5 Ways to Get More College Financial Aid

5 Ways to Get More College Financial Aid

Going to college can be a very exciting and nerve wrecking time. Between the excitement from starting a new chapter and the thought of making new friends, it can become stressful very quickly. While there are some students whose parents can pay for college, not every student is that fortunate. When financial aid isn’t enough it’s easy to think that you’re all out of options but, there are ways to get more financial aid.

Reduction of Household Income:

If there is a decrease in your household income from the time the FAFSA is filled out to the time where additional assistance is needed, then there is a possibility that you can receive more financial aid. A decrease of income can come from anything from having a new job, to even losing employment or taking a pay cut. Most colleges want to see that there is a financial hardship and even though the FAFSA has many questions about household income, hard times are not easily seen on the applications.

Death of a Guardian or Parent:

This doesn’t mean that one of your parents have to die for you to get more financial aid. The death of a parent may not be included on the initial FAFSA for various reasons. Perhaps because it might not be a recent death some may not include it but adding this information can make the difference in receiving more aid. When filing an appeal it is key to note any negative to changes to really make your case.

Divorce or Separation:

While the question is posed on the FAFSA, some students may not be in the situation at the time that it’s filed. Mentioning this on a financial aid appeal can make a world of difference. Single-parent households usually receive more financial aid than a student who has both parents in the home.

Damage from a Natural Disaster:

Something that is essentially out of your control can earn you more aid. If there’s a hurricane or a snow storm and it damages your home or car this can increase your financial aid. When money has to go towards something else that is big, like home repairs, it will become more difficult to apply that to college tuition. This can lead to reduced funds and that’s really what colleges look for in an appeal.

Unexpected Medical Expenses:

Anything can happen at any time. Whether it’s an illness that’s spreading around or a major injury, this can also earn you more financial aid. Medical bills add up and can be quite expensive. This isn’t a common instance that sparks the thought of financial aid assistance so many may not even know of the opportunity to get that increase.

Any of these situations can cause immense stress and while communicating to financial aid it is definitely best to remain calm. Hostile phone calls and emails don’t benefit anyone, especially when you’re looking to get some extra help. It is always good to keep an appeal short and to the point while remaining polite throughout the process.

Edward Schinik is the CFO and COO of Yorkville Advisors.

5 Skills You Need to Be Financially Successful

5 Skills You Need to Be Financially Successful

Who doesn’t want to be financially successful? This article addresses the skills that make you financially successful!

1. Discipline:

Self-Discipline is the number one trait that brings success in not only the financial front but also many other aspects of life. However, when it comes to financial success, one needs to be very disciplined in order to control impulse spending and wasting money on unnecessary items.
The sudden urge to go on a shopping spree and to buy to make yourself feel better is a big NO. Maxing your credit card, a bigger NO. How do you not do any of these? By cultivating self-discipline. Save first, spend next. You can only do so when you have an uncompromising level of discipline.

2. Self Confidence:

If you don’t trust yourself, then who else will? A healthy dose of confidence upon oneself and one’s skills and capabilities play a significant role in determining a person’s financial mileage. Confident people make the right choices, right decisions and walk away with a profitable deal at the end of the day.
On the other hand, if you’re not confident about yourself and if you don’t curb your emotional instincts like unnecessary anxiety and panic in the cases of market ups and downs, your investments have near zero chances of yielding you a profit.

3. Organization:

It is nearly impossible to be financially independent, let alone successful if you are unsure about managing your finances. Have you paid your installments on time? Have you saved the 20% of your paycheck for your investment in a new business that you plan on opening next year?
Sit down and plan your expenses and savings. Stay organized, make payments on time. Pay the fees and bills on time to avoid late fines. Surround your planning and organization around this mantra— Save first, spend next. With proper planning and organization comes great wealth.

4. Critical Thinking:

You are your boss. You might hire a wealth planner, or you might subscribe to a brokerage firm that gives you the advice to bring you riches. Don’t rush, pause, wait, do an analysis of your own. Take every advice, especially a financial investment advice with a pinch of salt.
Do your thorough research, analysis and only then commit towards investing in any venture. Upon failing to critically think and evaluate where you put your money, you open gates to fraudsters and con-men.

5. Self-Awareness:

Being self-aware is being absolutely sure about what you are and what you are not. Being extremely rational, objective and clear about your strengths, weaknesses and risk appetite is one of the key factors to making it big.
Without understanding yourself, you can never make wise decisions and stand by your decisions in the case of failures or loss. With self-awareness, you also understand your spending patterns and can effectively identify where your money is sinking and what you must to do stop losing money. Awareness is something that is hugely person. No one knows you better than yourself.

