The Other Guy, Author at The Free Financial Advisor

Careers for Giving People

May 1, 2014 by The Other Guy 2 Comments

A lot of people take time out of their schedules to help others, whether through volunteer work or by making more personal gestures to friends and family. Others don’t want to limit their giving natures to time outside of their careers. For those who want to make giving back a daily, in-career exercise, here are a few suggestions of where to get started and what kinds of opportunities are out there. Some are easy for lateral work transitions while others require specialized training, but all result in jobs that make improving the lives of others a central fixture.

1. Social Worker

Image via Flickr by kennisland

Social work is a wide and varied field that concentrates on giving support to those who need it most. This can come in the form of advocacy for the homeless to help them get off the streets, outreach to people struggling with substance addiction, supporting special needs children, or a number of other areas in the community. Social workers tend to require a Bachelor’s degree in social work, plus some volunteer experience. To get a feel for the reality of social work, consider volunteering at shelters or in police support programs.

2. Psychologist/Psychiatrist

If you want to go deeper into the field of social work and help those who struggle with more challenging issues, you may want to consider a career as a psychologist. Today, both a Master’s degree in social work and a PhD in psychology are considered terminal degrees to become an accredited counselor. If you want to enter a similar field that concentrates more on medicine, you can pursue a PhD in psychiatric medicine to become a psychiatrist, working with patients to treat their mental issues with medication and other methods.

3. Nurse Practitioner

Image via Flickr by comsalud
Doctors and medical specialists are valuable care providers, but they rely on dedicated nurses to make treatment consistent and holistic. Career nurses often go beyond the minimum requisite education to practice nursing, pursuing nurse practitioner certification to give them the skills and credentials they need to advance in their careers. Nurse Practitioners often lead teams of nurses in addition to performing their regular duties. Nurse practitioners are also qualified to diagnose many medical conditions and in some cases prescribe medication or otherwise manage the long-term care of specific patients.

4. Educator

Another highly varied field, education spans serving students of every age, background and level of need. Because of the technology that is used today, it is possible to attain teaching certification online. Anyone with a Bachelor’s degree can earn Accelerated Teacher Certification or a Master’s in Secondary Education through an online university, allowing him or her to move into a teaching career quickly. By enrolling in one of these online programs, prospective teachers will have the opportunity to learn on their own time, so that they do not have to quit their current jobs until they have completed their education and have started teaching. Online programs provide the flexibility that adult learners need, making it easier to become an educator.

The core of the education world is in certified primary or secondary school teachers who receive Master of Education degrees, there are many opportunities in related fields that don’t involve working in a school or directly with students. Tutors and adult educators tend to work for community or private organizations to meet the needs of a specific population, such as English Language Learners or children with learning disabilities. Educational administrators do not work directly with students, but their behind-the-scenes responsibilities put standard office responsibilities into the context of education.

5. Emergency Services

There are men and women who put their lives on the line and rush to save the lives of others every day. These emergency services professionals are functions of society, but they are also people who are at work. For those up to the challenge, a career in emergency services can be very stable and rewarding. Jobs in police and fire departments range from administrators to field officers and commanders, providing a career path that has a lot of growth and variety. You can also pursue work as a paramedic if you want to be a part of the emergency response side of medical care. Each of these fields requires certification through an appropriate academy or state-recognized organization and benefit from an education background in fields like criminal justice, medicine, chemistry or biology.

Helping others through your work takes dedication and a true desire to make the world a better place through your job. Each of the above fields can lead to long and rewarding careers that will give you the chance to wake up every day knowing you’re not just going to work, you’re also going to change the lives of others for the better.

5 Questions to Ask your Mortgage Broker Before Signing Anything

April 23, 2014 by The Other Guy 5 Comments

Taking on a home loan can be a daunting experience, and one of the biggest decisions you will ever have to make, so it is crucial to have all the facts at hand when deciding where to get your loan. Despite the solid reputations of the big banks, you should strongly consider mortgage products from the smaller banks, such as the BOQ Clear Path Home Loan, which can offer very competitive interests rates and often beat the big banks hands down.

Regardless of where you go to get your home loan, the following five simple questions will help you navigate and simplify the process, any mortgage broker worth their salt should be able to give you clear and concise answers.

Do you have references from previous customers?

