3 exceptional family law attorneys in my county – people that I would hire if I ever needed representation in that area. If a friend or client asks me about a family law matter, I can save them a lot of time and energy by simply telling them who I would use.

With tax law in particular, if it sounds too good to be true is usually is. If you are talking to an attorney (or other alleged tax expert) and you are getting the idea that they are trying to tell you that you’ll never have to pay taxes again, try finding someone else. The sham artists will also go to great lengths to debunk legitimate planners. For example, they might say “well, you could get another opinion on this strategy from an attorney or a CPA, but they probably won’t understand it or they’ll tell you it won’t work because they don’t understand it and don’t want to admit that to you.”

Rose Hainey:

You have found a good tax attorney when s/he has proven to your satifaction her/his ability to substantiate his/her expertise with clear understanding of the tax issues you are facing or want to avoid, depending on your tax situation.

Marc Aniballi:

I haven’t used one in a while, but the last time I did, the firm guaranteed their results. The agreement basically stated that so long as I had given them full disclosure of all relevant materials and situations, that any issues that cropped up would be their responsibility – not mine. Obviously, if there was new evidence brought forth, then I was back on the hook. This was not in the US though

Sam Cheris:

There are a variety of ways to verify your tax attorney’s credentials and capabilities.

  1. Does (s)he listen to your questions and does (s)he explain in terms you are able to understand?
  2. Does (s)he stay away from trying to sell you product?
  3. Does (s)he have a Martindale AV rating?
  4. Has (s)he received any honors from his peers, e.g. Super Lawyers, Best attorneys in America?
  5. Have you gotten reference clients from him (her) that you know and respect?
  6. Is (s)he willing and anxious to work with your current advisers (CPA, financial planner, etc.) or does he bad mouth them and want to be your sole source or steers you immediately to ‘his (her)’ team?

None of these questions alone will assure you of finding a good tax attorney, but taken together, they should weed out the unethical and the mediocre.

Robert Geurden:

If I recall, you’re on the West Coast, so I can write this without being too self-serving. My approach to giving tax or legal advice is to try to let the client know about both the advantages and disadvantages (or, if you prefer, risks and rewards) of a particular option, and, where possible, give more than one option. At the end of the day, it is the client’s decision whether or not to go ahead with the plan. That is, after all, what the ethical rules promulgated by the state bar associations require we attorneys to do. Non-tax lawyers may not always understand all of the details of the tax issues we mention, but one of my touch-stones for judging both my own work and that of my peers is whether the attorney tried to explain the issues. Fully explaining a complex tax issue in easy-to-understand terms takes time, though, and that time translates quickly into legal fees. Still, you should be able to get a sense during your initial interview of whether your attorney is inclined to consider the advantages and disadvantages and explain them to you.

I also agree that if it sounds too good to be true, it probably is – and the fact that the plan is promoted by a large firm does not necessarily mean that the plan will work. In fact, fraudulent tax plans promoted by large firms are more likely to draw the ire of the IRS since the settlement is likely to be large. There was a news article in on May 25 about Sidley, Austin, Brown & Wood’s successor settling a civil claim with the I.R.S. for $39.4 million for allegedly promoting an abusive tax shelter. – Good luck

You Tube: The Movie

I was invited to become a Branded Channel on YouTube this afternoon – largely because we’ve been producing and uploading 5 videos a day for the past couple of weeks. If you thought my live site was being done for pure fun, you’re pure wrong. It’s there to build community, support community, and extend community.

If you’re not putting your videos on YouTube, you’re insane.

And if you’re not putting videos online in the first place, you’re asleep at the wheel.

Dysfunctional Family

Student Loan Debt: Why?

“So, what if the Internet started serving as a University? No books, no exorbitant tuition, local meetups for affinity groups, teleconferencing, etc. Sounds crazy, but at least that idea is more realistic than setting yourself up for a financial catastrophe.”

My friend, Corey, responded via IM:

So true. Problem is getting recognized as a quality method of education and recognized for producing results. I mean, if Wikipedia can do it. Anyway, your series on student debt is great. I’ve been looking at ways of getting rid of my debt in under 4 years and reading some of the ideas you’ve posted has actually been a motivating factor in getting it solved.

I wouldn’t be assembling the information if I didn’t think it could help – and it’s very good to see that friends understand that there’s a bit more to my life than tech. Regarding consolidating her loans, Alice (Foeller) Hohl also submits:

I’ve been paying $220 a month for a long time, via autodebit. Any time Sallie Mae offered to lower my payment when rates went down, I would request that it remain the same, so more went toward the principal. Recently my family and I went on a strict budget, and all the money from my freelance work has been going into a separate account. One day I checked my Sallie Mae account and saw I owed less than $1,000, but that I would end up paying more than $2,000 if I continued the monthly payments. I wrote a check that day with funds from my freelance work. My savings account certainly doesn’t earn as much as I was paying in interest, so it was better to write that check than save the money and keep paying on the loan.

And Noelle Kehrley wrote:

I waited a couple of years after to high school to go to college. I made a deal with my parents, If I remained on the honor roll – they would pay for the semester. I applied for a merit scholarship each semester to supplement. I was very lucky to have this kind of help available, I’m not sure if I’ll be able to do the same for my children.

