For he satisfies the longing soul, and fills the hungry soul with goodness. Psalm 107:9
Lord, may we never take for granted all the things that come to us so easily each day. And may we be reminded that you are the giver of every good and perfect gift.
All right, if you’ve followed me for any length of time, you know that I’m passionate about a couple of things. Number one, I’m passionate about helping young people start on the right foot with money—and in life. I’m also passionate about tackling anything that leads young people to make terrible choices with their money. I always say that the caliber of your future will be determined by the choices you make today.
Listen, guys, that is so true—especially when it comes to college. For some of you, college may be just around the corner, while for others it may still be a long way off. Either way, it’s never too early to start planning!
But planning for college while you’re in high school is just one of those things that not enough people talk about. I know for a fact that nobody ever talked to me about it, and I ended up making a lot of mistakes as a result. There are so many things I wish I would’ve known before I ever hit the college campus.
THE HUGE FINANCIAL CRISIS THAT’S THREATENING STUDENTS
Here’s one thing I wish someone had told me about: not taking out student loans for college. But no one told me not to take out student loans, so I did—I took out a bunch! The sad thing is that I didn’t even need student loans because my college was paid for with a scholarship and my dad’s military benefits. But someone told me I could get some money by filling out the student loan form. (That was a stupid idea.)
Let me be real with you. I didn’t even understand what a student loan was at that point. And I certainly didn’t know about the dangers of debt. I’m telling you: taking out student loans was one of the worst money choices I made as a young man. And it took me years—YEARS—to pay back those student loans. That bill showed up in the mail every. single. month. And I hated it.
It wasn’t just a problem for me—student loans are a huge problem in our country. Today, the student loan crisis is the number one thing holding students back from achieving their dreams after college. It’s true. According to the Federal Reserve, the national student loan debt is 1.5 trillion dollars .1 Y’all, that’s trillion. Not million or billion. Trillion. Dude, that’s a lot of money.
Having to pay back student loans is causing millennials to delay some things in their lives. For example, did you know that 55% of millennials who are paying on student loans say they are postponing having children? Or that 41% are delaying getting married? Or that 86% have made career sacrifices because of their student loan payments?2 Y’all, that’s ridiculous.
In my opinion, the biggest college money danger is the lie that student loans are the only way to pay for college. Bump that! That’s just not true.
It takes some hard work and sacrifice, but it is possible to get a degree without borrowing a dime. There are some specific things you can do (and should be doing) throughout middle school and high school that will kick-start your debt-free college journey! Here are a few of them.
HOW TO LAY AN ACADEMIC FOUNDATION IN HIGH SCHOOL
1. GET GREAT GRADES.
One of the most important things you can do to prepare for college is get killer grades. Listen, I get it. Grades may not be your thing. The reality is, though, that when it comes to planning for college, grades are super important.
When it comes to looking for scholarships, some of them require a certain GPA (grade point average) for you to be able to apply. So your grades can end up making you some money for college. Does that change how you view those assignments and tests now?
2. LEARN HOW TO STUDY.
In addition to your grades, just learning how to study better will be a huge help in getting ready for college. And honestly, it’s going to help you in high school too. That means setting aside the right amount of time to get your homework done. It means spending time studying for a test—and giving yourself time to get some rest too.
There are lots of ways to study: Some people want to study alone, while others prefer to study with friends. Some people want it completely quiet, while others need some music or some noise in the background. Some people want coffee, while others need flaming hot cheese puffs. Find what works best for you.
3. PREP FOR THE TESTS.
Don’t forget about the ACT and SATs, you guys! Use prep books, take practice tests, and get a tutor if you have to. And don’t be afraid to take the test multiple times. Your score really can make a big difference when it comes to earning scholarship money and figuring out which college courses are right for you.
HOW TO LAY A FINANCIAL FOUNDATION IN HIGH SCHOOL
I get frustrated all the time when I hear, “Anthony, the only way to go to college is with student loans.” No, it’s not. That’s just what culture wants you to believe.
