The Aim of Properties and Options
Properties and Options website is written by financial services professionals with almost 40 years of experience and expertise in two areas. First, Properties and Options was formed to help families understand the options on how to pay the least amount of money out of pocket for their children’s college education. Secondly, with vast experience in real estate, the site is designed to help investors in real estate and home buyers make informed decisions regarding their real estate purchases. This includes determining whether to buy a home or condo in the area where your student would attend college.
AREA OF EXPERTISE #1: COLLEGE FINANCIAL PLANNING
The first area of specialization is college planning. With an unparalleled passion to help families pay the least amount out of pocket possible for college, the writer has eight children of his own that have gotten through college with little or no debt and two currently in college. The writer clearly understands and sympathizes with those parents with high school students and the daunting task they face in navigating the world of college financial planning. Knowing how to pay for eight college educations in the most cost efficient manner was a must, especially in light of the ever increasing college costs.
Increasing College Expenses
Since 1980 the increase in college costs has been double the average inflation rate. Today, state or public universities cost on average between $20,000 and $25,000 per year (cost of attendance includes tuition, room and board, books, transportation, and other personal expenses such as computers and phones). The average student in today’s college environment take 5.8 years to graduate making the cost of a college education at a state run university between $120,000 to $150,000. Even with the increasing cost of getting a university degree it is still an important milestone for individuals because the average graduate will earn over their working career more than $1,000,000 more than a high school graduate. Private universities range from $45,000 to almost $70,000 per year.
Help in Paying the Least Amount for College
Properties and Options helps families determine the best plan on how to pay for college while at the same time having little or no impact on their life style or their retirement. Properties and Options identifies where and how families can qualify for the greatest amount of “need based” college aid as well as “merit based” aid. As an example, Properties and Options understands how to fill out the FAFSA (Federal Student aid form) and how to maximize the results for families seeking to minimize the expense.
Position Your Student for Aid
Properties and Options also seeks to help families position their students so that not only will they get admitted to their dream school but will also be able to command the greatest amount of merit based aid. Properties and Options will also attempt to help college bound students understand how they can graduate in 4 years instead of the average 5.8 years it currently is averaging. That alone can reduce the expense of a college education by 33%.
Understanding Award Letters
Properties and Options will also attempt to help families in analyzing award letters from the various universities as well as understand how to negotiate or appeal the awards in an attempt to increase the amount of free money families could receive. This part of the process is not a science but is more of an art form to achieve the greatest amount of aid possible.
The Struggle with Student Loans
Student loans are also a big issue when it comes to college funding. Award letters that include loans are considered “aid”. Properties and Options understands the various loans available to help fund a college education and how they work. Properties and Options will help families in analyzing the various options and how to minimize the expense and exposure to these loans. Currently most loans are federally funded and is extremely difficult if not almost impossible to get out from under the obligations created by entering into student loan agreements. Properties and Options attempts to help families understand the loans that will have the least impact on the ability for families to ultimately pay off these loans and the best way to use them as a funding mechanism.
College Financial Planning Summary
Running through the maze of college funding is difficult at best. Properties and Options understands and coaches families through the financial aspects as well as how to position students to pay the least amount out of pocket for the ever increasing expense of college. On top of that Properties and Options will assist families in picking the right school which can have a major impact on the amount of aid a student will receive and come out of the college education expense model relatively unscathed. It is imperative to understand and try to accomplish the following four items when planning for college:
- Get your student into the RIGHT school
- Prepare a plan to pay for college that will work
- Arrange your finances so that your life style is not affected
- Arrange your finances so that your retirement is not devastated
AREA OF EXPERTISE #2: REAL ESTATE
Properties and Options second area of expertise is understanding the best ways to finance real estate, including one’s primary residence. One of the premier series of articles on the site is helping people understand the fallacy of Dave Ramsey’s advice on how to buy real estate. Mr. Ramsey’s advice is to buy real estate on an all cash basis or finance a property for as short a period of time as possible. Dave Ramsey has advised the masses to save 100% of the price of a home by eating rice and beans for every meal in an attempt to save up enough money to pay cash. The Property and Options website points out the fallacy of this advice by showing the Dave Ramsey “Misery Index” for various areas around the country. The Misery Index shows how far behind someone would be if they attempted to save all the money to purchase the property with cash instead of buying the property now and financing it for the longest period possible. Properties and Options has used this backdrop to point out the best way to purchase real estate and how the numbers work in comparison to the Dave Ramsey all cash model.
Financing Real Estate
Financing a property is good debt (unlike credit card debt) for several reasons, especially in light of today’s low interest rate environment. If you can get a 4% rate which is tax deductible and your tax rate is 25% your net after tax expense or cost of money is 3%. It makes a great deal of sense to lock that rate in for as long as possible due to the time value of money. When you make the 360th payment on a 30 year mortgage you are paying with inflated dollars. The financing institutions understand this concept since they try to entice the consuming public with the notion that paying it off in 15 years versus 30 years is in your best interests. If the truth be known, it is actually in the best interests of the bank or financing institution so they can turn their money over again and again. Another reason for financing your property is when you have money tied up in equity in your home it is essentially doing nothing for you because the future value of your home has nothing to do with whether there is debt on it or not.
Importance Of Real Estate
Real estate is an important component of one’s net worth and wealth accumulation. Using this asset in strategic ways can have significant impact on your overall financial well being. Properties and Options will assist in understanding how important it is to use your real estate assets wisely as well as how the use of real estate impacts student financing and the costs of real estate in various locations around the country. Properties and Options will also point out the myths of Dave Ramsey’s real estate advice.
Properties and Options hopes you enjoy reading about your OPTIONS for real estate as well as for funding a college education as inexpensively as possible.