Yeah, we need to stop subsidizing "private" colleges so they can build multi-billion-dollar endowments and start offering nearly free public college education, especially since college is required for most non-dead-end jobs. Many top colleges could afford to operate solely on their endowments, but keep charging to fund ridiculous building projects and to make their investment fund managers even more money. I was poor and received "100%" financial aid, but loans and work-study while drawing down my meager life-savings (hide student assets from FAFSA!) wrecked my college and post-college experience.
This will probably mean that we also stop spending 100s of millions on college athletics, which is unheard of in other countries. And stop paying college presidents millions of dollars. Of this course never happen. The next Republican president will probably want to abolish public high schools.
I agree with most of what was said in the summary.
I didn't buy my home for cash, but I did pay off the mortgage balance in full from a "windfall" - the gains from the sale of my previous home that I was renting out from late 90s till early 2000s. At the time the option seemed attractive: my rate was 7%, the feeling of not owing anything to anyone - all the things people mentioned. It was also psychological - at the height of internet boom, a friend suggested that I sell about half of my stocks and pay off my mortgage. I was greedy. I told that I am getting a better rate on my stocks. Then the bubble burst. I hadn't owned any of the companies that went under, but I did own a lot of tech stocks and most of them lost a third or more of their value. Obviously when this happened I thought - it would've been better to pay off my mortgage then to lose the money. So when I got the money I paid off the mortgage.
In hindsight I am not sure if refinancing at 4.5% which was available at the time would've made more sense. Even though I save a higher percentage of my income now and still have more money "for fun", I am not sure if investing the money would've made more sense.
For people who say that deductibility isn't such an advantage: it depends on the individual situation. It is just something that you factor in when you compare mortgage interest to the rate you get on your investments. I live in NY State, and both income and property taxes here are so high that I can itemize even without the mortgage, so deductibility is a big deal to me.
Another thing to consider is expected inflation that can potentially reduce your mortgage payments to nothing. Imagine you borrowed at 9% around early 70s. Then you got double-digit inflation. Around 1983 when I just started working I got 13% rate on a regular bank CD. Wouldn't you want to be in a position of paying 9% while earning 13% (assuming you deduct mortgage and pay taxes on investments)? If you believe that inflation will go up, it makes sense to take a mortgage. I have a pretty affluent friends who just bought a vacation home. They could've paid cash for it but they choose to take a mortgage because they believe the inflation rate will go higher.
Another factor is age. If you are thinking of retiring soon it certainly makes more sense to be mortgage-free.
The self-righteous indignation here is exactly why this problem isn’t going to be fixed in the near future. Folks, stop looking down, look up. Why middle-income wages are stagnating is the question, when wages in the top tier have risen enormously? Yes, the author is correct if she says she is worried about the future; if you aren’t then you are not paying attention. You are to busy patting your self on the back for making sacrifices. Her point is on her income, sacrifices should not have to be so severe. Before you criticize, do you know what she pays on her mortgage/rent, auto insurance, health care, commute, or property taxes?
Socially, the value of life is much cheaper than $6.9m. At least if you are one of the undesirable members of this human race. A few examples...
The UNFPA actively promotes forced abortions of Chinese babies who would cause the population of China to become a burden. It is a "right" in the US to kill your child if you don't think he/she is valuable enough, and as long as the baby is not yet born completely. Barack Obama agrees that some American's are not as valuable as others.
The EPA is on to something when they say that old people are not as valuable as "regular" people. Carl Marx would be proud with today's effort to eliminate the unproductive members society through euthanasia and forced medical executions (i.e. Terry Schaivo)
I'm surprised in this culture of death that we live in today, the figure would be as high as $6.9m. Maybe they should add a disclaimer that its the going rate for only the "normal" people in society.
Solo card games are a great way to pass the time on super long flights. And if you are up on the games (I admit to being totally out of practice on nearly all of them), it's fun to take a set in the backpack. Not something we currently do, but I've seen others use this as cheap entertainment for extended trips on the road.