Whether you are getting renovations done, hiring a new employee, or looking for a babysitter, the first thing you want to have are references from their previous customers. This is such a simple question that it is often overlooked, but getting a home loan is life-changing decision and it makes sense to talk to your brokers previous or current customers to get the low-down on how well they did their job. If this question is met with evasion or shrugged off, its time to find a different broker.

What is the best interest rate you can get me?

The most important factor in any home loan is the interest rate. Having a clear understanding of how the interest rates of various loans are structured enables you to compare loans like-for-like to find the one that suits you best. Some banks try to lure customers in with a special rate, only to have it revert to the standard variable rate after one year or less. Don’t be fooled by such offers, ask your mortgage broker to explain how your interest rate might fluctuate over the entire life of the loan and whether a fixed rate or variable rate loan is best for you.

What are all of the fees will I have to pay?

There are a plethora of fees associated with getting a home loan and you should be wary of fine print and vague language when going through the application process. Ask your broker to explain how all fees are calculated, from first applying for the loan to finally receiving the money, and then on, for the entire life of the loan. Many savvy banks are now offering fee-free applications for their home loans, for example, the Clear Path Home Loan from BOQ. Not having to pay an application fee can take the uncertainty out of applying for home loans, as if you are not successful, or change your mind, you have not committed any money and can move on to consider other options.

Are there any penalties for overpayment or early payment of my loan?

Paying off your loan early is the key to saving money and owning your home sooner. If interest rates drop, and you can afford to pay more, you don’t want to be penalised do you? Ask your broker to explain if any administration fees apply for paying more than your monthly repayment or if there is a penalty for repaying your entire loan early.

What documents do I need to provide and how long will the loan take to be processed?

Supplying the requisite documents is essential to making your application proceed smoothly and quickly. Ask your broker for a complete list of the documents you will need to provide, this will usually include proof of identification and employment, bank statements, proof of your liabilities and assets and depending on your situation, a credit history and tax records. Your broker should be able to give you a clear time-line for the processing of yourapplication once you have supplied all of the necessary documents.

Armed with these five simple questions, you should be quickly able to tell whether your broker is reliable, professional and able to provide you clear answers to help guide you through the application process.

The 14 Leadership Traits of the Marine Corps and How They Can Make You a Better Investor

February 11, 2014 by The Other Guy 8 Comments

Once upon a time, I stood on the parade deck a mere stone’s throw from the San Diego airport. My mom, grandma and grandpa, and best friend’s sister were in the stands, but I couldn’t find them.

Eyes. Straight. Ahead.

After all the pomp and circumstance, we heard the final phrase we had been waiting to hear for nearly 14 weeks, “Marines! Dismissed!” To which we replied, “Aye-Aye, Sir!” took one step back, about face and done.

I had earned the title Marine.

One of the things we learned in the Marine Corps were the 14 leadership traits – they were beat into our brains (sometimes quite literally)– so they’ve stuck with me for almost two decades. Undoubtedly, my time as a Marine shaped who I am today, and despite the fact that I’m not active any more, I still talk with Marine buddies, and quite often reflect on my time; the acronym JJ DID TIE BUCKLE ringing in my head.

Without further ado, here are the 14 leadership traits, as taught to me by Uncle Sam, complete with their definition, and how I think they can make you a better investor:

Judgment: The ability to weigh facts and possible courses of action in order to make sound decisions.
Justice: Giving reward and punishment according to the merits of the case in question. The ability to administer a system of rewards and punishments impartially and consistently
Dependability: The certainty of proper performance of duty.
Initiative: Taking action in the absence of orders.
Decisiveness: Ability to make decisions promptly and to announce them in a clear, forceful manner.

Tact: The ability to deal with others in a manner that will maintain good relations and avoid offense. More simply stated, tact is the ability to say and do the right thing at the right time.
Integrity: Uprightness of character and soundness of moral principles. The quality of truthfulness and honesty.
Enthusiasm: The display of sincere interest and exuberance in the performance of duty.
Bearing: Creating a favorable impression in carriage, appearance, and personal conduct at all times.
Unselfishness: Avoidance of providing for one’s own comfort and personal advancement at the expense of others.
Courage: Courage is a mental quality that recognizes fear of danger or criticism, but enables a Marine to proceed in the face of danger with calmness and firmness.
Knowledge: Understanding of a science or an art. The range of one’s information, including professional knowledge and understanding of your Marines.
Loyalty: The quality of faithfulness to country, Corps, unit, seniors, subordinates and peers.
Endurance: The mental and physical stamina measured by the ability to withstand pain, fatigue, stress, and hardship.

