Introduction Estate planning is primarily about the transmission of wealth. However, it should be about much more. Many people don’t want to delve into family skeletons or tackle emotionally charged issues. …
April is financial literacy month and the month-long celebration often comes with appeals to low-income and marginalized communities that suggest the silver bullet to their financial woes is financial literacy–and it’s …
Tesla’s electric Semi trucks are being recalled over a faulty electronic parking brake, according to a notice posted online by the NHSTA. The recall comes after Tesla made its first deliveries of the highly anticipated Semi to PepsiCo and Frito Lay this past December.
“A parking brake that is not engaged as expected when the driver releases the brakes may allow the vehicle to rollaway, increasing the risk of crash,” the NHSTA said in its recall notice.
The recall covers just 35 vehicles, another testament to how few of these have been delivered so far. Tesla will replace the faulty brake free of charge, according to the NHSTA.
The all-electric Tesla Semi garnered a lot of attention when it was first announced during a splashy ceremony by Tesla CEO Elon Musk in 2017. But it took many years to finally become a reality, with production of the vehicles starting in October 2022 and deliveries to customers beginning in December.
The Tesla Semi has an impressive range of 500 miles on a single charge and attracted pre-orders from a number of companies, including Walmart, Anheuser-Busch and UPS. PepsiCo reportedly hopes to have 100 Tesla Semi trucks on the road by the end of this year.
As CNN notes, there have been a number of social media posts showing the Tesla Semi broken down on the side of the road during its relatively short life. But Tesla is known for fixing problems with software updates after cars have been introduced. In the case of the brake recall, it’s clear this wasn’t something that could be fixed with an over-the-air update.
Tesla did not respond to a request for comment on Saturday, probably because the electric vehicle company shut down its PR office in 2020. Musk has an adversarial relationship with the press and shut down Twitter’s press office when he took over that company late last year. I’ll update this article if I hear back, but I’m not going to hold my breath on that one.
Introduction Estate planning is primarily about the transmission of wealth. However, it should be about much more. Many people don’t want to delve into family skeletons or tackle emotionally charged issues. …
Estate planning is primarily about the transmission of wealth. However, it should be about much more. Many people don’t want to delve into family skeletons or tackle emotionally charged issues. But the reality is that if you fail to plan, or fail to address tough issues, or ignore practical planning logic, you might be planting the seeds for family dysfunction or much worse. While the list of ways to mess up your kids with a poorly handled estate plan is long, hopefully the following will help you avoid many of the traps.
Not Planning Flexibly
If you want any planning to work, ask lots of “what if” questions. Stress test your plan. To many plans are just documents and decisions made to address whatever the client wants today. That is rarely prudent. Here’s an example if one of the worst inflexible plans. The couple had four children and were active with a number of charities. They even referred to charity as their fifth child and they wanted to treat all of them equally. So, years ago they hired an attorney who drafted a will that left their $1 million estate as follows: $200,000 to each of the four children and the remainder to a list of charities. That works, but is dangerously inflexible. When they finally went back to a new estate planner more than 15 years later their estate was $10 million. They would have wanted to pass $2.5 million to each child and to their list of charities. But because of the inflexible way their old will was drafted, had they died before signing a new will each child would have received $200,000 and the charities would have shared $9.2 million. Not even close to what they wanted.
The moral of this tale is to have plans created that are flexible to change with changing circumstances. Market declines or increases should not undermine your plan.
The above plan could have been created with the thought that the client’s wanted to be sure that their children each received the minimum amount before charity received anything (but no one could remember as it was so old). But the wills were drafted in a way that a large increase in the estate would result in the opposite of what they wanted. A smarter way to have drafted their will might have been, had they wanted to make sure their children got a certain amount like $200,000 would have been to bequeath the first $800,000 of wealth equally to the children and the excess then in equal shares for each child and charities. Whatever your desire is, be sure that the priorities are reflected in your plan.
Another similar type of issue might occur, for example, where one child has greater needs then the others. If you feel that the assets are sufficient to divide them equally for all the children, and in so doing the child needing greater help will be adequately provided for, that might be acceptable. However, if your estate declines in value (remember, stock markets don’t always go up), that needy child might not get enough. In that case you might instead provide the first say $500,000 shall be bequeathed to that particular child and thereafter all assets in your estate divided equally. As discussed below, be sure all heirs understand what you are doing and why to reduce surprise and hard feelings about one heir being favored.
There is no magic formula. While certainly the best answer is to review your will and other planning periodically, and especially if there is a change, and update them. But it is rarely prudent to plan on that happening. Most people feel about as happy about updating their will as they do about having a root canal done. So, while you should review and update, get your planning structured in a way that it has a better chance of accomplishing your goals whatever might occur.
Not Considering Children’s Attitudes and Beliefs
You want to name your oldest son as your executor because you somehow believe that is the right thing to do. But will he in fact be fair and objective? What happens when a decision has to be made that might put his interests in conflict with those of another child? What might he do? Does he have the right temperament and values to serve in a fiduciary role?
If you really want to have fireworks name a child as your health care agent to make health care decisions who has very different religious or philosophical views of those decisions, then you and the other children do. Perhaps your entire family is devoutly religious, and your religious beliefs materially inform end of life decision making. But you’ve named your oldest daughter, who is a physician, to serve as your health care agent. You know that she has veered far off the religious path in which she was raised, but you feel as a physician and your child she should be named to make health care decisions. Perhaps you have not really acknowledged her significant changes in religious views. This is one of the implications of a non-religious agent making end of life decisions that contradict the fundamental religious beliefs held by you and the other children.
