Principles of Saving for Retirement

Occasionally, some deep thinkers come along with advice so excellent and points of reference so basic that I feel compelled to pass them on.

Naturally, I wouldn't pass them on if I didn't also agree with them. I think they form a solid basis for your progress on getting that house next to the 16th green for your retirement (if that's what you want).

Miles to Go

The first set of principles come from my old pal and colleague, financial planning whiz Raymond J. Lucia (or Ray Lucia, as I call him). He's written a fine new book called "Ready...Set...Retire!: Financial Strategies for the Rest of Your Life" in which he lays out the six most fundamental considerations for retiring.

Before he even gets to those, though, he insists that you consider how long you're likely to live. Of course, none of us knows the date we'll die, but you can assume that if you make it to 65, you have a darned good shot of making it to 83. And if you're a couple who makes it to 65, there's close to a 40 percent chance you'll make it to 90.

The web site for Northwestern Mutual, a large life insurance company, can help you estimate your longevity. But the main point to bear in mind is that you're probably going to live about 20 years after you retire. That's a long, long time if you don't have enough money saved up.

The Six Principles

With that in mind, Ray presents the bedrock principles that will influence how you live financially after you retire. Specifically, they are:

1. How much you save.

Simply put, if you're a typical American (who happens to save close to zero right now), you have to save more. When you're young, 10 percent of your income will get you there. If you don't start saving until middle age, aim closer to 15 or 20 percent. If you don't start until later than middle age, save every penny you can even if your only in college.

2. How long you give your savings to compound.

The great Milton Friedman famously said that the greatest invention of man was compound interest. Maybe he was joking, maybe not.

In any event, compound interest is a great gift to young people. If you start early, tiny amounts grow to immense amounts, and pretty soon you're all set for retirement. My pal, the genius investment advisor Phil DeMuth, says that if you're old enough to start thinking about sex, you're old enough to start saving for retirement.

A thousand dollars socked away when you're 20 and growing at 10 percent per year will be almost $73,000 when you're 65. The same sum saved when you're 50 will grow to $4,200 at age 65. That's a stunning truth that should compel any young person to start saving early -- and the rest of us to start right now.

As for timing your retirement, Ray advises that if you can push it back by even five years you'll allow your money to grow and have fewer years to need it.

3. How you allocate your assets.

Typically, for those who start early, stocks are the answer. Over long periods, a diversified basket of common stocks wildly outperforms bonds, cash, and real estate. The differences are breathtaking.

But, as we've seen lately, there's also a lot of volatility in stocks. As you age, you'll want more of your money in bonds and money market accounts. These have lower returns than stocks, but they also have far lower volatility.

common stock index such as the Vanguard Total Stock Market Index (VTSMX and half in the Vanguard Total Bond Market Index (VBMFX).

To me, that's a bit conservative if you're young like in college. I would have more in stocks and also a good chunk in international markets. (Phil has written a fine book about supercharging your portfolio that will be out in a few months. It's far beyond his basic portfolio in sophistication and returns, so watch for it.)

Ray has a portfolio that he uses in his "Buckets of Money" strategy that uses stocks, bonds, variable annuities bought with a sharp eye on fees, and real estate, and his returns have been excellent.

4. How much your investment returns annually.

Now, this is largely unknown from year to year. But over long periods, stocks return close to 6.5 percent after inflation, and about 10 percent before inflation.

The supernova-genius of investing, the investor's absolutely best pal ever, John Bogle, who founded index investing through Vanguard Funds, says -- and his evidence is powerful indeed -- that you'll do best as a stock investor with index funds that cover the largest possible universe of stocks in the free world. These tend to be very low-cost in terms of fees and loads (sales charges), and beat almost all actively managed funds in terms of return over long periods.

I heartily concur. I would add that it's also helpful to juice up your portfolio with real estate, and to lean toward high-dividend and real estate funds.

5. How low you keep your fees and costs.

This principle is largely about using index funds and no-load mutual funds, which makes perfect sense.

6. How closely you keep an eye on taxes.

Finally, Ray advises maxing out your tax-protected accounts like IRAs and 401(k)s; keeping high-dividend stocks in accounts that are tax-deferred; and, when retiring, carefully considering what bracket you'll be in and drawing out your funds to remain in the lowest possible one.