Don’t get me wrong, I know college can be expensive. But I also know there are ways to save on some costs, get free money with financial aid, and pay cash for your education. It’s not going to be easy, but it can be done. Really.
Besides student loans, which I want you to avoid, college financial aid also includes scholarships, grants, and work-study programs. Let’s break those down:
1. SCHOLARSHIPS
Scholarships are free money to pay for college expenses. You don’t have to pay back scholarships—that’s dope! Most scholarships are merit-based, meaning you have to do something to earn them—like get good grades or be an athlete. And you do have to meet certain criteria, fill out an application, and write an essay (usually). But it’s worth your time.
For example, let’s say you spend an hour completing four scholarship applications. Later, you find out that you got one of the $500 scholarships. That was $500 for an hour’s worth of work. You’re not going to get that much money flipping burgers.That’s why I tell high school students to spend some time every day—at least an hour—searching for college scholarships. Make that your part-time job. Make it a priority. I’ve personally known several students who were awarded scholarships that not only paid their tuition, but also paid them money each semester just to go to school. That’s right! They got paid to go to school. How awesome is that?
2. GRANTS
Grants are also free money to pay for college expenses. Grants are generally need-based and typically awarded based on your family’s financial situation. Grants may be more difficult to find. They have stricter rules and criteria, but that doesn’t mean you shouldn’t search for them.You may find a variety of federal and state grants. For example, a Pell Grant is one of the most common federal grants. Some states even have grants specifically for students going to an in-state school. Make sure to check all available grants to see if you qualify.
3. WORK STUDY
Work-study opportunities through a college involve . . . work. Yep, that’s why it’s called work study—you work and study. Don’t be afraid of a little work while you’re in college. Some of the jobs may even let you study when you have downtime working at a desk. You won’t get rich with work study, but you’ll earn a little cash that can help cover some of your expenses.One great way to work on campus is to become a Resident Assistant (RA). RAs monitor the dorms and help out with student activities. The trade-off is that you may get free room and meals, as well as a small amount of money. That can help you save a ton!
YOU CAN GO TO COLLEGE DEBT-FREE
Do you know what my answer is whenever anyone asks me, “Anthony, is it possible to graduate from college completely debt-free?” Absolutely! Do you know what it takes to get that debt-free degree? A plan. And a decision.
I wish I could go back and do some things differently, but I can’t. What I can do is help you avoid the same mistakes I made. My new book, Debt-Free Degree, will guide you through all the things you should do throughout high school to get on track for college—and graduate with no debt. You can to do it all without the burden of student loans. You’ve got this!
Written by Anthony O’Neal from AnthonyONeal.com
While we are close to saying goodbye to 2019, I have discovered that many may be unaware of the implementation of 4 important new auto laws in 2018. While many may say ignorance of the law is bliss, there can be consequences to that ignorance. To avoid any cost consequences to your pockets, you should be aware of the following:
1.”Move Over” Law
As of July 1, 2018, Nevada drivers will have to extend the same safety precautions to the Department of Transportation vehicles as required for emergency response vehicles. Drivers will have to move over if possible and give way to NDOT vehicles with lights on or those displaying flashing lights and give them extra room on the roadway.
2. Use of the fast lane
Slow drivers in the fast lane holding back traffic behind them may be subject to a ticket under another new law coming in to effect in July. This law is intended to keep traffic flowing smoothly and cut down on the instances of road rage.
3.Pets in hot cars
Animal rights supporters will be happy to learn that under another new law in 2018, law enforcement, animal control, and other public safety workers are now allowed to use reasonable means to remove pets left unattended in vehicles in extreme weather conditions without fear of civil liability. Another law raised the penalty for leaving a pet in a hot locked car to the same level as leaving a child in the car.