That's interesting that scholarships are based on financial need, although I can see the point there. Part way through grad school, I received a provincial graduate scholarship, as did a good friend of mine. For me, it made the difference of being able to continue with school rather than dropping out for a while to work. For her... Well, she had a sizable down payment for her condo when she graduated.
However, the scholarship was awarded for merit, and if it had been based on financial need, I would never have gotten a penny because I'm in that middle group discussed in this post. I guess I can't complain.
I was in a similar situation for undergraduate. I ended up going to a state school, because I got a merit scholarship that covered tuition and my parents were able to pay the rest out of pocket. At the time, I was PO'd that I had to go there. But when I graduated and I owed nothing, I was grateful because I was then able to go to a top notch grad school. Even though I had to pay for that myself with loans, I could only imagine what I would be paying if I also paid the extra $100K that undergrad would have cost me. I would be paying more than double what I am paying now.
yes, there are many families that pay for their child's education. But there are also a lot of us who were totally on our own.
even as a 22 year old, working full time, living on my own for 3 years already.... somehow how much money my parents made makes a difference even if they aren't willing to part with a dime of it. Actually, i had issues because they werent even willing to part with a copy of their tax return to fill out the form!
In Portugal, it's mostly free/cheap for university. Here in Ireland, the gov't have setup a fairly good system:
Providing you're studying fulltime, you get:
- Low cost housing (friend of mine is paying €10 a month for a 3 bedroom hous)
- Daycare (limited spots) for children under 6, if you have any
- Government funding to pay for your living expenses while studying
- ALMOST NO COST to go to the best (Trinity, iirc), assuming you get a spot that is :)
I think the philosophy in Europe is one America will have to start adopting sooner or later.. by improving your citizens, you improve the general state of your workforce. In Ireland; practically everyone I've met in a stable, management-or-higher position have at least one degree.
ps offtopic: the Captcha ALWAYS fails first time for me.. something up with that?
Though I'm not a tecnho-phobe and want our kids to be tech-literate, it is nice to hear when kids embrace a simpler, more accesible way to entertain themselves. Being tech-savvy is probably an asset in our culture, but not being completely reliant on it, especially for entertainment, is not a bad thing, especially when it involves the whole family.
Nice inspiring post, it makes me feel like there's hope that life can still be simple and rewarding, not to mention quiet.
We live in Vermont and the seasonal aspect of food is right there in your face. Just visiting the farmer's market will give you a firsthand look at what's available, and over time you begin to figure it out. Personally, I like the adventure aspect of not knowing what to expect when we get there, and as a backup, we can always hit the local Shaw's.
I couldn't agree more. The value of your life is what you make of it, but it is interesting when money values are tweaked in order to seemingly accomodate various bills by policymakers. Like you allude to, it sort of makes you wonder what it all means.
As for the EPA, and for that matter the FDA, SEC and all those government institutions, they truly can be a joke, simply acting as puppets for the administration's agenda, but in truth, they do serve a purpose. And while at times they can seem ineffectual, just think of how lawless things could get without them.
In fact, there was a time when they didn't exist and businesses were free to do whatever they pleased. While some may argue that the free hand of economics will keep them in line through supply and demand, it wasn't the case, and horrific things occured in terms of their business practices. Just read Upton Sinclair's the Jungle.
And, when you think about it, a lot of today's economic woes are the result of businesses (banks and lenders) doing whatever they please, with nobody ensuring sound business practices. This is popularly referred to as deregulation.
So I agree that the EPA often operates with smoke and mirrors, but they do serve a purpose, and under a different administration coud be more effective.
Bill, SSI is anything BUT honest!!!!!!!!!!
It is full of crooks. The people that collect SSI are crooks, the physicians that qualify the SSI's are crooks!!
There's nothing good about SSI unless it is for REAL disabled people.
Problem is Bill, that it (SSI) is paying people to sit eat and watch TV all day, get drunk, tweek out on Crank-Meth, and be as worthless to themselves and society as possible.
