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Understanding the True Cost of Mutual Fund Ownership

Let me ask you this: How much does it cost to own a mutual fund? I’ll give you hint: It’s safe to say probably more than you think… Did you answer “1% to 1.5%”? When discussing mutual fund expenses, too often professionals and laypeople alike resort to rules of thumb like “1% - 1.5%.”  This rule of thumb is seriously flawed, and it could actually be costing you a lot more money! There are four major costs of mutual fund…

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The Role of Financial Advisors on My College Planning Team

A client recently asked me if MCPT has any special requirements that determine the types of financial products that are offered to our clients and if our financial advisors are required to sign-off on a particular code of ethics. He also asked how I decide on which financial advisors to recommend to a client. These are all excellent questions. Financial Products/Financial Planning Let me begin by saying that I or others on my college funding strategies team do not recommend…

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There’s More To Be Scared About than Paying For College

There is no doubt that the ever-accelerating costs of paying for college are daunting for almost every family--the good news is that there are experts and professionals out there who can help you. A competent financial advisor who understands how the system works can work with you to uncover any number of potential strategies that may help reduce your out-of-pocket cost for college.  They can also create cash flow strategies, educate you on different types of loans, and even blend in tax…

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Single Moms Headed for Big Trouble in Retirement

Single moms with college bound kids are in a constant struggle to make ends meet.  If they happen to have any money at all left over at the end of the month, it has to go into their already too-meager college savings account. What about your retirement savings? The usual answer I get to this question is that retirement savings will have to wait until the kids have graduated from college.  But what about your 401K savings account? There is…

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5 Questions to Ask Your College Funding Adviser

According to Kalman Chany, author of Paying for College Without Going Broke, using an accountant to do your college financial plan can actually cost you thousands of dollars in potential financial aid.  Here are 5 questions to ask before you make a decision to retain anyone as your college funding adviser: 1. Should I increase my retirement contributions to lower my adjusted gross income during my child’s college years? If the accountant says yes to this question, you definitely have the wrong person…

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A Lesson in Paying for College — Part 1

Here’s a little-known fact about the cost of a college education: there are two prices, one for the informed and one for the uninformed. The uninformed “buyer of a college education” generally spends thousands of dollars more than the informed. And, while the uninformed is sending their child to the local community college or state university, the informed parent is often sending their student to a prestigious private college – and paying the same price! Helping you become a more-informed…

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Newest Kickback Scheme: Campus Debit Cards

Last week, while catching up on my research on private student loan sources, I encountered this attention-getting headline on Huffington Post: “Proposal Would Prevent Kickbacks that Steer Students Into Campus Debit Cards.”  According to the article. there are now about 900 campuses loading their students’ financial aid money into prepaid debit cards and peddling them to students. Sound convenient? Convenience, however, is coming at a big price for students. It turns out that banks and colleges are splitting millions of…

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Business Owners Have a Big Advantage When Paying For College

Small business owners have some unique advantages when it comes to lowering the cost of college, often by thousands of dollars a year. The big drivers in determining college costs are income and assets. Small Business Not Assessed Under FAFSA Rules Under FAFSA rules, assets (a business with under 100 employees) are not assessed when determining the Expected Family Contribution. (EFC). Considering that assets are assessed at 5.64%, it can be a big advantage for many small business owners to…

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Why Your Financial Advisor Must Be a Fiduciary

Many clients have asked me why My College Planning Team (MCPT) requires me to approve the financial plans provided to them by our other financial advisors. After all, these advisors have often had as much experience as I and have worked as trusted advisors to hundreds of clients throughout their careers. MCPT implemented this policy to make sure all of our college and financial plans have been reviewed by someone with fiduciary responsibility. This means that the person reviewing their…

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Tax Planning Tax Bill

The Base Years Change Everything!

As a tax accountant and financial planner for over 25 years, on many occasions, I have found that my usual tax and financial planning recommendations are significantly affected when I learn that my clients are approaching the base years for their college-bound children. (The base year is the calendar year immediately preceding the year in which their child will begin college.) Here are a few examples of the typical tax and financial questions I ask clients who do not have…

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