President Barack Obama has been in the news recently as he invited more than 100 college presidents to DC in an attempt to expand college access, especially to low income students.
“More than ever a college degree is the surest path to a stable middle class life,” Obama stated.
I have a few problems with this. First, when did the American dream change from “becoming a self-made millionaire” to having a “stable middle class life”? If he’s trying to sell college to 18 year old kids, dangling a “stable middle class life” in front of their nose isn’t much of a carrot.
Second, putting more kids in college doesn’t make sense. Either he’s not reading the numbers provided by the Bureau of Labor Statistics, or he’s just flat out ignoring them.
Here comes the research!
Job Growth by Education Level
Using data from the US Bureau of Labor Statistics, here is a table showing projected job growth between 2010 and 2020 by education level.
So we expect 20,460,800 new jobs in the next 10 years. Fantastic! And how many of those jobs require someone to finish a bachelor’s degree or higher? The answer is exactly 4,964,900, or just 24.3%. Hmmmmmm.
If you include the Associate’s Degree and the “some college” jobs (which are really weird to me. It’s hard to imagine an employer who is not willing to hire a high school graduate, but is willing to hire a college dropout), then you’re up to 7,648,000 jobs, or 37.4%. Still not very high.
In 2012, 2.1 million high school graduates enrolled in college. Again, this is all data provided by our benevolent government. So if we have 2.1 million kids starting college each year from 2010 to 2020, we are going to have 21 million people ranging anywhere from college dropout to PhD, and only 7,648,000 new jobs. Not good.
Also keep in mind that 2.1 million per year is only high school graduates. There’s actually going to be quite a bit more college educated people when you include the non-traditional students.
So we are expecting under 8 million new jobs for college educated people, and a low estimate of 20 million newly minted college graduates and attendees. It looks like we are set up to have a preponderance of over-educated individuals.
Except we have that already. How many more reports do we need telling us that Twice as Many College Grads in Minimum Wage Jobs as 5 Years Ago, 53% of Recent College Grads are Jobless or Underemployed, and the Job Picture Looks Bleak for 2013 College Grads.
There Just Aren’t Enough Jobs for College Grads
If we think back to that table of jobs by education level in 2020, we expect 12,782,800 new jobs in the next 10 years for people with a high school diploma or less education. That number jumps to 14,025,900 jobs when you include those who attended college but never receive an Associate’s Degree or higher.
Why borrow tens of thousands of dollars if you will just end up graduating from school and getting a job that doesn’t require a degree?
Even when you account for all the baby boomers retiring (although many aren’t in a financial position to retire even if they want to), there just aren’t enough jobs for all the currently unemployed college grads and all the new ones we’ll be churning out in the future.
Maybe Barack Obama hasn’t seen these numbers. Or maybe he’s not very good at math. Or, maybe he has seen these numbers, he is good at math, AND he still wants to get as many people into college as possible.
But why would anybody want to do that?
College (And Student Loans) are Big Business
Have you been on a college campus recently? If so, you’ve probably seen a construction site. It doesn’t matter which college you go to; pretty much all of them are getting brand spankin’ new buildings. Why? Because enrollment keeps going up. People still believe you need a degree to get a good job, which is not surprising when people like the president are screaming it from the mountaintops.
If people start paying attention to the numbers and look at all the unemployed college grads, they might decide to skip college. If enough people do that, colleges start losing money. That means no more new construction. That means college professors getting laid off. That means bad news for the education business.
And then there’s student loans.
Why would the government want people taking out student loans, even if there’s a good chance they are going to default on those loans? Because even in default, student loans are insanely profitable for the US Government.
The government loans the money, they make money on the interest.
They also act as the collections agency, so loans in default are charged fees that make even more profit for the government.
Finally, the government created the laws that make student loans immune from bankruptcy, so they will literally take your tax return, garnish your wages, or even take it out of your social security check until they get their money.
The only way to get out of student loan debt is to pay them off, or die. (see the infograph at below)
College is for Some People; Not for Everyone
In general, we have too many people in college. We have too many college graduates. We have too many kids who will enter college over the next few years. Many of these people will become underemployed or unemployed, and many of those same people will be paying off their student loans for decades.
With that being said, college is EXACTLY the right choice for some people. We need college educated individuals to become the next generation of doctors, lawyers, engineers, nurses, teachers, and more.
If you are a young person and you decide to go to college, do it because you have enough money and/or scholarships to avoid student loans, or if you know what you want to be and that job requires a degree. Don’t do it because Barack Obama, your parents, or anyone else tells you that “you should”.
If “you should” is your main reason for going to college, then actually you shouldn’t.