And if you think for a second that only the Wealthy pay for SSI, that's just a fantasy from your delusional mind Bill.
SSI will bring down everything.
It's a destroyer, not a helper honest Welfare system.
I cannot wait till' it's broke.
I want to see all the lazy people that lie to get a SSI check and have a Kegger party when they get qualified and recieve their big lump sum check in the beginning, I want to see them have to actually do a days work to have a meal, probably for the 1st time in their useless lives.
Eat the Seasons breaks down what's in season on a weekly basis, and, though not as specific as the above Epicurious link, is nice because it has the list of currently in season foods right there on the front page.
to see what all the craze is about. i have to say it's neato. oh and i waited zero minutes in line because i'm not a dumbass who goes to some store in the center of a yuppy area. anyway i prefer to use an indestructible motorola razr when i'm out performing activities that cause physical damage to hardware in my pockets, but i very much enjoy playing with the iphone in the office.
Milehimama, the problem is that schools don't consider children to be separate from their parents. When you apply for financial aid your financial status is tied to your parents. So sure, even if you are 18 and penniless the schools expect your parents to pay. If that system is changed somehow and the teens are treated like adults then almost every teen would be dirt poor and deserving of financial aid.
I'm definitely in the middle class category for college costs. Every year FAFSA says that my parents can afford school, which would be true if they didn't have house payments, car payments, food, health care, etc to pay for. It isn't fair that they work hard and have to live pay check to pay check while taking out a hefty unsubsidized parent loan and I take out student loans.
I'm grateful for all the opportunities that I have been given, but it's not right for my friend to get everything covered in grants because his family lies and says that his dad doesn't give him any money (they are divorced) so everything is based on his mother's income. My parents are together and would never lie like that so I am stuck paying off student loans until I die.
I know this situation well.... my family fell into that "in-between" category. When you apply for aid, there is not an in-depth study of your family's financial situation. Judging by just my parents' income doesn't really give the whole picture.
Excellent post. I found myself in the same situation my senior year of high school, but looking back, I'm glad I didn't go with the $$$ school. I got into MIT and ended up attending a (very good) state school, because after all that financial consideration, I was given a $1250 loan to cover all four years. Somehow I was fiscally responsible enough at 18 to realize this wasn't a great idea. I'm debt-free, and while it would have been something else to attend MIT, I am pretty dang happy.
I acknowledge that college costs are through the roof right now and I don't doubt that there are situations where people fall through the cracks but I can't feel that badly across the board for a middle class that is wrapped up in consumerism and credit card debt, instead of saving for college and retirement. With unsubsidized loans available (they are not based on need), the middle class should be able to make up the difference.
People with lower incomes have less opportunity to save for college, so they have greater need. They also have less of college-going culture (parents of first generation students often don't know anything about college or preparing their child) and have many more obstacles to overcome to even decide to go to college.
The middle class can get by and still put money away for college and they have the advantage of often being connected to the avenues (internet access, active in public school events, etc) to learn about the process of going to college and about state college savings plans.
And the thing that really sucks to admit is that the rich are often the most frugal of all of us. Most millionaires aren't trust fund babies. They are rich because they know how to manage their money.
We, in the middle class have got to learn this or we are always going to be stuck in the middle.
Yes, unsubsidized loans are non-need based and should be able to make up the difference between the expected family contribution and the cost of attendance.
Federally backed student loans still depend on the needs of the recipients. You still have to file a FAFSA. I didn't qualify for any of those loan programs. Additionally, the amount you can borrow from these programs aren't very high. These top private schools cost somewhere around $50k a year including room and board so even if you get a federal loan you probably can't cover the entire amount.
The other choice is to take out a private loan, which could get extremely expensive.
"...Windows knows what it is doing?.."....
now THAT'S funny.
HAHAHHAHAHA!
..
Cheers.