Remember the Basics

These are basic principles to be sure, but they're vital. The three most important to remember are: 1) Start saving for retirement when you're young like in college; 2) Save as much as you can; and 3) Maximize your returns by using index funds with low costs and high diversification. (Diversification and time are probably the investor's best friends.)

It may sound simple, but it isn't easy. If you're diligent, though, you'll be well on your way to that house on the fairway.

Have a great day and God bless!

Insider's Look at Online Learning

Susan Aaron, The Learning Coach

Ever wonder what e-learning is really like? Do you have what it takes to be a successful online learner? Cheryl Shutt and Geoff Maffett, who have both taken master's-level classes at the University of Illinois Online, and Ben Smith, a business student at the University of Phoenix, share their experience and offer their advice for learning virtually.

The Realities of Virtual Learning

It's Hard Work. There's a false perception that online classes are easier than traditional ones. Smith, Shutt and Maffett all noted the heavy workload involved and the amount of reading required. In addition to homework, the class must be read. One shouldn't expect to get by with sitting quietly or to be drawn out, either. All three students mentioned the need for self-starting behavior.

It's Fast-Paced. The speed of online courses surprised all three.

Smith: "My first impression was, 'Wow, this course really moves.' I remember writing two and three papers a week in certain classes."

Maffett: "[Online learning gives you the] ability to work faster than the pace that is set in most classrooms, [which] seems to be designed for the slowest participant!"

It's a People-Oriented Atmosphere. Rich interactions with your college classmates are an element of the online classroom that overturns the common perception that this type of learning is an isolated endeavor.

Shutt: "Communicating by email with classmates and instructors was wonderful and let us receive individual attention."

It Really Is Convenient. All three mentioned the convenience and flexibility of online education as a key reason to try this approach.

Shutt: "Online classes allow you to take classes regardless of the hours you work or where you live."

Maffett: "I was able to complete my master's degree without having to attend classes. This was vitally important since I was transferred from Illinois to North Carolina in the middle of my graduate studies…I was also able to do my coursework while I was traveling for business."

It Can Be Technologically Challenging. Most difficulties with online learning were related to technology. Shutt mentioned that it takes some time to learn how to get around in an online classroom, suggesting students devote time before a course starts to getting acquainted with the environment. She also had problems with the real time chat due to slow typing skills.

They also mentioned that extra communication might be necessary when working online to overcome the lack of visual cues present in a conventional classroom.

Maffett: "When online teams worked on a common project, it was difficult to fairly distribute the workload and manage the revisions…We had to develop some clear rules for who worked on what when."

Strategies and Advice for New Online Students

If you're thinking about taking courses online, be sure to review Smith, Shutt and Maffett's tips for managing your online education:

• Set up a schedule for yourself, and try to stick to it.
• Get all the books ahead of time if possible.
• Keep up with assignments to avoid being overwhelmed later.
• Read through all the message postings from faculty and students each day.
• Use email regularly to contact your fellow classmates.
• Don't hesitate to email your instructor if you need help.
• Don't be a wallflower.
• Realize you have less opportunity to interact with peers and professors in real time.
• Team projects may take more time than you would expect -- be prepared for this.
• Try to attend any optional on-campus classes, if offered.

Are You a Good Online Learner?

Here's a quiz adapted from the attributes Smith, Shutt and Maffett say will help make someone well-suited to virtual learning.

• Do you have good time management skills?o Can you set up and follow a schedule?
• Are you self-motivated?o Can you set your own pace while learning?
• Can you work from different locations?o Are you comfortable with the Internet and PC technologies?
• Are you ready to put in extra reading time?

Did you answer "yes" to most of these questions? If so, you may be a good candidate for online education.

Have a great day and God bless!

All About Career Schools

Susan Aaron, The Learning Coach

Ever wonder about those schools that advertise on daytime TV? Can you compare traditional American colleges to schools that say they will prepare you for a career in just a few months? As it turns out, you can. Francis Giglio, director of Enhancement for the Accrediting Council for Independent Colleges and Schools (ACICS), the accrediting body for many of these schools, offers some insights into the nature of these institutions.