4.Minimum Insurance Limits
The minimum insurance limits each driver is required to carry is increasing later this year from $15/30/10 to $25/50/20. This means a driver will be required to carry insurance of $25,000 per person, $50,000 per accident for bodily injury and $20,000 for property damage only. Nevada was only one of six States that carried such a low limit and increasing the minimum limits will hopefully go some way in helping to protect innocent victims injured in car accidents. However, it is still important to look at your insurance coverage and check whether you have med-pay (medical payments coverage) or UM/UIM (uninsured/under insured coverage) in case the driver who causes an injury accident has no insurance or not enough insurance to cover your losses.
REGISTER HERE
Nowadays, everyone seems to be an expert on investing. How much you should invest, where to put your money, and when to get out before the value drops. So, who do you believe? What are the right answers? Why does this stuff seem so difficult?
I understand how you feel. The financial industry makes investing way more complicated than it has to be. There is a lot of bad advice out there when it comes to your financial future, and many people get overwhelmed when they’re finally ready to start investing. But there’s an easy approach I use, and it’s a good rule of thumb. Not just for me, but lots of other people.
Here it is: Every month, invest 15% of your gross income into tax-favored retirement accounts.
That’s it. I know it’s not trendy. It won’t make headlines or get you on the cover of a magazine. But it will get you where you want to go—to your retirement dream.
So why invest 15%? Good question. Let’s talk through the answer.
HOW MUCH YOU INVEST MAKES A HUGE DIFFERENCE
The U.S. Census Bureau says the median household income is around $59,000.(1) Fifteen percent of that would be $8,850 a year, or $737.50 a month. Over 30 years, that could grow to $1.6 million, assuming a 10% return. Sounds awesome, right? Who doesn’t want to be a millionaire?
But what if you only invested 10% of that gross income? That would be $5,900 a year, or roughly $492 a month. Invested over 30 years at the same rate of return, that percentage could get you just over $1 million. Not bad. But you’ve lost out on $600,000 you could be used to fund your retirement dream!
What about if you dropped that 15% down to 5.5%—the average personal savings rate in the U.S., including retirement savings and emergency funds? (2) At that percentage, you’re investing $3,245 a year, or around $270 a month. Over 30 years, assuming that same 10% rate of return, you could be looking at $586,256.
I know that’s a lot of numbers, so here’s a quick summary: Investing the average amount could get you about $586,000 for retirement. Choosing to be smarter than that could mean $1.6 million.
Which do you want to do? Yeah, me too.
SOCIAL SECURITY WON’T REPLACE YOUR INCOME
I’ve heard a lot of people say that they’re still counting on Social Security to pay for expenses during retirement. That’s a bad financial plan. In 2017, the average monthly benefit for retired workers was $1,369 a month. (3) That’s only $16,428 a year. To give you some perspective, the federal poverty level for a family of two (that’s you and your spouse) is currently $16,240.(4) Is that a wake-up call? I hope so.
A lot of people ask me about whether Social Security will be around when they retire. The truth is, I don’t know. Nobody does. Conventional wisdom says the program will stay in place, but the amount retirees get every month could shrink. If that’s true, then you don’t want to depend on it for your retirement income.
YOU’VE GOT SOME BIG EXPENSES COMING IN RETIREMENT
I know what you may be thinking: My monthly expenses will be much lower in retirement. I won’t have to worry about a mortgage because I plan to pay it off before I retire. My kid’s will (hopefully!) have graduated by then, so I won’t be paying for college. My gas costs will go down because I won’t be driving to work every day . . .
Yes and no. Some costs may disappear or drop, but you’ll still have to pay property taxes and insurance and utilities and all those other monthly expenses. Plus, you’ll have one major expense in retirement: healthcare. And that’s a whopper of a bill.
Fidelity estimates that a 65-year-old couple will need $275,000 for healthcare costs in retirement. (5) Now that doesn’t include any long-term care costs, which could reach around $138,000 per person. (6) If you’re married, that means you need to be ready to pay over $500,000 for your and your spouse’s medical needs in retirement. Even if you’re healthy now, the Administration on Aging estimates that people turning 65 today have almost a 70% chance of needing some kind of long-term care in their remaining years. (7)
HOW DO I INVEST 15% FOR RETIREMENT?