Which of these should you practice while managing your investments?

Knowledge is an easy one, but which others?

I think Judgment and Decisiveness are most important in my investing plan. It’s important to know what to do (knowledge), exercise sound thinking on when to do it (judgment), but most importantly, you need to act (decisiveness). I can see many other leadership traits that would help me (and others) become better investors. This is a useful list for your investment plans and for your day-to-day interactions with others.

A lack of decisiveness holds people back too often. When you have multiple options, and they all look good, it’s important to pick one and move. In the Marines it’s a matter of life or death. Luckily for us, in investing, it’s a matter of compounding interest!

While not life or death, missing out on a few days of interest, over long periods of time, has an increasingly damaging affect on your money. Missing $100 today could be a couple thousand dollars lost during your retirement years.

Other than the ones I listed above, do you see any leadership traits that if applied would help you be a better investor?

photos: Semper Fidelis – Marine Corps Archives & Special Collections; Marine Engineers Resting After Firefight – DVIDSHUB

How the Repo Guy Nearly Took My Car

January 21, 2014 by The Other Guy 12 Comments

When people ask, “What do you really know about the average guy? You manage money for rich people?” I always smile. I’ve had the privilege of working through my share of wonderfully challenging personal financial situations. And when I say “challenging” I mean the worst timing and situation imaginable.

Here’s one you’ll love and can learn from:

I’ve been a member of an entrepreneurial coaching group for a long time. Early in my career I was getting ready to head out of town. My job was to pick up two additional participants and get the heck on the road since we were getting some pretty crappy winter weather. As I was just finishing loading my bags in the car, my phone rang:

“Hello, is this TheOtherGuy?” (clearly someone who doesn’t know me. They even pronounced TheOtherGuy incorrectly!)

I answered with the affirmative.

“Hi, this is Rick with American Recovery…”

“Hey, Rick, whatcha trying to recover?” I said, half jokingly…and kinda wondering who this guy was.

“Uh, let’s see here…an Acura. We need to get that picked up today.”

What? That was my car!

AT this point I’m sure what’s happening: My wife listens to a radio program in the morning where they call people and get them all riled up and then surprise them with the fact that it’s all a big joke. I’ve listened a couple of times and have told my wife that there was NO WAY I would ever fall for that stuff.

Ever.

So, immediately, I thought it was a joke. So I sort-of played along.

Then Rick says, “So, ’cause you filed bankruptcy, Acura wants the car back.”

Now it’s getting serious…I’m pretty sure I would remember filing bankruptcy. I assured Rick I had not ever (and would not ever) file for bankruptcy, and that he must have the wrong number.

Then he said the magic words…

“Who’s Sally?”

Mutha f*$#er.

Sally is my mom.

And here’s why that matters. Several years earlier, when I’d bought my nicely used car (doing the right thing…Dave Ramsey would be proud), I decided that I was smarter than the people who figure out interest rates. I was a young, aggressive financial planner and knew a thing or two about leverage. So, I figured out that if my MOM co-signed the loan, it would save me another 0.5% per year in interest, thus making it worthwhile for me to take the financing (instead of paying cash for the used car) and invest the difference in some investment that would beat the interest rate.

In fact, I distinctly remember thinking how smart I was.

As Julia Roberts said in Pretty Woman, “Big mistake. Huge.”

I figured that I could clear this whole thing up by calling Acura. You see, it was true. I’d just found out that my mom HAD filed (long story there, but a good reason) and not me!

Without boring everyone with all the details – I have never been treated worse in my whole life. The people on the phone at Acura actually said “Well, if you weren’t such a deadbeat and wouldn’t have filed bankruptcy, this wouldn’t be going on.”

It really didn’t matter that I HADN’T filed for anything. They kept repeating what a loser I was.

White. Hot. Burning. Rage.

Finally, I ask for solutions – they offer two:

Pay off the balance of $10,680
Have car repo’d

Obviously, I’m choosing option 1, so I inquire: Can I just wire you the money?