The Career School Niche

Career institutions are similar to traditional colleges and community colleges in some ways, yet have a niche all their own. The ACICS works with "independent, nonpublic career schools, colleges and organizations." That means none of these institutions are overseen by a state's board of governors or enjoy state tax funding. According to Giglio, "the majority of these schools are for-profit. Some are publicly traded, some are privately held, and a few of them are nonprofit."

The key qualifier for a career school is its mission -- preparing students for specific careers. The education offered is very practical. Most of the majors offered are skill-focused, such as accounting, information technology and drafting. Success is defined by placement of students in jobs after graduation, and the track record those students establish in their jobs. Like community colleges, career institutions are bly linked to local interests. Part of the criteria for ACICS accreditation is that schools work with local businesses to create their curriculum, notes Giglio.

Many programs at career institutions are two-year or associate's degrees. There are also bachelor's and even master's degrees available. Among ACICS accredited institutions, Giglio says career schools follow the "same credit requirements and requirements of faculty members" as an academic college or university.

Look for Accreditation

Career schools are accredited just like nonprofit colleges and universities, and the ACICS is approved by the US Department of Education (DOE). According to Giglio, "There's a tremendous amount of federal funding (for education) and accreditation is a way the Department of Education can have oversight of educational quality."

Schools not accredited by a DOE-approved agency may have a license to operate, but their students may not benefit from Federal financial aid money.

Other reasons for accreditation include:

• Fulfilling company requirements for educational reimbursement.
• Transferring credits from other institutions.
• Helping employers rate the value of an applicant's or employee's education.
• Qualifying graduates for licensing/certification exams.

Why Choose a Career School?

• Career-Oriented Mission: If the education you need is to prepare you for a career, these schools may be the right place for you.
• Focused Education: Career institutions provide a very practical education. Working closely with businesses to fulfill local needs, these institutions can help you find a job in your immediate geographic area.
• School and business networking opportunities: Career institutions often provide an intimate atmosphere. "I think the things that attract students are smaller classrooms, real-life training and more accessibility to people," says Giglio. "Most of these institutions are housed in one building. You are in contact with the people who run the school every day."

Finding a Career School

Career schools are growing. Giglio notes that in 1996, there were 280,000 students in ACICS-accredited schools, and in 2000, there were 365,000. To learn more, follow these steps to research schools and their reputations:

• Start by locating the institutions in your area that provide an education in your field of interest.
• Check to see if these schools are accredited, and if the accreditation information is up to date.
• Visit the school and ask questions. Inquire about business contacts in the community and past graduates' placement rates. Ask for contact information for past graduates and ask them about their experiences.
• Use the ACICS Web site to search for ACICS accredited schools by area or interest.

Have a great day and God bless!

Advance Your Career with an Advanced Degree?

John Rossheim

It seems like all the pieces are in place for the next giant leap in your career: Your friend told you his sister went back to school for a professional degree and, a week after graduating, landed a job with a $10,000 salary increase. So you know a degree would boost your pay. You know from your college experience five years or three decades ago that you're comfortable living on a student's diet of rice and beans. You've got a couple of blank grad school applications on your dining room table, so why not fill them out and take the plunge?

Before you quit your job or your job search to pursue an MBA or other advanced degree, you owe it to yourself to think more deeply about this major fork in the road of work and life. Here are some major checkpoints for your go/no-go decision on graduate school.

Why Do You Want to Go Back to School?

Begin your deliberations with the basics. "One of the most important factors is, where is this going to get you?" says Jane Finkle, a Philadelphia career counselor. Finkle recommends that you thoroughly research the employment opportunities for graduates of the program you're considering.

Are you looking for advancement in your current field, or do you want to change careers? Either can be a good reason to get a graduate degree if you've thought things through.

Erin Doland is clear that career change is her prime motivator. "The more I sat behind a desk all day, the more I realized changing employers wasn't going to make me happy," says Doland, who quit her job as communications director for a nonprofit to pursue a master's degree in education at Johns Hopkins University.

