Families Should Be Rethinking The College Option

Excessive College debt will be the next financial crisis, and not just for families.
Excessive College debt will be the next financial crisis, and not just for families.

College Perception

Many people will think I am freaking crazy for this article, but I have very strong convictions on this subject of serious debt before income, as I believe most of you share a similar opinion.

There is an interesting post with an awesome InfoGraphic at ProCon.org, it is well worth a look.  I looked at the chart and thought the number would be way out of line but they are still very scary for the cost of attending college today. The one thing I had to consider is the chart did not take into consideration room and board for college students which can be as much as the tuition itself. Everyone understands, a great number of collegiate students strive to have that independent “College Experience”, opting out of attending a school allowing them to reside with the parents thus saving a great deal. It seems it may be cheaper to purchase a used car for your child to attend a not too distant college than having that “College Experience”.

 

http://college-education.procon.org/view.resource.php?resourceID=005532

I am baffled as to the reasoning for debt before income is the normal and accepted in the system of American higher education as opposed to…..Austria where higher education is free.  Here in the United States a standard State public four-year college program and many other colleges have buried many people in unforgivable, unsecured debt before providing the chance for economic generation. Now I don’t want to put all the blame on the schools, they are getting what they can, which is the standard Capitalistic money hustle game at its best. I got what you want so you are going to pay. I will have to put a good deal of the blame on the American government, allowing these institutions to charge these fees to their customer. The reason I blame the government is because the government is the underwriter of many of these loans.

Let me ask you this simple question, If the Government stated, for 2017 we will only fund up to 63% of the total funds based on the median tuition loan amount given in 2015? Do you think Tuition for public and private colleges across the country, including the price for room and board on college campus’ would drop across America overnight? HELLS YES!

I am seriously amazed at college financing. Based on the information presented by news reports, media outlets, Reddit.com, forums, and friends concerning student loans and the amounts they and the public owed to Sallie Mae and Fafsa (Free Application for Federal Student Aid). The sum of freakish sums of money individuals and families borrowing for sending their children to college or university over several years is scary.

The Illusion of a sure thing

In my opinion, the student load epidemic makes the housing bubble look like we were 30 days overdue on a credit card payment. Student loan debt is out there lurking in our society and it is definitely a burden on the families and individuals who have participated in the fiasco of being in the college financial system. When I think about the situation student loans are basically unsecured debt ranging from $10,000.00 to excess of $300,000.00. Heaven forbid if a family has several children attending a major public or private university. I just don’t understand the logic. I do understand the need for an applicable education, most of which helps you to have a healthy conversation, because a student does is not place directly into a curriculum to achieve their educational goal.

I can remember prior to 2008 young college attendees were obtaining personal credit at an alarming rate, major credit card companies were getting into the act big time, basically giving lines of credit to people who had a pulse and appeared on a university campus at the credit card company’s booth. Believe me, the student loans and personal credit cards were flowing like wine at a wedding and they have not stopped, just switched gears. Now private companies have gotten into the act of providing student loans and financing. These private companies I hear are relentless 6 ~ 12 months after a student’s graduate or has not been enrolled in a college or university program.

My youngest daughter felt the aftermath of the 2008 credit bubble crash.  She could no longer personally apply for loans after 2008 and obtaining grants was like pulling teeth with the Hubble telescope for some reason, most likely our household income. We were not well off in 2008, our house suffered for almost 2 years with decreased income during this period. We found she became lumped into the age cap placed on lending to minors. Effectively the measuring bar to qualify for student loans raised. WHICH MEANS, parents assume responsibility for their children’s education as primary borrowers with the child being possibly included to participate a secondary signer on the financial debt. WHAT!

Here is the funny little thing about parents providing for their children’s college education. If a family’s net income is let’s say, annual net $110,00.00 dollars . Many state institutions can exceed $22000 ~ $40,000.00 dollar a year, not including any other amenities the child will need to survive, the college experience may exceed 20%~36% of a family income. The number I am using was the college my daughter was attending. (I lost the battle in the family for her to go to a different school), and we did not make that much money so the percentage was higher, much higher. Therefore if you have a household income of less than $50k~$70K annually, oh boy look out.

Here is a good link from CollegeData.org with the 411 listing the State resident and Non State resident of a few schools. CollegeData411. Feel free to use this site CollegeData.org and check the data for yourself concerning tuition, $30K-$40 is not uncommon.