Their answer: “No. It must be Western Union.”

For those of you who don’t know, I found out that day that sending money via Western Union is a giant pain in the ass. Trust me.

Oh, and did I mention the joys of going to the bank to take a withdrawal of $10,700? The IRS likes those forms they make you fill out…they’re called Currency Transaction Reports. And, I happen to know that 100% of CTR’s are reviewed by an IRS Criminal Agent. Lovely.

All because I was too smart to just pay cash.

So, I went on my trip – worried the whole time that the repo dude was going to take my car while I was 800 miles from home. When I returned, I had to drive 4 hours round trip (since we bank online) to get $10,700 withdrawn from my bank account, then I filed out a CTR which basically invites the IRS over for dinner, I enjoyed standing in line at Walmart for 45 minutes…with TEN THOUSAND DOLLARS IN MY POCKET to fill out this long-ass form to Western Union a payment to Acura.

All because I didn’t pay cash.

…and because I thought I was smarter and could make a couple extra bucks on my own. I guarantee that the time, energy and stress associated with this incident taught me a lesson – it’s not worth the time.

So, yes, I manage money for rich people…and average people. But many of the lessons I’ve learned are because I’ve also been there myself.

The lesson for today? Pay cash for your car and be done with it.

That’s my lesson: What’s a costly lesson you’ve learned?

Photo: David Berkowitz

Forgetting to Rebalance Makes You Wobbly

November 21, 2013 by The Other Guy 4 Comments

Quick question:

What does a good investor have in common with a good tightrope walker?

They both remember to rebalance!

HA!

I’m here all week folks. Don’t forget to tip your wait staff!

Forgetting to rebalance is just as dreadful for an investor as it is for a circus performer. Let’s talk about why.

First, let’s dispense with a definition. My definition of rebalancing is this:

Rebalancing is the act of periodically putting one’s portfolio back to one’s previously well thought-out asset allocation based on one’s unique risk tolerance, time frame, goals, and objectives.

Fun, huh? Disecting each part of that definition results in the following:

1 ) …act of… – this means that rebalancing is an action. You. Must. Do. It. (or at least cause it to be done through automatic programming). Rebalancing is something that must be done, by you.

2) …periodically…this doesn’t mean whenever you feel like it or whenever you remember. It means you need to select that time and mark it in your calendar. We prefer annually, but semi-annually is OK, too. Quarterly…eh…you’re probably wasting time. Any more frequently than quarterly and you’re doing market timing by a different name.

3) …putting…portfolio back… This next part is relatively easy. You’re putting it back – the way it was. No thought required here. Just like I tell my kids. Put your toys back the way they were. In the places they were before you played with them.

4) …previously well thought-out… During your rebalancing activities, you do not need to redesign your model. You’ve already done that. Previously. And it was well though-out.

5) …asset allocation based on unique… We could spend hours here, but here’s where you should’ve spent some serious thinking time around your risk and goals. Rebalancing is only rebalancing if it’s back to an asset allocation.

What can happen if one doesn’t rebalance?

That’s easy – anecdotally, consider the late 90s or late 2007. A big run up in one area of the market (say the Large Cap stocks of the 90s) could mean they’re overvalued. What happens when something’s overvalued? It eventually becomes undervalued! Rebalancing can help to sell winners at a gain and buy more shares of positions that are undervalued.

One of the “tricks” professionals have up their sleeves is rebalancing. It is a automatic process designed to take the thinking and emotion out of investing and allow investors to capture profits and reposition those dollars where they can buy the most shares of undervalued investments. Use rebalancing to your favor!

PS: The US stock market is up HUGE this year. Is it time you rebalanced???

Photo: quinn.anya

Following the Herd: Great in Nature, Not So in Finance

October 29, 2013 by The Other Guy Leave a Comment

Have you ever been to a fishery? I’m talking about the giant fish ladders where all the salmon are swimming/jumping and splashing? It seems like there’s a never ending stream (pardon the pun) of fish – and they’re all heading in the same direction.

Following the herd works well if you’re a fish – or nearly any animal in nature – because there are strength in numbers. But does it work well in investing?

Not so fast, my friends!

When any asset class soars, investors can’t help themselves and jump right in. Pick a category: large cap stocks in the early 90s, technology stocks in the late 90s, real estate in the mid-2000s, or more recently gold, to name the latest few…the higher prices climb, the more people want in.