Whatever you do, don't let outdated preconceptions prevent you from considering grad school. "People may get to a lull in their careers and think, 'I'm too old to make a career change,' but they're not," says Peter Syverson, vice president for research at the Council of Graduate Schools in Washington, DC.

What Will a Graduate or Professional Degree Do for You?

A cautionary tale: A high tech worker who asked not to be named was laid off from her job at a Burlington, Massachusetts, maker of medical devices. When she was studying for an MBA in healthcare administration at Canyon College, an online school based in Caldwell, Idaho, she was asked what job titles the new degree would qualify her for. Her response? "I'm not completely sure. As I read the paper, I see titles that are all new to me: billing manager, client and third-party resource delegate..."

Unlike this MBA student, be sure of the jobs your graduate degree will qualify you for, and how many graduates of the programs you're considering actually land those jobs. Also find out about those graduates' salary levels.

Ask admissions representatives for survey results from the program's recent graduates. Sit in on classes, and pick the brains of students enrolled in the program. Don't just listen to the marketing pitch of a student handpicked by the admissions office to sell you on the program, Finkle advises.

Your ultimate reality check: Ask potential future employers how they would value a particular degree from the programs you're looking into. Is the degree a requirement or preference for your target positions, or is it irrelevant?

How Will You Pay the Tuition -- and Live Without the Salary?

Suppose you've established all the right reasons for getting a graduate degree. Now the question is, can you afford -- or avoid -- the common triple whammy of lost income, tuition fees and then student loan payments?

Doland, who earned her bachelor's degree in 1998, says "it makes sense" for her and her husband to live like college students for two years. Since she hasn't been out of college that long, downshifting her lifestyle is easier for her than it might be for a mid-career worker accustomed to a second home and eating out five nights a week.

If you can't stomach the comedown, see if you can get a head start on your graduate coursework by keeping your job, taking classes part-time and getting your employer to pay the tuition.

Have a great day and God bless!

Is College Really Worth It?

James C. Gonyea

Considering the high cost of a college education and the drain that expense can have on college studnets financial resources and future, I am often asked by college-bound students, "Is college really worth it?"

Here are 10 reasons you should pursue a college education:

1. Analytical thinking skills: Today's world is complex, and it requires making daily decisions about personal, economic, health, political, professional and social matters. Learning how to approach a decision, gather relevant facts, analyze comparative and contradictory data and draw correct conclusions are necessary skills for successful living. There is no better training ground to develop these skills than college.


2. Career beginnings: Significant knowledge is required to understand the nature of most occupations. College is usually the most effective way to acquire this knowledge. For many professions, a college education is a prerequisite for entering the field.


3. Career advancement: Many employers base promotion decisions on an employee's educational attainments. Whether or not a college education is truly required to handle the job is irrelevant. Employers need ways to rank employees, and a college education is an easily identifiable standard.


4. Financial gain: While there are notable exceptions, individuals with four-year college degrees earn more over their careers than people with less education do. The difference in lifetime earnings between a college graduate and a non-college graduate can amount to several million dollars.


5. Economic preparation: We all participate in a complex and continually changing economic environment, which requires some understanding of our economy. Where better to learn about managing your life's finances than in Economics 101?


6. Friends and spouses: Colleges, even non-residential institutions, bring disparate people together in one place. When individuals find themselves sharing similar experiences it's not surprising that lifelong friendships -- and life partnerships -- can develop. Networking within a profession often begins here too.


7. Life awareness: The next time you're in a group of people, step back and watch how they interact with each other. Humans are social animals -- we bond with each other through conversation and other activities. College serves an important role in preparing individuals for continuing social interaction.


8. Lifelong source of advice and information: Graduation from college doesn't mean you won't be back. Just the opposite. Today, colleges and universities are eager to keep in touch with alumni, some offering programs and services on both personal and professional issues.


9. Purpose in life: At some point, most of us wonder about our purpose in life -- why are we here and what should we be doing? An essential part of finding your way is understanding other possible paths. Colleges, by their nature, bring together people with different lifestyles, ideas and experiences. Beyond the opportunities for awareness offered by the classroom and social interaction, colleges also offer independent study and internship programs that can let you explore alternative paths to find the one best suited for you.