Yeah, we need to stop subsidizing "private" colleges so they can build multi-billion-dollar endowments and start offering nearly free public college education, especially since college is required for most non-dead-end jobs. Many top colleges could afford to operate solely on their endowments, but keep charging to fund ridiculous building projects and to make their investment fund managers even more money. I was poor and received "100%" financial aid, but loans and work-study while drawing down my meager life-savings (hide student assets from FAFSA!) wrecked my college and post-college experience.
This will probably mean that we also stop spending 100s of millions on college athletics, which is unheard of in other countries. And stop paying college presidents millions of dollars. Of this course never happen. The next Republican president will probably want to abolish public high schools.
I agree with most of what was said in the summary.
I didn't buy my home for cash, but I did pay off the mortgage balance in full from a "windfall" - the gains from the sale of my previous home that I was renting out from late 90s till early 2000s. At the time the option seemed attractive: my rate was 7%, the feeling of not owing anything to anyone - all the things people mentioned. It was also psychological - at the height of internet boom, a friend suggested that I sell about half of my stocks and pay off my mortgage. I was greedy. I told that I am getting a better rate on my stocks. Then the bubble burst. I hadn't owned any of the companies that went under, but I did own a lot of tech stocks and most of them lost a third or more of their value. Obviously when this happened I thought - it would've been better to pay off my mortgage then to lose the money. So when I got the money I paid off the mortgage.
In hindsight I am not sure if refinancing at 4.5% which was available at the time would've made more sense. Even though I save a higher percentage of my income now and still have more money "for fun", I am not sure if investing the money would've made more sense.
For people who say that deductibility isn't such an advantage: it depends on the individual situation. It is just something that you factor in when you compare mortgage interest to the rate you get on your investments. I live in NY State, and both income and property taxes here are so high that I can itemize even without the mortgage, so deductibility is a big deal to me.
Another thing to consider is expected inflation that can potentially reduce your mortgage payments to nothing. Imagine you borrowed at 9% around early 70s. Then you got double-digit inflation. Around 1983 when I just started working I got 13% rate on a regular bank CD. Wouldn't you want to be in a position of paying 9% while earning 13% (assuming you deduct mortgage and pay taxes on investments)? If you believe that inflation will go up, it makes sense to take a mortgage. I have a pretty affluent friends who just bought a vacation home. They could've paid cash for it but they choose to take a mortgage because they believe the inflation rate will go higher.
Another factor is age. If you are thinking of retiring soon it certainly makes more sense to be mortgage-free.
The self-righteous indignation here is exactly why this problem isn’t going to be fixed in the near future. Folks, stop looking down, look up. Why middle-income wages are stagnating is the question, when wages in the top tier have risen enormously? Yes, the author is correct if she says she is worried about the future; if you aren’t then you are not paying attention. You are to busy patting your self on the back for making sacrifices. Her point is on her income, sacrifices should not have to be so severe. Before you criticize, do you know what she pays on her mortgage/rent, auto insurance, health care, commute, or property taxes?
Socially, the value of life is much cheaper than $6.9m. At least if you are one of the undesirable members of this human race. A few examples...
The UNFPA actively promotes forced abortions of Chinese babies who would cause the population of China to become a burden. It is a "right" in the US to kill your child if you don't think he/she is valuable enough, and as long as the baby is not yet born completely. Barack Obama agrees that some American's are not as valuable as others.
The EPA is on to something when they say that old people are not as valuable as "regular" people. Carl Marx would be proud with today's effort to eliminate the unproductive members society through euthanasia and forced medical executions (i.e. Terry Schaivo)
I'm surprised in this culture of death that we live in today, the figure would be as high as $6.9m. Maybe they should add a disclaimer that its the going rate for only the "normal" people in society.
Solo card games are a great way to pass the time on super long flights. And if you are up on the games (I admit to being totally out of practice on nearly all of them), it's fun to take a set in the backpack. Not something we currently do, but I've seen others use this as cheap entertainment for extended trips on the road.
That's interesting that scholarships are based on financial need, although I can see the point there. Part way through grad school, I received a provincial graduate scholarship, as did a good friend of mine. For me, it made the difference of being able to continue with school rather than dropping out for a while to work. For her... Well, she had a sizable down payment for her condo when she graduated.