Edward Schinik serves as both the Chief Operating Officer and the Chief Financial Officer of Yorkville Advisors.

3 Strategies for Managing a Mutual Fund Portfolio

3 Strategies for Managing a Mutual Fund Portfolio

Establishing a regular savings program is essential for securing a future retirement, but ensuring that money continues to grow is the real secret to accumulating wealth. Take a look at three common methods for managing a mutual fund.

Dollar Cost Averaging:

This is a good plan for those who are able to invest a set dollar amount on a regular, preferably monthly basis. If you invest in a mutual fund in this manner, clearly in certain months you are acquiring more shares of the fund than in other months. This may seem counter-intuitive to some as you are buying more when the price is down. However, this approach removes any emotion from the equation and relies on the belief that over a period of time, despite cyclical trends, the market will rise. Over time, the costs average out, but you have acquired more shares in the down market.

Index Funds:

An index fund is a type of mutual fund that is designed to track the performance of a specific index of the market. Obvious ones include index funds based on the S & P 500 or the Dow Jones Industrial Average but can include any groups of stocks with similar characteristics. Index funds typically have lower costs associated with them than other mutual funds because no ongoing research, analysis or projections are necessary and there is a strong tendency to maintain the same securities in the fund for a longer period of time, which reduces transaction fees.

Go with your Gut:

While this is most often the least successful investment strategy for mutual funds, it is probably the most common one for the individual investor. You may look at your portfolio and see what you don’t have and look to add something different. You may ask what friends have done with their money and try to replicate what has worked. Unfortunately, you will likely be chasing the past cycle and end up on the wrong side of the market. Even if you have some success with certain investments, this strategy almost always creates the least positive returns.

Any investing requires a fundamental assessment of your goals as an investor. Diversification is always a good rule of thumb, but you also need to pay specific attention to your age, when you will most likely need your money and, importantly, your personal risk tolerance.

Edward Schinik has been with the Investment Manager since 2009.

5 Common Financial Mistakes Guaranteed to Ruin Your Retirement

5 Common Financial Mistakes Guaranteed to Ruin Your Retirement

Preparing for retirement is not usually an exciting or fun topic and often the rewards are far enough off that it’s difficult to really engage. And, even worse, short-term benefits can lead to long-term difficulties that could be easily avoided with a little planning. It’s critical to have a good retirement plan and process for updating it and improving it as time goes on. Running out of money in old age is a terrible experience.

Unfortunately, in addition to that, there are some very easy mistakes that are often made that can make a huge negative impact on your retirement. Here are five:

Buying on Credit:

Credit is one of the wonders of the modern age. It allows for home and vehicle ownership by many more than could possibly manage if they had to pay in cash. It powers industries and businesses and is definitely a good thing. However, consumer credit can be a tricky beast. It’s tempting to buy just a little more than you need and put it on the card. It’s easy to buy a car that costs just a little more and pay it off over time. The more you have on credit, the more you’re paying on your debt, the less you’re putting aside for retirement. Worse, if retirement comes earlier than you expect, you’ll still have that debt to pay back on a restricted income.

Ignoring Your Credit Score:

While avoiding buying too much on credit is important, it doesn’t mean you can ignore your credit score. You may well need to put something on credit. Whether an emergency expense on a credit card, or an early replacement of a vehicle that has broken down unexpectedly, having the credit available, at a reasonable rate of interest is important. It can save your bacon in many circumstances. A poor credit score, though, means many of those options are either unavailable to you or are so expensive that taking advantage of them would be foolish. Manage your credit score to keep your options open.

Using Standard Savings Accounts:

Many people simply put retirement savings into a standard savings account and let it go. This is a great way to be beat out by inflation. If you have a certain sum of money, in 10 years it will be worth significantly less than it is today. That’s just how inflation goes. So sticking your money in a standard savings account, or under the mattress, just means that money will be available but worth much less than when you set it aside. Also, it’s very easy to pull money out of those accounts and that temptation can be overwhelming. Putting retirement savings in a tax-protected account provides some tax benefits and puts up barriers to early withdrawal.

Living Beyond Your Means:

The less you spend on a new car, new house, and gadgets and toys, the more you can put towards retirement. Don’t starve yourself, but realize that it’s all a trade-off. More toys now, or being comfortable in retirement.

Being Too Risk Averse:

Investment is required these days for successful retirement. If you have the time, if you’re a younger person, don’t be totally risk averse, you have time to work the market and take advantage of the ups and downs.