That’s completely backward.

Legendary investor Warren Buffett has a beautiful quote on the subject: “Be greedy when others are fearful – and fearful when others are greedy.”

What he means is simply this: When the market is peaking and prices are increasing day in and day out, it’s best to stay on the sidelines. Don’t follow the herd.

In fact, the primary driver to investors’ investment performance has nothing to do with selection of great investments, but rather the behavior of investors. According to Morningstar, investors in U.S. stocks mutual funds earned 2.3 percentage points per year less than the funds themselves. Why is that? That’s simple: Investors tend to get all wishy-washy as asset classes either “soar” or “plunge” and then react based on emotion and/or what the “herd” is doing.

How do you avoid “Following the herd?”

Professionals call it an “investment policy statement,” but it’s more simple than the name sounds. Make yourself some ironclad rules that you promise never to break no matter the circumstances.

For example, you could set up a systematic investment plan that continues no matter what happens day-to-day in the market. You could promise yourself to keep only 30% of your assets in large company stock funds and never more than 10% of your portfolio in any single investment. These rules will help you manage your money wisely with the long view in mind.

More importantly, they’ll help prevent you from being part of the herd!

Insurance & The Paranormal: What’s Insurable?

October 13, 2013 by The Other Guy 5 Comments

Vampires bites, zombie attacks, and alien abductions – believe it, or not, all of these things and weirder have been insured before by the infamous specialty insurance market, Lloyd’s of London. In fact, Lloyd’s covers a vast array of paranormal oddities in 200 different countries – quite a few of which originated right here in the United States. You can get your own life insurance quote with the help of GIO and their online help system.

As of yet, I’ve yet to hear about any claims actually getting turned in as a result of a loved one getting bitten by a vampire, or attacked by a werewolf, but it’s always good to be prepared right?! Right!

This ideology is what Lloyd’s has made their millions on and the true believers will gladly cover their paranormal bases – and in some cases, their legs, taste buds, and their… buckteeth? Just keep reading!

Vampires, Werewolves, & Poltergeists… Oh My!

At the Royal Falcon Hotel in Lowestoft, England, there’s apparently all kinds of paranormal menace afoot! Why else would the hotel take out insurance covering both their staff and guests should bump-in-the-night horrors come knocking? We’re not talking a small – make some headlines and gain some publicity – coverage, either. One doesn’t purchase $1.5 million in coverage for just a bit of novelty fun!

What could possibly be going on over there? They seem to have everything covered accept alien abductions – not to worry, though, there’s plenty of individuals hitting up Lloyd’s for that!

Close Encounters of the Insured Kind

Lloyd’s proudly claims to have sold over 40,000 insurance policies to individuals who either claim to have been abducted by aliens, or feel as though they’ll be taken any day. It sounds a bit crazy, but if you think about it, it’s actually kind of thoughtful – these dear souls don’t want their families left financially stranded should they get sucked up into the sky via a beam of bright light.

It’s sweet, and oddly responsible. My question was: how exactly does one file a claim and actually prove that an abduction took place?

Well, apparently, Lloyd’s has quite the sophisticated screening and investigative process set in place before any claims will be paid. This includes a lie detector test and video documentation of the abduction and/or witnesses, who I’m sure are questioned and subjected to lie detector tests, as well.

Those Precious, Precious… Taste Buds?

I’m not sure why I put a question mark at the end of that – I consider my own taste buds very precious indeed, I’m just not sure I would go so far as to insure them! However, I’ve also never been world-famous food critic like Egon Ronay.

Back in the 1950’s, Ronay wrote the Egon Ray Guide to British Eateries and it’s still wildly popular even today – he was an authority on all things delicious and restaurants fell at his feet for a good review. With this being his entire livelihood, Ronay decided to insure his interests with Lloyd’s of London, taking out a $400,000 insurance policy on those little taste buds of his.

Honestly, I’m not even sure I know what could happen to your taste buds!

Million Dollar Legs… Literally!

In the 1940’s, Betty Grable’s legs were the envy of every woman in the world and the desire of every man; due to this, they were also a major source of revenue for 20^th Century Fox. In fact, Betty Grable brought in such a substantial amount for Fox, they went to Lloyd’s to have those legs insured for a million dollars EACH!