However, the scholarship was awarded for merit, and if it had been based on financial need, I would never have gotten a penny because I'm in that middle group discussed in this post. I guess I can't complain.
I was in a similar situation for undergraduate. I ended up going to a state school, because I got a merit scholarship that covered tuition and my parents were able to pay the rest out of pocket. At the time, I was PO'd that I had to go there. But when I graduated and I owed nothing, I was grateful because I was then able to go to a top notch grad school. Even though I had to pay for that myself with loans, I could only imagine what I would be paying if I also paid the extra $100K that undergrad would have cost me. I would be paying more than double what I am paying now.
i got hit by the parent assumption.
yes, there are many families that pay for their child's education. But there are also a lot of us who were totally on our own.
even as a 22 year old, working full time, living on my own for 3 years already.... somehow how much money my parents made makes a difference even if they aren't willing to part with a dime of it. Actually, i had issues because they werent even willing to part with a copy of their tax return to fill out the form!
Thanks Philip. I have quoted you here.
http://www.chowrangi.com/how-to-beat-recession.html
In Portugal, it's mostly free/cheap for university. Here in Ireland, the gov't have setup a fairly good system:
Providing you're studying fulltime, you get:
- Low cost housing (friend of mine is paying €10 a month for a 3 bedroom hous)
- Daycare (limited spots) for children under 6, if you have any
- Government funding to pay for your living expenses while studying
- ALMOST NO COST to go to the best (Trinity, iirc), assuming you get a spot that is :)
I think the philosophy in Europe is one America will have to start adopting sooner or later.. by improving your citizens, you improve the general state of your workforce. In Ireland; practically everyone I've met in a stable, management-or-higher position have at least one degree.
ps offtopic: the Captcha ALWAYS fails first time for me.. something up with that?
Though I'm not a tecnho-phobe and want our kids to be tech-literate, it is nice to hear when kids embrace a simpler, more accesible way to entertain themselves. Being tech-savvy is probably an asset in our culture, but not being completely reliant on it, especially for entertainment, is not a bad thing, especially when it involves the whole family.
Nice inspiring post, it makes me feel like there's hope that life can still be simple and rewarding, not to mention quiet.
We live in Vermont and the seasonal aspect of food is right there in your face. Just visiting the farmer's market will give you a firsthand look at what's available, and over time you begin to figure it out. Personally, I like the adventure aspect of not knowing what to expect when we get there, and as a backup, we can always hit the local Shaw's.
Thanks for the informative article.
I couldn't agree more. The value of your life is what you make of it, but it is interesting when money values are tweaked in order to seemingly accomodate various bills by policymakers. Like you allude to, it sort of makes you wonder what it all means.
As for the EPA, and for that matter the FDA, SEC and all those government institutions, they truly can be a joke, simply acting as puppets for the administration's agenda, but in truth, they do serve a purpose. And while at times they can seem ineffectual, just think of how lawless things could get without them.
In fact, there was a time when they didn't exist and businesses were free to do whatever they pleased. While some may argue that the free hand of economics will keep them in line through supply and demand, it wasn't the case, and horrific things occured in terms of their business practices. Just read Upton Sinclair's the Jungle.
And, when you think about it, a lot of today's economic woes are the result of businesses (banks and lenders) doing whatever they please, with nobody ensuring sound business practices. This is popularly referred to as deregulation.
So I agree that the EPA often operates with smoke and mirrors, but they do serve a purpose, and under a different administration coud be more effective.
Thanks for your thoughts, and have a nice day.
Bill, SSI is anything BUT honest!!!!!!!!!!
It is full of crooks. The people that collect SSI are crooks, the physicians that qualify the SSI's are crooks!!
There's nothing good about SSI unless it is for REAL disabled people.
Problem is Bill, that it (SSI) is paying people to sit eat and watch TV all day, get drunk, tweek out on Crank-Meth, and be as worthless to themselves and society as possible.