10. Self-actualization: Psychologist Abraham Maslow theorized that we humans have a need to be somebody, to feel important, useful and of value to others and society. This self-actualizing behavior can mean developing and applying knowledge over time to build expertise in a given subject. Becoming expert in one's chosen career field is one of life's greatest feelings of accomplishment. As we age and begin to satisfy the more basic needs in our lives, this need for self-actualization becomes more important. Lifelong learning is a key element in developing a sense of accomplishment, and a college education is the foundation for lifelong learning.

After 30-plus years of offering advice as a professional career counselor, I think my understanding of life is much better than it was when I was younger. I believe the old adage that with age comes wisdom, and on reflection I find that my college education -- BS in education and MS in guidance and counseling -- is worth more than I ever imagined.

Have a great day and God bless!

College Student Study Tips

Studying can be one of the most painful things to go through at college but if you learn some good methods and tips and can become your strong point in school.

Study Frequently and in Short Sessions

Test show that short periods of maximum concentration repeatedly is more benefical than studying for long periods at one time. 10 minutes of complete concentration is all you need and then you can take a break and come back to it again. Why does this work?

Our brains need to recover and reboot as the rest periods is when our brain assimilates our effort. These are very powerful tools that many teachers and college professors do not acknowledge to their students. Studying for hours on top of hours only put your brain in fatigue, stress, and distraction. Your learn will be minimum.

Take Guilt-Free Days of Rest

Resting your brain is very important as school and college can become stressful to even the elite college students that college is easy for them. Being able to take a day off without stress and worry will give your brain the needed time and energy to absorb new data. Really enjoy yourself on your days off and do something active that will exercise your body instead of your brain.

Know Your Emotional State

The best time to study is when you are relaxed and not tired, distracted, and in a hurry. Our brains are like a sponge when relax and easily absorbs information without effort. When you are emotionally stressed than our brain repels information you are studying leaving you with nothing for your hours of studying.

Same Day Review

Learning new things in class are fun but are often lost the next day. Don't let this happen to you and try to look over your notes from class the same day after a break and I promise you will begin to retain more information having studying time when exams or close to be at a minimum.

Set Study Routine

By having a schedule of studying for your classes will give you more time in doing the things you want like hanging out with friends. Getting more stuff during your study times will have your exam scores increasing and your relationships with others doing the same.

Don't waste time and get poor exam scores at college when you can be saving time and getting more done. The tips and methods are very easy and worth giving them a shot.

Have a great day and God bless!

Recieve More Financial Aid

Last year over $152 billion dollars were given away in grants from the government and other organizations for college students. So how to you get you share of the money?

1. Apply Now

Don't put this off until it is too late. Financial aid goes to those who ask for it first so if you wait you might miss your chance to get free money. The very first thing you should do is fill out the Free Application for Federal Student Aid (FAFSA). You might have to check with the college you are attending or are planning to attend for some needed information. The FAFSA is used by many college and private college in deciding the college students financial aid that he gets.

Many people believe they will not receive any financial aid but you should fill out the FAFSA anyway. It has been proven that eight million students missed out on receiving aid from the government and this even includes 1.5 million who have qualified for Pell Grants.

Filling out the FAFSA is the basics step for qualifying for many non-need based loans, such as Stafford Loans that have very low interest rates unlike private loans.

2. Check With Your State

Checking with your state can also be an option as they have tons of money going towards bettering there state. During 2004 to 2005 college students received $7.9 billion in financial aid from their state. These came in forms of grants and scholarships that were based on merit and financial need.

The first step is to fill out the FAFSA and then contact the appropriate state forms. Click here to find your state's programs.

3. Start Your Begging

Writing a paper on your financial situation might not help solve your money problem so let's try something else.Melissa Diana, a financial aid consultant who runs the Web site Tuition Physician, recommends writing a letter to the financial aid office detailing any situation, such as a future hospital stay, which will affect your budget in the following year. You need to tell the financial aid offices that future events will hinder your ability to afford college as they only know information form last year.

Even after you receive your financial aid letter you can appeal your case as more colleges will give money if they know you are accepted and are considering attending. This could be your way to get some more money for college if you are accepted into these programs.

