personal finance

[Raybyrnes]

When do financial Planners make sense?

I think they start to become cost effective when you have significant wealth. At that point they provide CPA’s for tax services, lawyers for estate planning and setting up trusts, business continuity planning, buy sell agreement, Charitable reminder trusts etc. So we can bag on FP for many things for moderate wealth but at a very high level they actually start to become extremely cost effective.

[an]

[quote=flu][quote=Raybyrnes]Nicole.
Remember , when the kids go to school they will have loans available to them.

JMTC[/quote]

Raybarnes,

The way things are going, this may very well not be the case… I was doing some research about this and discussing this with my friends who are in similar boats. From the looks of things, it appears more and more likely that for your kid to qualify for need-based financial aid…your home’s equity will start being used more significantly moving forward.

Hypothetically, if that is the case, if you were one of those people that worked hard to say pay down your mortgage and have amassed $500k in equity, but didn’t save for your kid’s college, you may very well be in situation in which your kid don’t qualify for a lot of the need-based financial aid, and be expected take out part of your equity for your kid’s education. That’s a big deal especially if you are dependent on a “job”, because at the time you are sending your kid off to college, you are most likely *not* in the peak of your incoming generating years and while you had looked forward to being less-debt ridden during your older year, and now need to take out equity to finance your kid’s college.

Based on what some folks that I’ve discussed this with, if you are able to afford a $500k+ mortgage right now, most folks advise me don’t count on your kid being able to get a meaningful amount of need-based financial aid unless you get totally financially wiped out. There’s also the risk if you spent your time paying down your mortgage and your home value gets slaughtered, your kid also will be SOL. Anyone have any thoughts about this?

I’m not advocating to not paying down a mortgage early, but there is so much uncertainty into how some of these rules will be, and so much uncertainty in how our economy will be, it just seems like the safest thing to do is to pay yourself/kid first and then pay your debts. Also, i believe IRA’s/retirement plans generally are not assets creditors can seek (could be wrong). (College saving plans, I’m not to sure about.)
While no one plans on getting wiped out, you never know.

I contribute approximately $300-400 month to my kid’s revocable education fund, and any 10% of any financial windfall/bonus each year. She is 3 right now. Key word here though: “revocable” fund (If kid turns out horrible/doesn’t go to college/etc, it gets yanked) 🙂 I max out my 401k/espp/etc, and pay myself a fixed amount each month into a self-directed investment each month…Then I pay my bills (kids bill/utilities/mortgage/etc). Anything else goes into discretionary spending for next month (entertainment/etc). There are some months with no discretionary spending :)[/quote]
I completely agree with you. That what we’re prepared for and that’s what we’re doing for our kid. That, and there’s no point paying off a mortgage at 4.5% interest.

[an]

[quote=flu][quote=Raybyrnes]Nicole.
Remember , when the kids go to school they will have loans available to them.

JMTC[/quote]

Raybarnes,

The way things are going, this may very well not be the case… I was doing some research about this and discussing this with my friends who are in similar boats. From the looks of things, it appears more and more likely that for your kid to qualify for need-based financial aid…your home’s equity will start being used more significantly moving forward.

Hypothetically, if that is the case, if you were one of those people that worked hard to say pay down your mortgage and have amassed $500k in equity, but didn’t save for your kid’s college, you may very well be in situation in which your kid don’t qualify for a lot of the need-based financial aid, and be expected take out part of your equity for your kid’s education. That’s a big deal especially if you are dependent on a “job”, because at the time you are sending your kid off to college, you are most likely *not* in the peak of your incoming generating years and while you had looked forward to being less-debt ridden during your older year, and now need to take out equity to finance your kid’s college.

Based on what some folks that I’ve discussed this with, if you are able to afford a $500k+ mortgage right now, most folks advise me don’t count on your kid being able to get a meaningful amount of need-based financial aid unless you get totally financially wiped out. There’s also the risk if you spent your time paying down your mortgage and your home value gets slaughtered, your kid also will be SOL. Anyone have any thoughts about this?

I’m not advocating to not paying down a mortgage early, but there is so much uncertainty into how some of these rules will be, and so much uncertainty in how our economy will be, it just seems like the safest thing to do is to pay yourself/kid first and then pay your debts. Also, i believe IRA’s/retirement plans generally are not assets creditors can seek (could be wrong). (College saving plans, I’m not to sure about.)
While no one plans on getting wiped out, you never know.