Default: the Student Loan Documentary (Broadcast Version)

Please, Please, Please watch the documentary, Default: The student loan documentary, the entire documentary may be found on Netflix, or Hulu. This is a very sobering film.

How can anyone repay these student loan amounts prior to securing a SAFE method of providing for their own family’s basic living requirement?

There is an answer. Don’t attend schools of higher education requiring a contract with the devil in hopes for a better life at some point in the future. If you cannot afford to attend college and leave the program without payable debt, look at different long-term strategies for education. The financing of our higher education system has placed a serious catch 22 upon the American public seeking that American Dream, who are bringing home less than $200K or greater annually.

The big kicker concerning college and universities for the middle class, only half graduate with a degree who enter college, but that debt remains even if the attendee does not complete the education.

You may be asking, what are the alternatives?

I’ll tell you, go to a 2yr college, community college or attend a trade school then figure out exactly the direction to pursue educationally. Start a small business, at least if you fail with a small business there is some usable experience.

If I am ranting, it is not just for my own sake, well maybe a little but  I am passionate about families, individuals, the country and world to live as free and fully as possible. I truly understand the stress financial obligations many people experience, and desire for American’s to experience as little financial stress as possible. My major reason, stress of any sort particularly financial, detracts from all areas of your life.

Going forward for anyone looking to further their education, take into consideration so serious planning is required to educate yourself or your family, and I hope before you venture forward with caution and a low financial impact strategy.

Be Free, Be loved, Be Fulfilled

and go Live The Billionaire Lifestyle

Emmitt Muckles

 

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11 things (Tune out the noise)

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Welcome to a world of 24/7 information, the dumbest time in modern history.

Most of the information is irrelevant for you to prosper.

The information is here so you pay little attention to yourself.

Life has basic rules, be, live,  love survive to do it more.

Don’t let media control you. Why do you think they call it “television programming” versus “television content”,  programming is to program you.

Beat the system, be different, develop true wealth versus the representation of wealth.

Love 1% more each day.

The money is there, you just need to claim it.

Give what it is that you seek.

Each 1 must teach 2.

The biggest secret you may not grasp.
Someone does LOVE you.

Have an new awesome life.
Now go live The Billionaire lifestyle
Sincerely
Emmitt Muckles

Photo credit: 365.060 – Watching TV via photopin (license)

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7 Helpful Tips Before You Destroy Your Credit Cards

USE THESE CREDIT CARDS TO YOUR ADVANTAGE
USE THESE CREDIT CARDS TO YOUR ADVANTAGE

photo credit: won’t hurt you no more via photopin (license)

We all know credit cards are a fact of life. I personally have very mixed feeling about them but have several and have come to terms with the way the world works. Most of time my credit cards  are imprisoned in a jar somewhere idle waiting for me the warden to use them or release them from their jail sentence. I was a long painfully stressful road to get before getting to that point of restraint. They were like crack to a crackhead, and my name was Pookie, or Tyrone Biggums (New Jack City and Dave Chappelle reference). I strictly use a single credit card for an express purpose which I will detail later in this post(See number 5).

The road for me was battling credit card debt, until my wake up moment back in 2010. After  looking at my various credit card balances and wondering what I had actually purchased,  most of which I could not identify, the hard decision to eradicate those balances, like they were cockroaches. I hustled, worked, sold stuff, and did nothing many Friday and Saturday nights except workout, play video games and read Facebook walls.

Here is what I learned:

1.) Only have a credit card that you can pay off in full within 30 days, max length 90 days paid in full worst case condition with no new purchase on the card. Having a credit card requires some discipline and willpower. I believe in you can do it!

2.) Sign up for your credit cards company’s website to get alerts, and manage your account. Sounds simple but it makes making payments much easier in case you have one of those lapses in judgement when the payment is due and need to pay it right away.

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photo credit: <a href=”http://www.flickr.com/photos/23307937@N04/3019181651″>rid of credit card debt</a> via <a href=”http://photopin.com”>photopin</a> <a href=”https://creativecommons.org/licenses/by/2.0/”>(license)</a>

3.) Set up a credit card auto pay. When the payment is due it is paid on time, period! Make sure you have the minimum payment required in your bank account when the payment is due. If you have problems balancing your checking account, or are a debit card maniac then be careful so you don’t acquire overdraft fees. It will defeat the purpose of auto pay.