4. Scholarship Search

The majority of financial aid is given out in grants and loans but scholarships can help you as well pay for your college tuition. There is more than $15 billion available for you in scholarships but you will never get it unless you apply for it. Start off at FastWeb.com as I believe they are one of the very best scholarship searchers online.

5. Best Loan Search

Loans make up about half of all financial aid but it is very important to be very careful on what loans to take out and who from as they can come out to be thousands more than the actual loan. Taking the time and searching out the very best loans with your college and yourself is the safest way to go when looking for student college loans.

Have a great day and God bless!

Fast Web #1 Scholarship Finder

FastWeb.com is like your own little college scholarship organizer for scholarships, colleges, jobs and internships with other resources at your figure tips. It has become my favorite website.

FastWeb for College Scholarships

I have been applying for about two months now on all kinds of scholarships and have already made $1,200 for college next year and I am thrilled.

It is so easy as well. After you finish the list of questions, FastWeb sends you hundreds of scholarships that apply to you and you actually have a good chance at winning. You have total access of these scholarships as well with your favorites, warnings on deadlines, and notifications of new scholarships.

Benefits of FastWeb

• Largest source of local, national and college-specific scholarships
• Personalized scholarship matching
• Search and compare colleges that are right for you
• Find colleges with scholarship money for you
• Tools and tips to help you pay for college
• Jobs and internships for students

FastWeb.com is by far the best college scholarship finder ever and I will be using it till I am out of college.

Have a great day and God bless!

College Scholarships Take TIme

When I first started applying for college scholarships, college grants, and some way to paying for my college education everything seemed to be a waste of time.

Spending hours after hours on research, applying for scholarships, and writing essay after essay hoping one will earn some money for my college tuition.

Most people just give up. But not you!

I kept with it and learned how to win and earn scholarships that made all that time worth $300 an hour. It's worth the time.

Scholarship sites like FastWeb, CollegeBoard, etc. can help find you the right scholarships for you to increase your winnings.

I will be posting information on scholarships, grants, loans, and everything a college student needs to know so stick around.

Have a great day and God bless!

Improving SAT Scores For College

Two improving SAT scores steps:

• Step 1: Set your goals
• Step 2: Develop a preparation strategy

Setting Goals

Good SAT SCORE?

SAT scores range from 200 to 800 points in each of the Verbal and Math areas of the SAT, or a overall score of up to 1600 points. Only 20 out of over 1,000,000 students each year get a perfect score on the SAT, so how do you figure out what a good score for you would be?

There are two good ways

1. Find out what the college you desire to attend requires. This can be in terms of a minimum SAT score or an average score for admitted Freshman. You can get this information by either calling the school's Admissions Office directly or by buying (or looking at) a book in your local book store or library. These books are usually found in the Reference section and distributed by a variety of publishers or can be found on the Internet using the links below:

2. Score at least as high on the SAT as the national average for your GPA in high school. Colleges and universities use SAT scores to compare students from different high schools across the country. They don't usually know how difficult or easy your high school is or the classes you took. So they use your SAT to compare or "validate" your GPA. Your SAT score should be roughly equivalent to your GPA (or better!).

Colleges are looking at SAT scores and high school GPA's more than ever so make sure you take that in consideration if you want to get into a really nice college.

Have a great day and God bless!

Free Federal Grant Money

Are you thinking about getting money for college, tuition, and some for fun college student spending. Start with one of the largest sources of "tree Money for Education & Business Help" the Federal government.

While the governments concern is economic develop, you have the chance to take advantage of their generosity of recieving free money for a business or for college. It is estimated that next year they will give out over $35 billion dollars in grants and low interest loans.

This government giveaway program as college students and business owners recieving around $80,000 dollars each for their future. And it's all free!

Why have you not heard about this yet? Simple!

The governments advertising in this area of grant programs to the public. For most people it just becomes a losing battle and a waste of time.

Even though you hear about budget cuts, grant money still increases very year that is available to you. The amount of money given to college student has actually gone up 30 percent and the amount of money going to small businesses went up 5 percent.

Can average people get grants from these government giveaway programs?

Absolutely!

Most people believe they have to be very rich or very poor to get college grants from a government grant program. It is not true!

To be continued...

Have a great day and God bless!