I contribute approximately $300-400 month to my kid’s revocable education fund, and any 10% of any financial windfall/bonus each year. She is 3 right now. Key word here though: “revocable” fund (If kid turns out horrible/doesn’t go to college/etc, it gets yanked) 🙂 I max out my 401k/espp/etc, and pay myself a fixed amount each month into a self-directed investment each month…Then I pay my bills (kids bill/utilities/mortgage/etc). Anything else goes into discretionary spending for next month (entertainment/etc). There are some months with no discretionary spending :)[/quote]
I completely agree with you. That what we’re prepared for and that’s what we’re doing for our kid. That, and there’s no point paying off a mortgage at 4.5% interest.

[an]

[quote=flu][quote=Raybyrnes]Nicole.
Remember , when the kids go to school they will have loans available to them.

JMTC[/quote]

Raybarnes,

The way things are going, this may very well not be the case… I was doing some research about this and discussing this with my friends who are in similar boats. From the looks of things, it appears more and more likely that for your kid to qualify for need-based financial aid…your home’s equity will start being used more significantly moving forward.

Hypothetically, if that is the case, if you were one of those people that worked hard to say pay down your mortgage and have amassed $500k in equity, but didn’t save for your kid’s college, you may very well be in situation in which your kid don’t qualify for a lot of the need-based financial aid, and be expected take out part of your equity for your kid’s education. That’s a big deal especially if you are dependent on a “job”, because at the time you are sending your kid off to college, you are most likely *not* in the peak of your incoming generating years and while you had looked forward to being less-debt ridden during your older year, and now need to take out equity to finance your kid’s college.

Based on what some folks that I’ve discussed this with, if you are able to afford a $500k+ mortgage right now, most folks advise me don’t count on your kid being able to get a meaningful amount of need-based financial aid unless you get totally financially wiped out. There’s also the risk if you spent your time paying down your mortgage and your home value gets slaughtered, your kid also will be SOL. Anyone have any thoughts about this?

I’m not advocating to not paying down a mortgage early, but there is so much uncertainty into how some of these rules will be, and so much uncertainty in how our economy will be, it just seems like the safest thing to do is to pay yourself/kid first and then pay your debts. Also, i believe IRA’s/retirement plans generally are not assets creditors can seek (could be wrong). (College saving plans, I’m not to sure about.)
While no one plans on getting wiped out, you never know.

I contribute approximately $300-400 month to my kid’s revocable education fund, and any 10% of any financial windfall/bonus each year. She is 3 right now. Key word here though: “revocable” fund (If kid turns out horrible/doesn’t go to college/etc, it gets yanked) 🙂 I max out my 401k/espp/etc, and pay myself a fixed amount each month into a self-directed investment each month…Then I pay my bills (kids bill/utilities/mortgage/etc). Anything else goes into discretionary spending for next month (entertainment/etc). There are some months with no discretionary spending :)[/quote]
I completely agree with you. That what we’re prepared for and that’s what we’re doing for our kid. That, and there’s no point paying off a mortgage at 4.5% interest.

[an]

[quote=flu][quote=Raybyrnes]Nicole.
Remember , when the kids go to school they will have loans available to them.

JMTC[/quote]

Raybarnes,

The way things are going, this may very well not be the case… I was doing some research about this and discussing this with my friends who are in similar boats. From the looks of things, it appears more and more likely that for your kid to qualify for need-based financial aid…your home’s equity will start being used more significantly moving forward.

Hypothetically, if that is the case, if you were one of those people that worked hard to say pay down your mortgage and have amassed $500k in equity, but didn’t save for your kid’s college, you may very well be in situation in which your kid don’t qualify for a lot of the need-based financial aid, and be expected take out part of your equity for your kid’s education. That’s a big deal especially if you are dependent on a “job”, because at the time you are sending your kid off to college, you are most likely *not* in the peak of your incoming generating years and while you had looked forward to being less-debt ridden during your older year, and now need to take out equity to finance your kid’s college.

Based on what some folks that I’ve discussed this with, if you are able to afford a $500k+ mortgage right now, most folks advise me don’t count on your kid being able to get a meaningful amount of need-based financial aid unless you get totally financially wiped out. There’s also the risk if you spent your time paying down your mortgage and your home value gets slaughtered, your kid also will be SOL. Anyone have any thoughts about this?

I’m not advocating to not paying down a mortgage early, but there is so much uncertainty into how some of these rules will be, and so much uncertainty in how our economy will be, it just seems like the safest thing to do is to pay yourself/kid first and then pay your debts. Also, i believe IRA’s/retirement plans generally are not assets creditors can seek (could be wrong). (College saving plans, I’m not to sure about.)
While no one plans on getting wiped out, you never know.