It might not be too tough for you to assume that structured settlements markets are a recent development in the financial sphere. However, you assumption would be wrong, as most of the premier players in the annuity selling and purchasing markets have almost 20 years of operational experience.
It was actually in the mid 1990s that the structured settlements purchasing industry got entrenched, in direct response to the increasing demand of annuity owners who wanted to sell off their long term cash inflows for immediate cash. However, this is nothing as compared to the gravity of other misconceptions and myths that are prevalent among people, in terms of what they think about structured settlements purchasing markets.
1. Attorneys are reluctant to suggest structured settlements to people because the latter are likely to encash them anyways
The above is a well spread myth about structured settlements. However, if one were to observe actual facts rather than assumptions, the results of the same would be that almost 95% of people having structured settlements stick to the annuity plans. The 5% who opt for immediate cash by selling off structured settlement annuities do so only because of severe changes in their financial conditions post the structured settlement scheme. In fact, the attorney ideally wants to suggest a financial recourse that can provide for the complete financial security of the client. So, a structured settlement that can be encahsed if justified by the severity of the situation proves to be the safest option from the attorney’s point of view.
2. When a person sells off his/her tax free long term annuities, he/she is bound to pay the taxes on the payment he receives from the structured settlement purchasing company
It’s sad to note how people are misled into continuing with their crawling annuities when immediate cash requirements stare them in their face, all because they are fearful of having to unnecessarily pay taxes on encashing their tax free annuities. However, it is clearly specified in the taxation laws that tax free annuities, if converted into immediate cash, will not attract any taxes.
3. All it needs to woo a person having structured settlement annuities into selling them off is a late night TV commercial!
There could hardly be anything more distant from the truth. The very nature of Structured Settlement Transfer Acts ensures that a person having structured settlement annuities has several routes to retract on his/her plans of selling the annuities. So, even if somebody makes the choice to sell instinctively, there is a lengthy period of processes, acknowledgements and approvals that provides ample opportunity to the person to retract.
Apart from the ones mentioned above, there are some other myths prevalent in the industry. It is wrongly believed that the structured settlements purchasing industry is not regulated, whereas there are several federal and state laws governing their practices. Also, the high rate of approvals from the court tends to raise suspicions among whistleblowers, something which is unfounded.
The above article is contributed by Alex H. Alex is a seasoned blogger who covers range of topics from personal finance to sports fitness.
Now that I’ve been at this blogging thing for over 3.5 years, I have learned a thing or two about website design. It was painfully obvious that I needed to redesign Thousandaire, and I’ve finally done it.
The changes are substantial and yet subtle at the same time. I actually made the change last week and haven’t seen a single comment or twitter mention about the new design (except for when I asked people to go look and tell me if they notice anything).
The Homepage Shows Full Posts
I used to a have a big fancy slider at the top of my page, which I thought was really cool and professional looking. In reality, it just put my content one more click away from my readers. The slider is gone and now you can read the full text of my posts right on the homepage.
Research has shown that people simply ignore homepage sliders, and I personally love blogs that give me the full posts without having to click again. This was the biggest thing I wanted out of my new design.
I Have a Recommended Products Page
There are two reasons for this page. First, there are a lot of great products that I highly recommend. Some are investment products like Lending Club. Others are services like Angie’s List I use for my house when I’m hiring contractors. I also recommend the new theme I’m using on this site, and other stuff I love like my shower mirror.
The second reason for this is that most of these links are affiliate links, so if people click on them and buy something, I get a percentage of the sale. My goal is to be self employed one day, so I’m trying to generate a little more money from this site. Of course I only recommend products I actually believe in, so the fact that I might get a commission is just a nice bonus.
I’m Down to Just 3 Post Categories
You may notice that there are three links in the navigation bar: “Personal Finance”, “Politics”, and “Life”. When I really thought about what topics I cover on this blog, everything fit into one of those three.
If you are someone who enjoys my personal finance stuff but hates my political posts, you can just use that personal finance link to see the articles you enjoy most. I want to make it easy for people to find exactly what they are looking without sorting through 100 categories.
My Newsletter Signup Is More Prominent
The last major change I made was to make my newsletter signup much more prominent. It’s in the top right corner of the header, and I’ve also added a pop-up to ask readers to subscribe to my newsletter after they’ve read a post (don’t worry, you can turn it off).
My email newsletter is great because it lets me communicate directly with my readers. They don’t have to remember to come to the site and check for new posts; they just get it in their inbox. Sure, this might decrease the traffic actually hitting my site, but I’m more concerned with happy readers than site statistics.
If you aren’t signed up for my newsletter, you can do it right here:
Look Around for More Updates
I’ve only covered the main changes to the site. There are actually quite a bit more changes if you look around.