…and that’s what’s so sad about this entire student loan situation. It’s past the point of lunacy for people who aren’t privileged enough to have “rich” parents (or if they’re not poor enough, for that matter). Why bother to help people who can’t afford to go to college if you’re also not willing to help people who won’t be able to afford life AFTER college?

America’s educational system is failing us – from the top down. This may not be apparent today, or tomorrow, but when the “global economy” becomes an absolute reality – we’re going to wish we had done more to teach our citizens, giving them the tools to truly compete in a market that exists beyond these borders.

Video Guide Links

Personal Money Management

A penny saved is a penny earned, Ben Franklin once said. Smart man, that Ben – and I guess his sage wisdom has not escaped the minds of my generation. Of course, the lessons learned have been lessons different! Ponzi and I were recording videos yesterday, when she suddenly started talking about one of my bad habits: I throw away pennies because I can’t stand ’em. She continued to talk, despite live stream hiccups. When the stream came up again, she was finished – so I asked her to repeat it for the live chat’s benefit. It was a bit awkward at first, but we got rolling again quickly.

Depending on how long ago it was, if the pennies were several years old they have more of a copper content and are now worth 3-4 times their face value! Same with quarters made before 1964, that have a silver content. That’s inflation, people… It is indeed 100,000 pennies for $1,000. 100 pennies to the dollar; pretty simple. Assuming that he would throw out 20 pennies a week (probably a high estimate, but still believable) that’s a whopping $10.40 a year. At that rate, it’d take him 96 YEARS to get to $1,000! [shanedk]

Pay Off Student Loans

Continuing the student loans thread, I went back and asked my LinkedIn contacts how they paid off their student loans. Their stories provide both advice and inspiration to anyone feeling trapped by education debt.

Jason Carey:

People actually pay them off?

Sheilah Etheridge:

The hard way, one month at a time. Never late, never skipped a payment. When ever I had extra I would make the regular payment plus an additional amount to the principal. Once it became managible I was able to pay the balance in full.

Chesley Coughlin:

My startup got bought out by intel in 1999. Good bye debt!

Christopher Turek:

I kept ignoring it until…..My great uncle (who I had met exactly once when I was 7 years old) died and left me $17,000…. There was plenty left for beer and cigarettes (Even after I paid off the remainder of my loan)…Ohh yeah I also bought some good audio monitor’s and a 16 channel mixing board PLUS paid my rent. Boy 17K went along way in ’89! Thank you Uncle Morey!!!!!

Ben Wilkinson:

stock options!

Jim Hendrickson:

I had about $15,000 in student loans when I graduated in 1985. I deferred for four years while I served as an Army Officer. I did a Sallie Mae consolidation loan at about 6%. The term was fifteen years and if memory serves it was around $110 per month. I started paying off a month at a time while I started my civilian career and paid my dues. About 9 years in, my financial situation improved significantly due to promotions etc and I had the money needed to pay it off. I chose to do so more for convenience but loved the idea of the loans being gone.

Steven Vaughan-Nichols:

The long, hard road of one payment at a time. When I had extra money, and my higher interest debt was paid off, I put any additional cash I had into paying it down more quickly. I finally got it down to the point where I was able to pay off the remaining balance with one big check. It’s like any debt. Avoid getting unless you need to, and when you get some, pay if off as fast as you can, starting with the highest interest cost loans and working your way down. For morale purposes, I also found it helpful to pay off small debts that I could take out fast even if they didn’t have high interest rates. I just wish I had figured out this finance 101 lesson earlier in my life. As it is, however, I have had zero debt for years. It’s a great feeling.

Jason Unger:

Still paying it off! But with automatic online payments, I’m never worried about having a late fee or forgetting to write a check! Online Savings blog

Alex Harford:

I continued to live like a student, after getting a full time job. No new toys, car, or anything like that. I was lucky to get some good co-op positions that reduced my need for loans, but I still came out with $10k owing. By living below my means, I paid off the loans in 18 months.

Jennifer Carey:

I got hit by a car. I paid them off with the insurance settlement.

Seth Schneider:

I had a bit less than $15k in loans when I graduated. I hated the idea of being in debt, so I paid it off as quickly as possible. Even though I didn’t have a high paying job after graduating, I lived frugally and managed to pay it off in about a year. Financially I might have been better off investing some money and paying off the loan more slowly, but I just didn’t like the debt.

Roger Wong:

I’m paying the minimums because given the interest rate differential, I can make more investing the money instead of using it to pay off my loan.

Don K:

I didn’t pay mine for over 20 years !! Every year they kept my tax refund which amounted to next to nothing – then a few years ago I wanted to buy a house so I got in touch with them, and they agreed to drop all the interest for 20 years and settle for half of the original loan 🙂

Scott Terry:

My last year of college saw enough grants and scholarships to pay for both semesters, and I was even approved for a sizable student loan. Looking back, I *wish* I had not taken it! The interest I ended paying on it was far from the worth of the things I bought from using it. Ugh 🙁 My advice? Skip student loans as much as possible, especially if you don’t need them. The burden of the debt just isn’t worth it.

So, what’s YOUR student loan story?