I contribute approximately $300-400 month to my kid’s revocable education fund, and any 10% of any financial windfall/bonus each year. She is 3 right now. Key word here though: “revocable” fund (If kid turns out horrible/doesn’t go to college/etc, it gets yanked) 🙂 I max out my 401k/espp/etc, and pay myself a fixed amount each month into a self-directed investment each month…Then I pay my bills (kids bill/utilities/mortgage/etc). Anything else goes into discretionary spending for next month (entertainment/etc). There are some months with no discretionary spending :)[/quote]
I completely agree with you. That what we’re prepared for and that’s what we’re doing for our kid. That, and there’s no point paying off a mortgage at 4.5% interest.

[an]

[quote=flu][quote=Raybyrnes]Nicole.
Remember , when the kids go to school they will have loans available to them.

JMTC[/quote]

Raybarnes,

The way things are going, this may very well not be the case… I was doing some research about this and discussing this with my friends who are in similar boats. From the looks of things, it appears more and more likely that for your kid to qualify for need-based financial aid…your home’s equity will start being used more significantly moving forward.

Hypothetically, if that is the case, if you were one of those people that worked hard to say pay down your mortgage and have amassed $500k in equity, but didn’t save for your kid’s college, you may very well be in situation in which your kid don’t qualify for a lot of the need-based financial aid, and be expected take out part of your equity for your kid’s education. That’s a big deal especially if you are dependent on a “job”, because at the time you are sending your kid off to college, you are most likely *not* in the peak of your incoming generating years and while you had looked forward to being less-debt ridden during your older year, and now need to take out equity to finance your kid’s college.

Based on what some folks that I’ve discussed this with, if you are able to afford a $500k+ mortgage right now, most folks advise me don’t count on your kid being able to get a meaningful amount of need-based financial aid unless you get totally financially wiped out. There’s also the risk if you spent your time paying down your mortgage and your home value gets slaughtered, your kid also will be SOL. Anyone have any thoughts about this?

I’m not advocating to not paying down a mortgage early, but there is so much uncertainty into how some of these rules will be, and so much uncertainty in how our economy will be, it just seems like the safest thing to do is to pay yourself/kid first and then pay your debts. Also, i believe IRA’s/retirement plans generally are not assets creditors can seek (could be wrong). (College saving plans, I’m not to sure about.)
While no one plans on getting wiped out, you never know.

I contribute approximately $300-400 month to my kid’s revocable education fund, and any 10% of any financial windfall/bonus each year. She is 3 right now. Key word here though: “revocable” fund (If kid turns out horrible/doesn’t go to college/etc, it gets yanked) 🙂 I max out my 401k/espp/etc, and pay myself a fixed amount each month into a self-directed investment each month…Then I pay my bills (kids bill/utilities/mortgage/etc). Anything else goes into discretionary spending for next month (entertainment/etc). There are some months with no discretionary spending :)[/quote]
I completely agree with you. That what we’re prepared for and that’s what we’re doing for our kid. That, and there’s no point paying off a mortgage at 4.5% interest.

[PatentGuy]

TG says:

“They can live in crampt, disgusting conditions, survive on macaroni and cheese, drink lucky lager, get a crappy job, shop at thrift stores …”

Hysterical. And exactly how I lived in the early 80s. When we had some cash, we would stir some real cheese into the Kraft mac ‘n cheese.

Anyone remember “Nude Beer”? (had the scratch off labels). I think that came out in 1983.

[PatentGuy]

TG says:

“They can live in crampt, disgusting conditions, survive on macaroni and cheese, drink lucky lager, get a crappy job, shop at thrift stores …”

Hysterical. And exactly how I lived in the early 80s. When we had some cash, we would stir some real cheese into the Kraft mac ‘n cheese.

Anyone remember “Nude Beer”? (had the scratch off labels). I think that came out in 1983.

[PatentGuy]

TG says:

“They can live in crampt, disgusting conditions, survive on macaroni and cheese, drink lucky lager, get a crappy job, shop at thrift stores …”

Hysterical. And exactly how I lived in the early 80s. When we had some cash, we would stir some real cheese into the Kraft mac ‘n cheese.

Anyone remember “Nude Beer”? (had the scratch off labels). I think that came out in 1983.

[PatentGuy]

TG says:

“They can live in crampt, disgusting conditions, survive on macaroni and cheese, drink lucky lager, get a crappy job, shop at thrift stores …”

Hysterical. And exactly how I lived in the early 80s. When we had some cash, we would stir some real cheese into the Kraft mac ‘n cheese.