You Ain’t Nothing Without those Buckteeth!

Said no one, ever, right? Wrong! From 1967 to 1992, Ken Dodd reigned the stage as a British comedian known for his incredibly hilarious buckteeth! He also broke the Guinness Record for telling 1,500 jokes within three and a half hours, but… who cares! It’s all about those teeth!

When Ken sold his 100 millionth record, he started to realize that his teeth were integral to his success, so he sought out Lloyd’s to insure those bad boys for an insane $7.4 million dollars!

That’s a wild story, but I just can’t help but think that there was a pretty huge open window for insurance fraud! Luckily, old Ken wasn’t in it for the money… but the funny!

5 Steps Before Tying the Knot

October 1, 2013 by The Other Guy Leave a Comment

It’s your big day. Are you prepared financially?

We’ve all heard that statistics: many marriages end up in divorce. The #1 issue couples fight about is finance. Instead of ignoring these stats, why not meet them head on? There are clear steps you can take to ensure that your family will have a chance of succeeding where others fail.

Create a Debt Strategy

These days many people head into “wedded bliss” woefully unprepared for how to handle real life as a married couple. Quite often, one or both spouses have student loans or other debt that can be a drag on the beginning years of married life. Before tying the knot, sit down with your future spouse and walk through both of your credit reports. This will be a refreshing a “financial cleanse” right before the big day. Together, you can develop a plan to improve your scores (if necessary) before any large purchases. You can also put together a plan to eliminate debt as quickly as possible. You’ll have a much stronger chance as a couple if both people know the entire playing field before the wedding.

Set Up Your Budget

The budget discussion is one of the most challenging ones a couple can have. Depending on how long it’s been since college days, money can be tight during the early part of one’s career. You should both agree to the “family” financial meeting (Joe and I discuss this over and over and over again…) and make it a priority each week. Then, both of you are caught up on each bill, how you’re doing as a couple working toward your goals, and there are no surprises.

Plan For/Against Kids

Children are expensive. It’s that simple. You’ve probably already discussed your feelings with your future spouse about kids – how many, your favorite names, etc. – but it’s unlikely that you’ve had the chat about how much they cost. To put it in perspective, if a client came to me today and wanted to fully fund a 4-year public university degree for a newborn, they’d have to set aside around $400 per month from day one until the child’s 18^th birthday to be close. That’s a lot of money. Start now if possible – open a 529 plan in your own name, and then if you have children change the beneficiary to them.

Retirement Planning

Planning for the long-term seems so difficult at the beginning of any relationship, but it’s one that must be considered. Begin your married life by contributing as much as you can to your retirement plans – at least up to the company match, if offered – and plan to add a small increase each time your pay is increased. The road to millions of dollars starts at $100 a week into your 401(k) plan. Get started right away.

Commingling Finances

If you’ve been single for a long time, the thought of having someone else pouring over your bank statements questioning every transaction sounds like death by a thousand paper cuts. Simplify this by having the “his, hers, and ours” accounts and setting up through your budgeting process a small amount that each of you can spend – no questions asked – out of your own accounts. By using this approach, combined with budgeting together, your financial lives will be blissfully combined, yet separate as well.

Marriage is a big decision and a life changing one at that. By spending a few hours before you’re married discussing the financial impacts, you can spend more time enjoying your spouse and less time wondering if their credit score is going to make it impossible to buy a new house.

Photo: epSos.de

Starting a Small Business in College? 4 Ways to Finance It

September 23, 2013 by The Other Guy 2 Comments

Most modern college students don’t think about careers until after they graduate, despite the fact that many successful businesses started in college dorms. Companies such as Google, Facebook and even Time Magazine are all businesses built by students still in college, and more are on the way. For example, GoCrossCampus is a multiplayer online game developed by students at Yale, and was one of the first “social gaming” apps. Inc.com claims notes that GoCrossCampus is played by more than 40,000 students around the world. While starting a business in college can be a fantastic start to a lifelong career, where can a college student find funding for what might be the next FedEx or Reddit?