I updated the About page to reflect my new life situation and the updated goals of the site (with a new picture of me and a really hot chick). I updated my Lending Club Profit Calculator to look a little bit more fancy. I did other stuff that I can’t think of right now, so you’ll just have to click around and see.
I hope you like it, and please give me your honest feedback. I won the Plutus Award for “Best Designed” site two years ago and I was a finalist last year, so I was a little afraid to “mess with success” but I really do feel this is a better design.
Readers: How do you like the new site? Let me know in the comments.
Renting out an unoccupied room, garage apartment or basement is a great way to generate additional income. However, leasing and managing a rental unit takes thorough preparation and administrative work.
1. Research Zoning Laws
Some states place regulations on homeowners renting out “secondary suites,” otherwise known as guest houses and finished basements. Here are a few regulations homeowners must adhere to in most states:
- One “household” maximum per unit
- Restricted number of units
- Limited number of residents in the rental unit
- Required amenities (i.e. separate parking)
Consider state guidelines before making upgrades to prepare a unit for renting. A property is not worth the cost of alteration if it doesn’t adhere to the basic protocols.
2. Gauge Interest
Even if an in-home unit is legally fit to rent, it may not be appealing to the general public. Tenants have a variety of resources at their fingertips to search for rentals in any given city, under any budget and at any size. Potential leaseholders are able to compare and choose properties easily. A brand new apartment listed under the same price as a dated mother in-law suite within an occupied home is more likely to generate leads. Landlords should use the same online tools to compare their units to determine a price points or necessary upgrades prior to marketing their properties.
3. List It
Once the regulations and restorations are taken care of, property owners should advertise. Zillow allows individuals to list their rental units for free. Promoting a rental online increases the likelihood of competition and decreases the amount of time a property sits on the market. Take high-quality, bright photographs to showcase the room(s) to make an honest and welcoming impression. Keep the listing description short but detailed. Make sure to disclose any strong stipulations (i.e., no pets) on the listing, so those who aren’t a good fit don’t bother scheduling a showing.
Under federal law, property owners cannot discriminate based on race, color, disability, religion, sex, familial status or nationality. Advertisements cannot imply restrictions under any of these categories. Keep these guidelines in mind when generating an initial listing description.
4. Prepare for Management
Landlords have to be available 24/7 to deal with emergency issues. The landlord could lose valuable tenants if they don’t follow through with repairs or respond to requests in a timely fashion. With a busy job or young children, it may be best to hire a property manager to oversee the unit(s). Further, landlords must be impartial, firm and approachable. Avoid becoming too friendly with tenants, as this can make enforcing policies more difficult.
The longer a landlord is in practice, the easier the leasing process becomes. These four guidelines are a start for homeowners considering renting their spaces for the first time. With proper preparation, owners quickly gain the experience and knowledge to run smooth businesses for passive income.
Debit cards have become increasingly popular. People now spend more on debit cards than they do on credit cards. When you compare debit cards to cash or checks, then the benefits are obvious. For those of us who remember writing checks at the grocery store, or searching for exact change, then we know why we love debit cards. Gone are the days of balancing checkbooks (did that check clear or not?). Gone are the days of going to the bank to get cash, and then going to the store. Debit cards made things instant and easy.
But, when you compare debit cards to credit cards, the case becomes far less convincing. Here are 5 reasons why you should reconsider your debit card habit:
- Temporary authorizations: an excuse for someone else to hold onto your cash. When you book a hotel, open a bar tab or go to the gas station – the merchant may put a temporary authorization on your account. They do that to protect themselves against the risk that you don’t have enough money to pay. For example, if you give your card to a bartender – they may put a $100 temporary authorization (block) on your card. At the end of the night, they will then charge you for your drinks, and release the temporary block. But, it can take a few days for that block to go away. That is your cash! You now won’t be able to access that cash for a few days. With hotels, the numbers are even larger.
- Debit cards don’t have a lot of the benefits that credit cards offer. For example, many credit cards offer car rental insurance. Good luck finding that with a debit card.
- You do have fraud protection – but it will be very painful. If someone steals your credit card and makes unauthorized charges, they are using your credit line. If they steal your debit card – they are using your cash! Sometimes the appeal process can work very well (the bank credits your account immediately, and you win). But, it can go wrong and take a lot of time. Do you want your cash being held by fraudsters? And fraudsters don’t tend to steal small amounts.
- You give up the opportunity to have free money for a month. When you use a credit card, you are given a month to pay, without any interest accruing. You are – in effect – being given an interest-free loan. When you use a debit card, the money is gone immediately.