Anyone remember “Nude Beer”? (had the scratch off labels). I think that came out in 1983.

[PatentGuy]

TG says:

“They can live in crampt, disgusting conditions, survive on macaroni and cheese, drink lucky lager, get a crappy job, shop at thrift stores …”

Hysterical. And exactly how I lived in the early 80s. When we had some cash, we would stir some real cheese into the Kraft mac ‘n cheese.

Anyone remember “Nude Beer”? (had the scratch off labels). I think that came out in 1983.

[Nicole]

TG-

Your post was great. You are right, I want to spend as much time with my son as possible and hope to have another child someday. I worked my tail off until just days before I delivered my son so that I could save some extra money and extend my maternity leave.

I completely agree that there is value in teaching your children what it is like to live without. My father’s approach to sending us to college was very similar to your experience, I even remember donating plasma every 2 weeks for a few months 🙂 My father raised us to believe we were poor which was hilarious because we lived in a fairly affluent community in the mid-west. I remember thinking, man, how do we live here even though we’re so poor??? It wasn’t until I was in my mid-20’s that I realized my father was just stashing away the money to pay the tuition for 5 kids (we’d pay our own living expenses and books- that was the deal).

So in response to some other posts, we’ll definitely be working on our discipline and try to redefine ourselves as savers instead of spender. We’ll look into refinancing when possible 6.25% on 650K is huge, I realize that.

I’ll completely ditch the idea of a FP and just come here for the wisdom of the piggs! Thanks for diversity of opinions and perspectives.

[Nicole]

TG-

Your post was great. You are right, I want to spend as much time with my son as possible and hope to have another child someday. I worked my tail off until just days before I delivered my son so that I could save some extra money and extend my maternity leave.

I completely agree that there is value in teaching your children what it is like to live without. My father’s approach to sending us to college was very similar to your experience, I even remember donating plasma every 2 weeks for a few months 🙂 My father raised us to believe we were poor which was hilarious because we lived in a fairly affluent community in the mid-west. I remember thinking, man, how do we live here even though we’re so poor??? It wasn’t until I was in my mid-20’s that I realized my father was just stashing away the money to pay the tuition for 5 kids (we’d pay our own living expenses and books- that was the deal).

So in response to some other posts, we’ll definitely be working on our discipline and try to redefine ourselves as savers instead of spender. We’ll look into refinancing when possible 6.25% on 650K is huge, I realize that.

I’ll completely ditch the idea of a FP and just come here for the wisdom of the piggs! Thanks for diversity of opinions and perspectives.

[Nicole]

TG-

Your post was great. You are right, I want to spend as much time with my son as possible and hope to have another child someday. I worked my tail off until just days before I delivered my son so that I could save some extra money and extend my maternity leave.

I completely agree that there is value in teaching your children what it is like to live without. My father’s approach to sending us to college was very similar to your experience, I even remember donating plasma every 2 weeks for a few months 🙂 My father raised us to believe we were poor which was hilarious because we lived in a fairly affluent community in the mid-west. I remember thinking, man, how do we live here even though we’re so poor??? It wasn’t until I was in my mid-20’s that I realized my father was just stashing away the money to pay the tuition for 5 kids (we’d pay our own living expenses and books- that was the deal).

So in response to some other posts, we’ll definitely be working on our discipline and try to redefine ourselves as savers instead of spender. We’ll look into refinancing when possible 6.25% on 650K is huge, I realize that.

I’ll completely ditch the idea of a FP and just come here for the wisdom of the piggs! Thanks for diversity of opinions and perspectives.

[Nicole]

TG-

Your post was great. You are right, I want to spend as much time with my son as possible and hope to have another child someday. I worked my tail off until just days before I delivered my son so that I could save some extra money and extend my maternity leave.

I completely agree that there is value in teaching your children what it is like to live without. My father’s approach to sending us to college was very similar to your experience, I even remember donating plasma every 2 weeks for a few months 🙂 My father raised us to believe we were poor which was hilarious because we lived in a fairly affluent community in the mid-west. I remember thinking, man, how do we live here even though we’re so poor??? It wasn’t until I was in my mid-20’s that I realized my father was just stashing away the money to pay the tuition for 5 kids (we’d pay our own living expenses and books- that was the deal).

So in response to some other posts, we’ll definitely be working on our discipline and try to redefine ourselves as savers instead of spender. We’ll look into refinancing when possible 6.25% on 650K is huge, I realize that.

I’ll completely ditch the idea of a FP and just come here for the wisdom of the piggs! Thanks for diversity of opinions and perspectives.

[Author]

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