4.) Choose a card that has cash back so you can get more than just an easy way to spend money. I use my cash back and perks for things like birthday presents, and gifts for others so I don’t have to keep running to the store.

5.) Use your credit card as a debt manager. This is the parts I’m talking about from the earlier portions of the post. I have one credit card used for paying my recurring bills such as Utilities, internet, subscriptions and such, you can even do it for your rent in some places. Many places will accept credit cards for payment and I actually wish more would and here is why.

I have all my bills going to one central location so that I know they are being paid on time, I can dispute them if it is wrong, and I have one overall bill to pay at the end of the month.

You have no idea how putting your bills on autopilot can affect your life for the positive. I travel a great deal and the last thing I want to do is get off a plane and try to pay a bill. So here is the perks of number 5 in this list, bills paid on time, cash back, no STRESS! I have an alert in the calendar on my phone telling me 3, 2 and 1 day before my credit card payment is due. That alert goes across all my computing and smart devices. I also do this for the other bills hitting my credit card.

6.) Chose a credit card that is no greater 1.5 times your monthly bills  or 75% of your monthly income so that you can’t really get out of control. If the credit card company increases your limit and you have not gotten a raise call them and ask if it can be lowered  back to the original.

7.) At least once a year if you payments have been on time for about 8 ~12 months, call the credit card company and ask for a lower interest rate or if they have a better program than the one you are currently enrolled. If they don’t want to help you tell them you will stop using the card and cancel.

Now go live The Billionaire Lifestyle

Emmitt Muckles

 

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Money & Debt = Financial Comfort food = Retail Therapy

debt_comfort_food

Everyone has that thing which brings them to their happy place……. for a short period of time.  If you poll a one thousand people you will find everyone has a comfort vice.  Many people use drugs, some people use work, others use television while many people use consumerism/materialism and the illusion of wealth as their comfort vice. If you wonder where the term retail therapy come from, think comfort debt.

In years past I used money,  consumerism, materialism and debt like a drug.  When my emotional state was down, relief was had by purchasing some truly unnecessary item to divert my attention away from my real life problems and issues.  I have haunting memories of being depressed because I did not have enough cash on hand in my bank account. With my bank account being in the red zone and depression filling my emotional tank, the only relief I could muster was by buying something on credit to make me feel as if financially everything was OK. Let’s face it, being a human being is an exercise in excess and restraint, and I, like many of us humans had far more excess than restraint.

What most wisdom would suggest is life should be is a management of moderation. Realistically, life is more of a roller coaster, and when the sea we are sailing on is to calm, we feel justified to jump in shark infested waters with just a life preserver or knife, just to keep things exciting more often than not.  Our issues are compounded when judgement,  external acceptance and peer pressure come into the fold.

12932990_10208367892530867_1197993098941897_nThink about the majority of the purchases you had made in your life. How many of those purchase were, I want therefore I need? A prime example is purchasing an automobile. Sure, we all understand the purpose of an automobile is to get you from point A to point B safely. Usually when shopping for an automobile the basic premise is a minor considerations. The pressing issue is how the automobile will make us feel, the physically and emotionally comfortable of the vehicle, the emotional safety and how people will judge us as we are associated with the automobile as a status symbol and envy project. Instead of purchasing a Prius which is a safe, economically sleek get it done vehicle, we opt for a Dodge Challenger. I as most of us, have made those purchases.  The bigger issue comes from the fact of most car purchases and many other items are facilitated via a lease or credit terms. Putting you into depreciating debt. the item just purchased, be it a Television at Best Buy, booming car stereo, latest mobile phone (Don’t get me started on those), automobile or just about anything else in this world loses its value the exact moment you take “possession”. I want you to pay attention to the word possession vs ownership, because until you pay the asking price, lease and financial fees of the acquired product technically you are not the owner.

I recently found a purchase/lease agreement for a 1990 Geo Prism I once owned (eventually), the sticker price was $12570.00. If I had not paid the car off early, the car would have cost me something like $20,000. I would have gotten straight pimped. That is why I now purchase cars I can easily have in my possession for a minimum of 10 years.

It all comes down to comfort food, which relates to my earlier post “Are you financially Fat or Obese” . Are you just financially eating yourself into the black hole designed for you to stay in bondage with the chains of comfort holding you down. I wonder how the consumer landscape would appear if we could all remove our emotions from the equation of making purchases.

Let’s make wise choices and be free.

The Billionaire lifestyle Coach

Emmitt Muckles

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