Edward Schinik has been with the Investment Manager since 2009 and has been with one Affiliated Investment Manager since 2005.

Three Financial Mistakes to Avoid in Your 50s

 

Three Financial Mistakes to Avoid in Your 50s

There may never be a good time to make financial mistakes, but there are some completely disastrous times to make mistakes. One such time is when you’re in your 50’s. When you’re getting close to retirement, and there are fewer years to save and grow your money, financial mistakes can devastate your plans to leave work and relax into your golden years.

Once you know what might be considered a mistake, it’s much easier to stop yourself from making them. Here are 3 mistakes you should avoid at all costs once you hit 50.

Paying For a Child’s College Tuition:

If you have a college savings account with funds set aside to help your children through college, that’s a great way to help them out. But if you haven’t saved anything for their tuition, don’t be tempted to dip into your retirement savings to help them pay. It’s hard to say no to your kids, especially when they’re in need, but taking money out of your retirement savings puts your entire future in jeopardy.

Cosigning On a Loan:

From private student loans to auto loans, there are many opportunities for you to get dragged into the debt taken on by friends and family members when you cosign on their application for credit. Cosigning a loan isn’t just helping your loved one by improving their rates; it’s guaranteeing that you’ll step in and make payments if they default. While your loved one may never intend to do so, it can happen, and if it does, it will drag down your retirement.

Increasing Your Debt:

Debt is a reality of life, but it shouldn’t be a reality of your retirement. While a limited number of financial liabilities may make it into your retirement years, you generally want to avoid driving up your debt in your 50’s. Paying interest out of your retirement funds is painful, and when that interest outweighs what you earn on your savings, it can make a huge dent in your nest egg that can prevent you from living in comfort as you age.

Your 50’s give you one of your last chances to create the kind of retirement you’ve always dreamed of. Avoid making mistakes as much as you can and focus instead on giving yourself a more stable financial foundation so you know you can continue to care for yourself and you won’t be a burden to your loved ones in the future.

 

Edward Schinik has been with the Investment Manager since 2009.

How to Finance a Handover

How to Finance a Handover

You have worked hard to build your business. Years, even decades, have been committed to building your business and earning your reputation. Now that the time to begin considering a succession plan has come, there are a number of key issues to consider. Once you have made the decision to hand your business over, perhaps the greatest question you may need to consider is how the deal will be financed.

There are numerous ways to finance a handover of your business. The method you choose may depend on not only the particular buyer, but also whether you want to receive regular payments from the handover of simply get a lump sum payment once the transaction is complete.

Whatever you decide to do, the very first step will be getting all of your paperwork in order. This may include tax records, inventory, accounts receivable, accounts payable, real estate holdings and more.

Once you have all of the necessary information in order, it’s now time to make some decisions.

What is the Business Worth?

Before any financing for a handover can take place, the business must be assigned a value. This can vary greatly from business to business, and can depend largely on the type of business being discussed. Although there are some common methods of valuation, such as X times trailing earnings, you may be best off consulting a business broker or advisory firm.

Where Can the Business be Improved?

Anyone seeking financing to purchase a business will not only scrutinize the financials closely, but potential lenders will also take a very hard look at all aspects of the business before loaning funds to purchase it. If you see any major gaps in operations or other areas that can be improved, in may be wise to make such improvements before looking to sell.

Would you Prefer an Income Stream or Lump Sum?

The answer to this question may largely depend on your goals after selling the business. There may also be some significant tax ramifications to consider as well. Although financing may look attractive at first glance, that potentially higher rate of return may also come with some serious headaches.

Post-Sale Protection

Just because you have sold a business does not necessarily mean that you no longer have any liability in the business. Any transaction should spell out who is responsible for issues arising from pre-sale operations. In addition, any financing agreement must also lay out terms of the sale and how you will be paid. You should also include a course of action should the buyer default on financing payments. This is an area in which a qualified business attorney is money well-spent.

The process of handing over a business can take considerable time,often a year or more. In the meantime, make sure to continue to run a tight ship and run things “business as usual.” Patience may pay large dividends when it comes to handing a business over, and making sure all potential issues are covered will help ensure a seamless transition.

Edward Schinik has been with the Investment Manager since 2009 and has been with one Affiliated Investment Manager since 2005.

