Category Archives: Education

The Wealthy Barber Lesson 7

This wraps up the last of the lessons from The Wealthy Barber, a book by David Chilton.

  • When it comes to an emergency fund, pick one that’s appropriate, but you don’t have to exaggerate the amount. If your liabilities are greater or if your income is unpredictable, a larger one may be necessary. Consider current protection such as insurance when building your emergency fund.
  • Saving for a child’s education can be tricky as there’s many different options and opinions vary on responsibility. Some parents leave the burden to the children. However, the cost of college is becoming increasingly more expensive, and often cant be funded solely by money earned during summer jobs. If a parent chooses to be willing and able to assist with college savings, there are many tax credits and tax deduction benefits. Consider a benevolent family member who could help. Another option, prepaid tution plans, may have restrict the choice of schools. There’s also education savings accounts and bacculaureate bonds. However, David Chilton suggests a different investment practice for college savings. He advises to use a well-selected equity mutual fund. This benefits in the usual ways of mutual funds, by having dollar-cost averaging, long-term ownership, and forced savings.
  • Disability insurance is frequently disregarded, yet usually one of the most critical insurance needs. A staggering fact is that one of four individuals will be disabled for at least a one year period in their lifetime. When someone passes away, they need life insurance because they are no longer an asset to their dependants and the cash flow stops. The sad truth is that a disabled person becomes a liability, causing negative cash flow, which could be financially devastating. If you think you’re covered through an employer or an existing plan, double check the policy and make sure that it provides enough support to take care of your family. If you don’t have it, get it now.
  • The last topic covered is staying informed. Money laws change frequently and new benefits and investment vehicles are constantly created. By making a plan using the practices suggested in the book, the plan should be successful in creating a wealthy and satisfying financial future, however events may occur prompting re-evaluation of a chosen strategy. Chilton’s suggested readings include Forbes, Kiplinger’s, Fortune, SmartMoney, and the Wall Street Journal. I advise to watch some TV shows, like Suze Orman and Jim Kramer‘s Mad Money. Listen to some NPR and Talk Radio that cover money advice. I also suggest subscribing to related RSS feeds and reading relevant blogs such as this one to stay current for a wealth of information.

Parents! Never Tell Your Child…

Through my youth, and even into adulthood, anytime I had a problem with anything, whether I failed a class, I didn’t get the job I wanted, or anything else, my parents always told me “You can do anything… if you just put your mind to it.” Unfortunately, they left out the rest of the sentence. I had to discover myself that it finishes with “and take appropriate action.” All the good thoughts and best intentions in the world never got anywhere further than the mind that created them, but all kinds of wonderful things can happen when action is used in combination to these thoughts. If they’d told me that, I can’t say I know how, but I know things would be different for me. So parents, listen up, if you’ve not been seeing the good things that your children deserve happen, try saying “You can do anything if you put your mind to it and take the next action.”

College Decisions : Finance Free

I got my grade for my summer class. In Introduction to Java Programming I received the highest grade I ever have. I got a 99%. Now I’ve signed up for two more classes this fall semester, and in the spring I will have one last class. This brings me to my associate’s degree.

The real question : What’s next?! I love programming, and I love games. I would love to program games. I programmed battleship with a friend for a Pascal class in 1993. There’s been a few “game development” schools that have appeared, and one close to home, GuildHall at SMU. SMU is already notoriously expensive for a 4 year degree, and I’m almost terrified (where’s Suze to inspire me with a little courage here) to find out what it costs.

My mother’s paid for the majority of my Associates, including books, and wants to continue to pay for my school. I’m not for certain that she’s fiscally fit to pay for GuildHall. While I’ve considered student loans, she advises me not to because they’re almost as bad as the IRS. GuildHall might not be feasible because of scheduling (if they have 6 hour school days, I’d have a conflict with my full time job). I have UT Arlington as my back up game plan (yes, pun intended).

I also question the value of a game programming certification vs. a degree. Aside from the fact that it is instructed at SMU Campus and has a huge industry connection (ID, EA, several others), would all that time and money be “wasted” with no sheep skin to carry home? I have friends who have been very successful using various technical certifications to further their career and increase their income. The battle-ship co-programmer recently got a raise of 35,000 (almost 50%) when Citigroup offered him a position and his previous employer, Worldcom, was unable to match. He has ALL Cisco certifications and MCSE, yet no degree. Others never have difficulty finding work with their Cisco and Linux certifications.

Does anyone have any experience or suggestions?

Your Education Is One of Your Best Investments

Education is an extremely broad subject. It can be one of your most costly expenditures. An average 4 year degree is several thousand dollars. Even if you’re not paying tuition, education can be expensive in time. Any education though, also has one of the best return on investments. With a four year degree, the average American salary increases $12,000 per year. Not everyone is interested in college, and I agree that it might not be for everyone. You should, however, always be doing something to add value to your education. This is especially important where primary schooling lacks, like financial literacy. During any week, to exercise your financial and muscle set aside time to :

  • Review articles in business and money periodicals and services like your local newspaper, the Wall Street Journal, The Motley Fool, MSNBC, BusinessWeek, etc. I also urge you to follow financial related blogs like this one, AllThingsFinancial, and SavingAdvice.com
  • Watch financial programs and segments on the news, television programs, and radio
  • Listen to educational audio programs on your commute to your job, and use the pain of that drive while paying $2.15/gal as leverage to escape the rate race
  • If you haven’t yet, check out Kiyosaki’s game “Cashflow”

Your education is well worth the time and money because it’s like a virtual launching pad to success.