The first place to start investing is through your workplace, especially if it offers a company match. If your employer offers a Roth 401(k) or Roth 403(b), then you can invest the entire 15% of your income there and you’re done. With a Roth option, you contribute after-tax dollars. That means your money grows tax-free, plus you don’t pay taxes on that money when you take it out at retirement (although the match is taxed). Talk about making investing super easy!
If your employer matches your contributions to your 401(k), 403(b) or Thrift Savings Plan (TSP; a plan for federal employees), you can reach your 15% goal by following these three steps:
- Invest up to the match in your 401(k), 403(b) or TSP.
- Fully fund a Roth IRA. (If you’re married, fund one for your spouse, too.)
- If you still haven’t reached your 15% goal and have good mutual fund options available, keep bumping up your contribution to your 401(k), 403(b) or TSP until you do.
For example, if your company will match 3% of your 401(k) contributions, invest 3% in that account and then put the remaining 12% in a Roth IRA. If that remaining 12% would put you over the annual contribution limit for a Roth IRA ($5,500 if you’re under age 50, $6,500 if you’re 50 or older), max out the Roth IRA and then go back to your workplace 401(k) to finish out investing 15%.
Here’s an example:
If your gross income is %59,000, then 15% of that is $8,850. Follow me below.
- Contribute to your workplace 401k to get your full company match. If your company matches your contributions up to 3%, then you contribute 3% on an annual basis! 3% of $59,000 works out to be $1,770.
- Fully fund a Roth IRA. The federal limit for funding an IRA has increased to $6,000 a year.
Since we have invested $1,770 in our 401k to get the match and another $6,000 in our Roth RIA, we have so far allocated a total of $7,770. But our goal is to invest the entire $8,850. Remember? What do we do with the other $1,080 we are to invest? Where does it go?
- We go back to the company 401k and invest what is left of 15%. In this case, it is $1,080.
So, when we are done, we have invested a total of $2,850 (for a total of 4.8% of our gross) into our 401k and $6,000 (which is 10.1% of our gross) into our Roth IRAs. The two contributions together make up 15% of our gross income.
I want you to notice two things: First, you need to invest 15% of gross salary, not your take-home pay. Second, do not count the company match as part of your 15%. Consider that extra icing on the cake!
SUPERCHARGE YOUR INVESTING
Whether you invest through your workplace plan or an IRA, you need to set up your account for automatic withdrawal—preferably with a percentage, not a flat amount. Your money will go straight from your paycheck to your retirement account. You won’t even see that money. That way, you won’t be tempted to skip investing to spend that money on something else.
Automatically withdrawing a percentage of your income from your paycheck also increases how much you’re putting away over time. For example, if your annual income is $59,000, you’d be putting away $8,850 a year. Let’s say your salary increases by about 3% a year for 10 years. At the end of that decade, you’d be making just over $79,000 a year and investing a little over $11,800 annually. See how your contributions increase? That’s a good thing!
So, what does that get you in the long run? If you keep investing 15% of your income no matter how much you make, you could reach the $2.1 million mark in 30 years, assuming a 10% return. If you increase your lifestyle instead of investing the raises you get, you could have $1.68 million in 30 years. Now, I know, that’s still a lot of money. But you could miss out on over $420,000 for your dream retirement! That amount would put a dent in any medical expenses you might encounter in your golden years.
IT’S TIME TO TAKE ACTION
Listen to people . . . what happens next is up to you. Your financial future is in your hands, not someone else’s. You start on the path to your dream retirement the moment you take that first step. Knowing this information won’t change your future if you don’t act on it.
Investing 15% might feel like a big step. But whether we like it or not, the clock is ticking—and now is the time to act! If you want to go from floating with no real plan to on track and investing in your family’s future, you have to create a plan and stick to it.
If you still have questions about investing, talk to your financial advisor. If you don’t have one, check out a SmartVestor Pro. These are the people I use to help me with my own investing, and they want you to succeed with money as much as you do!
Ready, set, go!
Written by Chris Hogan from ChrisHogan360.com