- You give up the opportunity to earn rewards. Credit cards give you the opportunity to earn very rich rewards that could be worth thousands of dollars a year. From cashback to free flights, credit cards can really pay off.
So, why are debit card rewards and benefits so few and far between? There is actually an easy explanation: regulation. With recent regulation, merchants pay banks a lot less for debit card transactions than they do for credit card usage. As New York Times article reveals, merchants only pay approximately 20 cents per transaction. For credit cards, they pay approximately 2% of every transaction. So, on a $500 purchase at Target – the bank would get $0.20 for a debit card transaction, or $10 for a credit card transaction. The reason banks give away more benefits on credit cards is because they can afford to do it.
But how much could that mean for you? One of the most popular ways to use credit cards is to earn frequent flier miles. To understand just how much you could get every year, look at calculator for a United Credit Card. Input how much you spend every month, and you will see how much you get back. In most cases, it is over $1,000 per year.
With a credit card, you can:
- Earn over $1,000 per year in rewards
- Receive benefits like rental car insurance
- Receive an interest-free 30 day loan on every purchase you make
- Receive real fraud protection – that ensures banks don’t hold your cash while they investigate
So, why do people still use debit cards over credit cards? There are a few reasons:
- They don’t understand how good the deal is with credit cards. Hopefully this article has helped.
- They don’t trust themselves with credit cards (will just max out their card and go into debt). We can’t help you with self-discipline, but there are plenty of tools available to help you avoid a debt trap. From text and email alerts, to calling the credit card company and asking for a credit limit decrease – you can find ways to make sure you don’t spend more than you should.
- They don’t trust the credit card companies. This lack of trust is well earned. But, with the Card Act, some of the worst practices (risk-based re-pricing, double-cycle billing and others) have been eliminated. For example, almost all issuers have completely removed the over-limit fee.
The credit card is still a great product, which offers incredible benefits when used properly. If you only spend what you can afford, and pay off the balance every month – you will be much better off with credit cards. Leave those debit cards at home!
Who knew Ultimate Frisbee could be a dangerous sport?
I was playing Ultimate Frisbee about 10 days ago, which for those who haven’t heard of it is like a combination of soccer and football, only played with a Frisbee.
I was out on the field having fun and playing defense, when a guy standing about 10 feet away from me threw the disc as hard as he possibly could. And instead of soaring 50 or 60 yards in the air to his teammate, after about 10 feet it ran into an obstacle: my mouth.
Yep, I took a Frisbee straight to the mouth. The good news is that I technically made a good defensive play and caused a turnover. The bad news is that I immediately could taste blood filling up my mouth.
At this point I was angry and in pain, but I also REALLY wanted to finish the point and score. I was spitting out mouthfuls of blood as I was running around out there, but after about 2 or 3 minutes we scored and I ran off the field.
I immediately grabbed some ice and put it to my mouth. I touched my teeth and my two front teeth were loose. Luckily they hadn’t fallen out completely, but I felt exactly like a 7 year old about to get a visit from the tooth fairy.
I went to the ER, and while I was in the waiting room I tried to push the teeth back in place. Fun stuff.
When the doctor saw me he prescribed some pain pills and told me to see my dentist on Monday (the accident happened Saturday afternoon). I called the dentist’s emergency line and set an appointment for Monday at 7am.
After a painful weekend, I saw the dentist and he told me that I might be just fine. The teeth would firm back up and as soon as the pain was gone I could be in the clear.
However, he told me to look out for either of the teeth turning gray. If that happens, I can’t just fix it with teeth whitening gel by smile brilliant; I would have to go get a root canal.
After a little over a week, it looks like I have a root canal in my future. One of my teeth has definitely started turning gray, and I can’t quite tell on the other one. Looks like I need to make another dentist appointment.
I Should Have Worn a Mouth Guard
All of this could have been easily prevented if I had worn a mouth guard. With protection for my teeth, I probably would have been dealing with a bloody lip at worst.
And even if I had tooth problems while wearing the mouth guard, I wouldn’t have been liable for the dentist bills. The mouth guard I bought from Shock Doctor comes with a $10,000 dental warranty, meaning they would pay the first $10,000 of dental bills if I got hurt while wearing their mouth guard.
Luckily I have health and dental insurance, as well as a Health Savings Account that has thousands of dollars in it, so it’s not going to hurt me much financially to pay for all the dental bills I have incurred and will incur with any more work that needs to be done.
From now on, I’ll be wearing a mouth guard any time I’m playing sports, even if it is one that seems as harmless as Ultimate Frisbee. I’d rather not deal with the pain of another root canal or a chipped tooth, and I don’t want to be financially responsible for any damage.
Readers: Do you use a mouth guard when you play sports?