And if you think for a second that only the Wealthy pay for SSI, that's just a fantasy from your delusional mind Bill.
SSI will bring down everything.
It's a destroyer, not a helper honest Welfare system.
I cannot wait till' it's broke.
I want to see all the lazy people that lie to get a SSI check and have a Kegger party when they get qualified and recieve their big lump sum check in the beginning, I want to see them have to actually do a days work to have a meal, probably for the 1st time in their useless lives.
Eat the Seasons breaks down what's in season on a weekly basis, and, though not as specific as the above Epicurious link, is nice because it has the list of currently in season foods right there on the front page.
to see what all the craze is about. i have to say it's neato. oh and i waited zero minutes in line because i'm not a dumbass who goes to some store in the center of a yuppy area. anyway i prefer to use an indestructible motorola razr when i'm out performing activities that cause physical damage to hardware in my pockets, but i very much enjoy playing with the iphone in the office.
Milehimama, the problem is that schools don't consider children to be separate from their parents. When you apply for financial aid your financial status is tied to your parents. So sure, even if you are 18 and penniless the schools expect your parents to pay. If that system is changed somehow and the teens are treated like adults then almost every teen would be dirt poor and deserving of financial aid.
I'm definitely in the middle class category for college costs. Every year FAFSA says that my parents can afford school, which would be true if they didn't have house payments, car payments, food, health care, etc to pay for. It isn't fair that they work hard and have to live pay check to pay check while taking out a hefty unsubsidized parent loan and I take out student loans.
I'm grateful for all the opportunities that I have been given, but it's not right for my friend to get everything covered in grants because his family lies and says that his dad doesn't give him any money (they are divorced) so everything is based on his mother's income. My parents are together and would never lie like that so I am stuck paying off student loans until I die.
The system is broken, we need to fix it.
Why should parents spend ANY pennies of their income on their children's college education?
If parents are bound and determined to contribute, then invest ahead of time; otherwise, an adult should pay their own way.
I know this situation well.... my family fell into that "in-between" category. When you apply for aid, there is not an in-depth study of your family's financial situation. Judging by just my parents' income doesn't really give the whole picture.
Excellent post. I found myself in the same situation my senior year of high school, but looking back, I'm glad I didn't go with the $$$ school. I got into MIT and ended up attending a (very good) state school, because after all that financial consideration, I was given a $1250 loan to cover all four years. Somehow I was fiscally responsible enough at 18 to realize this wasn't a great idea. I'm debt-free, and while it would have been something else to attend MIT, I am pretty dang happy.
I acknowledge that college costs are through the roof right now and I don't doubt that there are situations where people fall through the cracks but I can't feel that badly across the board for a middle class that is wrapped up in consumerism and credit card debt, instead of saving for college and retirement. With unsubsidized loans available (they are not based on need), the middle class should be able to make up the difference.
People with lower incomes have less opportunity to save for college, so they have greater need. They also have less of college-going culture (parents of first generation students often don't know anything about college or preparing their child) and have many more obstacles to overcome to even decide to go to college.
The middle class can get by and still put money away for college and they have the advantage of often being connected to the avenues (internet access, active in public school events, etc) to learn about the process of going to college and about state college savings plans.
And the thing that really sucks to admit is that the rich are often the most frugal of all of us. Most millionaires aren't trust fund babies. They are rich because they know how to manage their money.
We, in the middle class have got to learn this or we are always going to be stuck in the middle.
Yes, unsubsidized loans are non-need based and should be able to make up the difference between the expected family contribution and the cost of attendance.
L
Hi Aaron,
Federally backed student loans still depend on the needs of the recipients. You still have to file a FAFSA. I didn't qualify for any of those loan programs. Additionally, the amount you can borrow from these programs aren't very high. These top private schools cost somewhere around $50k a year including room and board so even if you get a federal loan you probably can't cover the entire amount.
The other choice is to take out a private loan, which could get extremely expensive.