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Saunders Learning Group, Newton, KS Affording College Now Module Three: Savings and Investing for College From the Author of “College Without Ramen Noodles”
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Saunders Learning Group, Newton, KS
Affording College Now Module Three: Savings and Investing for College
From the Author of “College Without Ramen Noodles”
Saunders Learning Group, Newton, KS
Yes, You Can Go To College
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Saunders Learning Group, Newton, KS
3. SAVING AND INVESTING FOR COLLEGE
1. Why College 2. Cost of College
4. Financial Aid 5. Making College Affordable
Saunders Learning Group, Newton, KS
Myth Busting
Common College Savings Myths: Myth: “All college savings plans are the same.” Fact: College savings plans differ is a variety of ways (tax benefits, investment returns and flexibility) Myth: “I’ll borrow money for college, I can better afford it later” Fact: It will cost more to borrow and pay interest than invest and earn interest. Myth: “It’s too early to start saving for college” Fact: The magic of compound interest is a power you want to use, starting early and saving regularly will help make college affordable.
Saunders Learning Group, Newton, KS
Current Trends • Half of U.S. families aren’t saving for college. • 45% of those that do, use a savings account • 29% use a 529 College Savings Plan
Saunders Learning Group, Newton, KS
When People Start Saving for College
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Major Life Events that Influence the start of College Savings
1. Birth of child – 34% 2. Child starts school – 24% 3. Learn about college cost from family – 20% 4. A gift of money from a relative – 15% 5. Advice from a financial advisor – 9%
Saunders Learning Group, Newton, KS
Comparing College Savings Accounts
Understanding the different tax benefits and features of savings accounts for college can help you find the right one for your needs.
Source: Salle Mae, How America Saves for College, 2014
Saunders Learning Group, Newton, KS
Investing vs. Borrowing Simple fact: It costs less to invest now than to borrow later. When you borrow for college, you pay interest. When you invest, you earn interest, potentially capital gains, dividends.
43% of high-income families and 61% of middle-income families don’t have a plan to pay for college. Source: Sallie Mae, How America Pays for College, 2014.
A BURDEN FOR EVERYONE
Debt load for parents has doubled in last 10 years to
$33,800 and for Students it’s more than $29,000 (as of 2012)
Source: The Institute for College Access and Success, December, 2013
IT TAKES A PLAN
Saunders Learning Group, Newton, KS
Why Starting Early Saves You know college costs are high, but when should you start savings for your child’s college education? ASAP
1. Start at Birth = $2,121
Annual Savings Needed
2. Start at age 6 = $3,059
2. Start at age 12 = $5,101
Saunders Learning Group, Newton, KS
Start Early Start Small
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Saunders Learning Group, Newton, KS
Starting Early
Saunders Learning Group, Newton, KS
Starting With Small Amounts
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Saunders Learning Group, Newton, KS
The Case for Stocks: Long-Term Investing
Starting a college savings plan early allows more time to hold investments with potential for higher returns, helping to beat the increase in the cost of college.
Source: J. P. Morgan Asset Management
Saunders Learning Group, Newton, KS
Invest More, But Pay Less Some savings plans, like a 529 plan allow larger contributions that can help you pay for much of college from your investment earnings.
Saunders Learning Group, Newton, KS
529 Plans – Tax Efficient A 529 plan has the potential to grow faster for college expenses than a taxable investment earning the same returns.
Many state 529 plans offer state tax benefits in addition.
Saunders Learning Group, Newton, KS
Nine Reasons Families Might Not Want to Save For College
1. Retirement Planning Should Come First 2. Education Doesn’t Have to Cost That Much 3. Students Should Invest in Their Own Education 4. You May Find It Easier to Pay for College When
the Time Comes 5. Hold Out for Graduate School as “the Carrot” 6. Look to Your Employer for Help 7. Get a Job First, Attend College Later 8. College Is Not the Only Route to Success 9. You can’t afford college (nearly 2/3s of parents can’t)
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Saunders Learning Group, Newton, KS
QUESTIONS?
Saunders Learning Group, Newton, KS
Summary of Book
Book summary: College Without Ramen Noodles; A Guide to Affording College. This highly readable guide provides college students and their parents with dozens of ways to make college a reality. In fact, use enough of these tips, and you may keep college debt at zero. Author Floyd Saunders has spent the last 20 years helping his five kids get post-secondary education using many of the options highlighted in this book. Mr. Saunders even tells you some good reasons why you might be better off with an alternative to a college degree. Regardless of your circumstances, this book offers valuable information as you consider going to college
College Without Ramen Noodles A simple plan to Affording College By Floyd Saunders Available for all eBook readers
ISBN: 13: 978-0-9824019-2-7
Saunders Learning Group, Newton, KS
Author Contact email: [email protected]
Blog: www/floydsaunders.com
Twitter @floydsaunders
Sideshare: http://www.slideshare.net/FloydSaunders
About the Author • Floyd Saunders is a writer with an extensive
background in the financial services industry, having worked across the industry in retail, commercial, investment banking, insurance, tax preparation and financial planning.
• He has taught personal financial courses for Baker University and has taught extensively for the American Institute of Banking. He has also taught at St. Mary’s College, Lake Tahoe Community College and Mt. Diablo College.
• He is the author of: Figuring Out Wall Street, College Without Ramen Noodles, Banking on Mutual Funds and Annuities, Introduction to Securities Markets, Investing in Securities and Family Financial Freedom.
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