How to Trim Your Car, Home and Health Insurance Premiums

How to Trim Your Car, Home and Health Insurance Premiums

Some types of insurance are required, such as your auto insurance and your homeowner’s insurance. Even without a lender’s requirement for home insurance or your state’s requirement for auto insurance, you may understand the true financial benefits associated with purchasing coverage and maintaining an active policy. Home, auto and health insurance are among the most common types of insurance that people purchase, and they are all designed to help you pay for unexpected expenses. In some cases, coverage can save you thousands of dollars or more. However, the cost of insurance premiums can be substantial, and you must pay your premium regardless of whether you actually use the insurance or not. These are some effective ways to save money on your premiums so that you can get the coverage that you need.

Choose a Higher Deductible:

When you buy home, health or auto insurance, the decision about the deductible amount is yours. However, there are usually some upper and lower thresholds provided by the insurance companies. For example, with a homeowner’s insurance policy, you can usually request a deductible that equals one to two percent of the replacement value of the home. You could also set a reasonable fixed dollar amount, such as $2,000. Remember that a higher deductible amount yields a more affordable premium. When choosing a higher deductible, do so with care. When your deductible is too high, it is not affordable to file a claim as needed. A smart way to combat this problem and still enjoy the benefit of a higher deductible is to increase your savings account balance accordingly.

Shop for New Rates Periodically:

There are many factors that can affect the rates that you qualify for. For example, your auto insurance rates may be based on your credit rating, your age, your driving history and other factors. While shopping for rates on a new insurance policy is wise, remember that you also should shop for rates annually in order to avoid paying for your insurance policies.

Look for Discounts:

Another great way to potentially save money on your insurance premiums is through discounts. Health insurance discounts are not common, but you can usually find numerous discounts for home and auto coverage. For example, a home insurance discount may be available if you have a security system. An auto insurance discount may be available if you have a great driving record. In addition to these and many other common discounts that may be available to you, remember that some insurance companies offer an additional discount if you bundle coverage together or if you set up automated payments.

Auto, home and health insurance are veritable necessities, and it is not wise for most people to be without these coverage types. However, paying for them can be expensive. As you can see, there are multiple strategies available to save money on the various types of coverage that you need. Now is a great time to review your existing coverage and to make updates as needed.

Edward Schinik is the Chief Operating Officer with the Investment Manager.

3 Reasons to Avoid Personal Loans

3 Reasons to Avoid Personal Loans

No matter who you are, no matter how well or wisely you manage your money and no matter how rich or poor you are, there is going to be a time when you will be desperately strapped for cash. Sometimes, this may only represent a temporary situation, but sometimes it is the culmination of a long string of financial setbacks. When financial crisis hits and you are staring at a stack of bills and an empty refrigerator, gas tank and bank account, a short or long-term personal loan may seem like the perfect solution. Generally, this is not the case and here are three reasons why.

1. Lower credit means higher interest rates:

Personal loans are a particularly bad idea if you have bad credit. Since bad credit makes you a credit risk, you will pay extraordinarily high interest rates on a personal loan. Your credit will also often take a nosedive when you are in any kind of extended financial crisis, such as being unemployed for a long period of time or experiencing some type of ongoing illness that brings big medical bills. If your credit is not bad and you can get a low interest rate loan, then it isn’t quite as catastrophic as trying to take out a personal loan with bad credit. In that situation, you are generally just taking a bad situation and making it infinitely worse.

2. Shorter terms means higher payments:

Once again, taking out a short term loan can often cause a bad situation to just get significantly worse. Since personal loans often have much shorter terms than other types of loans, it also means higher payments. If you don’t come out of your financial slump quickly after taking out a loan, you will only dig yourself even deeper into a financial hole. Generally, when you go through a difficult period financially, you don’t generally rebound quickly. It generally takes some time to get back on your feet financially, even if you experience some kind of turnaround in your finances. If you are unemployed and take out a personal loan to make ends meet until you get a job, even if you get a job just after taking out the loan, you will now be saddled with a high loan payment in addition to trying to get all of your other debts and bills back under control.

3. The best way to get out of debt is almost never to create more debt:

Taking on more debt when you are already in debt is like pouring more water into an already sinking ship. A far better option to taking on more debt is slashing expenses instead. Too often, when people experience financial hardships, they try to maintain their same lifestyle. Cutting expenses like cable, expensive cell phone plans or eating out can go a long way towards helping you conserve your resources rather than just creating more debt. Transferring your debt, however to a lower interest credit card is not creating more debt or taking out a loan on things you already own, such as a car or home can also be better alternatives to personal loans.

Edward Schinik is the CEO of Yorkville Advisors.