Small Businesses Administration

The SBA, or Small Business Administration, can help startups and entrepreneurs by providing finacial aid. The SBA offers low, fixed-rate loans that can be used to fund a wide selection of businesses and are very flexible. Borrowers must apply for loans through lending bodies that are insured by the Small Business Administration, and these loans can be used to purchase stock, real estate or necessary equipment to run a small business. For starting and expanding businesses, the is an excellent source of information regarding both Basic 7(a) Loans and Microloans. While both 7(a) and Microloans are well-suited for a small college business, student entrepreneurs should avoid CDC 504 Loans, which are primarily used to finance large purchases for businesses, such as real estate and construction.

Commercial Lenders

Financing for small businesses is available through many commercial financial institutions. Small businesses and entrepreneurs can apply with either local lenders or national lenders. Commercial lenders calculate interest rates on loans based on credit score of borrowers. Zillow reports that a credit score of 850 is the best you can have, whereas a credit score of 619 or lower is considered very poor. Students seeking a commercial loan should create a business plan to present to the lender, outlining details of the business’ success and addressing questions of profit margins. By being organized, one can address the questions lenders have about the likelihood of a return on their loan.

Self-Financing

For a struggling college student, self-financing might not seem like an option, but there are many reasons to consider it. If you are employed, saving a percentage of your earning specifically to invest in your business shows you have faith in your business, which can bring hesitant lenders to your side. For college students who are the recipient of annuities or settlements, a reliable way to generate vast capital quickly is to sell off annuities for a lump sum. Settlement purchaser http://www.annuity.org reports that one of the biggest advantages to selling deferred annuities for immediate annuities is that the risk is transferred to an insurance company. Students often have more immediate resources available to them than they are aware of. By investing these resources in the early stages of a businesses development, you will find it easier to find capital from lenders and investors later.

Government Grants

Many governments, including the U.S. government, offer startups and small businesses government-funded grants in lieu of loans. Each grant has unique requirements, and as grants are funded by taxes, most requirements are quite stringent. The largest advantage to filing for grants is that they do not have to be re-paid, though many grants require that the grant recipient invest an amount of capital equal to the grant received. The website Grants.gov includes lists of grants available, as well as a grant tracking form that allows you to apply for grants and manage grant application statuses. For those looking to change the world with their college startup, grants are an extremely viable option.

4 Tips to Pay Down Student Loan Debt

August 21, 2013 by The Other Guy 1 Comment

I can’t think of a better way to start of one’s adult life than to do so with over $35,000 worth of debt, can you? Doesn’t the idea of starting your career already knee-deep in the hole sound wonderful? In the words of Lloyd Christmas from Dumb and Dumber, “mmm..that sounds good. I’ll have that.”

Or I won’t.

The average college graduate now leaves college with over $35,000 worth of student loan debt — many have said that the student loan bubble, which now tops $1 trillion (yes, that is trillion with a “T”) is the next major “crisis” in America. I submit that it’s not the next major crisis. It’s already here. In June, Congress couldn’t figure out what to do about student loans, so in their infinite collective wisdom, they decided to let interest rates double from 3.4% to 6.8%. Thanks. We all appreciate that.

If you’re one of the umpteen thousands of people paying off oodles of student loan debt – how do you take care of it?

OG’s Student Loan Debt Tips

Step 1:

Be realistic with how much you owe. Get an accurate count of a) who you owe; b) how much and c) the interest rates. Many people have government and private loans spread hither and yon. Before you create a repayment plan, you have to be honest about how much you have.

Step 2:

Build your personal financial plan. This includes student loans, but also should include building a cash reserve, family planning, retirement planning, and other financial goals. Having a singular mindset of “I’m paying off my student loans before I do anything else… could lead to burn out and could impact how fast you reach your true goals. Plus, depending on your career choice, you may be eligible for deferment or outright forgiveness.

Step 3:

Create a debt payment plan. You have two options when it comes to paying off student loan debt: pay based on your income, or pay based on your indebtedness. Visit www.studentloans.gov and compare payments to determine what’s best for you and your personal financial situation.

Step 4:

Work your plan and throw off discouragement. Follow through with your well thought out plan. You did steps 1 through 3, now just execute. It will become tiresome and you will feel at times like you’ll never get it done – but you will. Track your progress monthly and watch the balances fall.

Student loan debt can seem insurmountable, but with the right well-thought out plan based on your personal financial goals, you can pay those off quickly and efficiently and move on to your other financial goals!