The Personal Finance Spectrum

The Personal Finance Spectrum

Just as our background, hobbies, and beliefs are varied, so do Americans’ money habits. Some people refer to themselves as savers, who hoard every penny and put it to use for something more long-term, while others like to spend it as quickly as possible, leaving very little thought to the future.

However, most people are not one or the other, but fall somewhere on a personal finance spectrum, with one side representing extreme savers, and the other side consisting of people that are extreme spenders, with a few other categories sprinkled in the middle.

Red:

People that are completely on the red side of the spectrum operate paycheck to paycheck, with anywhere from 0-2% of their finances going to savings. They consider very little to be actually investments, usually buying the most expensive homes and cars they can afford and trading them out as quickly as possible. They also pay down debt very slowly, usually only making minimum payments, if that.

Orange:

Despite not being completely day-to-day as the people in the red group, the orange section are still considered more of a spender than a saver. They make some debt payments to accelerate that process, but they also like to spend the majority of their income on everyday pleasures. About 15% of Americans fall into this group in some way, and even though they’re more forward-thinking than the red group, they still are not quite where they want to be.

Yellow:

Located squarely in the middle between spenders and savers, the yellow group has read more than a few books on personal finance and wants to retire early while still maintaining a semblance of day-to-day luxuries. They don’t tend to eat out very much, except for social events or special occasions, make their coffee at home, and drive used cars when they could afford something new. The yellow group values financial freedom and early retirement, which makes this stage not so much a permanent destination as much a stopping point on their financial journey.

Green:

This group has barely a spending bone in their body. They value reliable, used cars, and drive them into the ground, at which point they buy another used, reliable car. They maintain their own home, choose entertainment that is relatively cheap or free, and save roughly 15-25% of their paycheck every time. They’ll splurge on the things that they use regularly, but most of their purchases are very practical and calculated, especially in response to the red group mentioned earlier. Normally, these are people that want to retire fairly young or have decided later in life to make financial responsibility a priority.

Blue:

For people who take pleasure in budgeting and cutting costs whenever possible, the blue group is for you. While they insist on socking away nearly half their paycheck into savings, they’re still not as extreme as some people who choose to save nearly everything. Their lifestyle is not dependent on financial situations, because they’ve been able to save so much money in the meantime. As a result, early retirement is not just a dream to these people, it’s a very near reality.

 

Edward Schinik has been with the Investment Manager since 2009 and has been with one Affiliated Investment Manager since 2005.

5 Things You Should Know About Money

5 Things You Should Know About Money

Money, and the need for it, is one of those stressors that is never going away. The majority of Americans don’t have the first clue about what to do, because they have never been formally taught anything about handling money. However, that does not mean that there is nothing you can do to try and take control of your personal finances and better understand how to handle your money.

1. Save Early, Save Often:

If you are not putting aside some of your paycheck into savings each payday, then start doing so. The sooner you start creating saving habits, the sooner you will find that your situation suddenly is not as dire as you might have thought. Having a savings account is like having a safety net that will catch you in times of financial distress.

2. Investments for Long-Term Savings:

Good investments are those that are done within your means toward a financially beneficial venture; bad investments are those that are done outside your means in a high-risk low-yield venture. Long-term investments can seriously benefit your future if they are done correctly, and if you have some extra money that could be put towards such an investment, then it would be a good idea to discuss your options with a financial professional and see which investments would work best for you. The sooner you start investing the more time your money has to mature, which means bigger and better long-term gains for your future.

3. Do Not Fall for the Scams:

The unfortunate reality of today’s market is the existence of countless scam artists who know how to talk people into giving up their hard-earned money. To try and avoid these types of people and keep your finances secure, remember the following:

  • If it seems too good to be true, then it is. Don’t fall for “get rich quick” schemes that are more likely than not scam artists looking to steal your identity.
  • Be careful who you give you credit card information to. This seems obvious, but it is still one of the most common ways that identity thieves get their dirty work done.
  • Monitor your bank accounts regularly and keep an eye out for suspicious charges.

4. Get Insured:

In case of an emergency or natural disaster that has the possibility of leveling your home, car, or other costly possessions, insurance is always a good fail safe to keep your financial situation afloat. Insurance will help cover your losses and keep you from losing everything in the worst case scenario.

5. Manage Your Debt Wisely:

Debt is virtually unavoidable, but that does not mean it needs to be out of your control. Make your payments on time, and be careful about how much debt you take on. If you are already struggling, then it might not be a good time to be looking into a new car. Be smart, and always pay attention to your financial situation.

 

Edward Schinik has been with the Investment Manager since 2009 and has been with one Affiliated Investment Manager since 2005.