Consider the following, which is sadly not an uncommon problem. An elderly mom names her oldest son her agent under her financial power of attorney. Her son takes care of her finances, medical care and all her needs and she feels he is the only child to pick for this role. As the years go by and son continues to provide care giving help to his mom he grows more resentful of the fact that when Mom passes his siblings will share equally in her estate. So, he resorts to some self-help. Son uses the financial power of the attorney mom signed naming him her agent to change beneficiary designations and account titles to assure that most of the estate passes to him alone. Not what mom intended, but what son eventually felt entitled to.
The moral of the above story is to carefully consider the scope of the powers and rights given to any fiduciary you appoint.
Hiring a “Yes” Adviser
Hire advisers that will tell you want you need to hear, not what they think you want to hear. If you want to hear “yes” all the time buy a parrot, don’t waste your money hiring professional advisers. Clearly inform every adviser you work with that you want them to tell you what they really think, and if you ask them to do something imprudent, they should tell you they think it’s a dumb move. Some clients react really negatively to advisers telling them what they want to do won’t work. You should want truth and guidance, not milquetoast.
Not Using Trusts
“I want a simple plan.” “I hate trusts, my parents set one up for me and it was horrible.” The list goes on. But leaving money outright to any heir is usually a mistake. If you leave a child’s share of an inheritance outright (i.e., no trust) and the child is divorced or sued after you pass, that entire inheritance might be lost. Many inheritances have been wiped out by IRS liens, malpractice claims and other risks that all could have been avoided with a simple trust. If you really have confidence in your child’s fiscal skills, so make the child a co-trustee of his or her trust. Or if you really want the heir to control, make them the sole trustee of their own trust. Note, if that is done the child/trustee should be limited to only making distributions to or for his or her own benefit that are limited to a “health, education, maintenance and support” standard. That is a technical definition/requirement that your estate attorney can explain. Using those magical words in a precise manner that the law requires can let the child inherit money in a trust and be the sole trustee but have those assets outside his or her estate and out of the reach of his or her creditors. That is a smart move. Use trusts.
Making Unequal Distributions
You might feel that your youngest daughter is a better child than your oldest son, but likely your oldest son doesn’t feel that way. Be very deliberate if you are going to leave unequal bequests. Discuss this with your professional advisers as it can be a very delicate matter. Consult with a mental health expert to also evaluate options for how to handle the disparity and attendant issues. Mishandling this can result in war between your heirs. That should be avoided. Sometimes there are simple ways to address a desire, or even need (e.g., a child with greater needs as discussed above), to have a disparate distributions. Some families have open discussions as to the reasons a particular child may need more and everyone is on board. Likely, those open and frank discussions may avoid later conflict. But sometimes any preparatory measures may be to little or no avail. There may be ways to accomplish the same objectives with less afront. For example, parents believe that they would like to bequeath $1 million extra to their oldest daughter because their younger son married a very wealthy spouse and himself has been very successful financially. They worry, however, that their sense of “fairness” will never be shared by their son. So instead of having a will leaving a disparate distribution, they purchase a $1 million life insurance policy on their lives (or one of their lives) which they have their son own (or a trust for his benefit). They pay the premiums each year. While their daughter might figure out that there has been a disparate distribution, this approach is certain less “in the face of” their daughter. In fact, the will can now bequeath the estate equally to the two children. Sometimes, a little creativity can lessen the risks of later disputes.
Not Updating Accounts and Beneficiary Designations
Another easy way to wreak havoc with your plan and create issues with your heirs is failing to keep account ownership and beneficiary designations both current and coordinated. A common problem created about this seems so obvious that it should not happen, but it does. Mom has two children and names her oldest as the beneficiary of one brokerage account, and her youngest the beneficiary of her second brokerage account. The account balances are equal. Mom pays for her living expenses out of the first account whose balance declines while the second brokerage account grows in value. Unintentionally the youngest child gets an increasingly large share of her estate as time goes on. This is simply poor planning. This might happen from a misplaced priority on avoiding probate. Using joint accounts or pay on death accounts can avoid probate. But it also can lead to unintended dispositive results. For younger parents that try these simple approaches to avoiding probate, what happens if they have two children listed on various accounts or IRA beneficiary designations, but then they have a third children and don’t get around to updating account titles or beneficiary designations.
A key point from the above examples is to illustrate that it is not only your will that is important to minimize estate disputes or angst amongst beneficiaries. You need to consider all of your assets and how they are owned and what is contained in beneficiary designation forms.
April is financial literacy month and the month-long celebration often comes with appeals to low-income and marginalized communities that suggest the silver bullet to their financial woes is financial literacy–and it’s …
April is financial literacy month and the month-long celebration often comes with appeals to low-income and marginalized communities that suggest the silver bullet to their financial woes is financial literacy–and it’s not. While it’s important to note that financial literacy is an important step toward sound financial decision making, it doesn’t account for those who are financially literate but impacted by behavioral issues stemming from institutional mistrust, historical exclusion, and financial traumas. The stigmas around mental health embedded within these communities also act as a deterrent, preventing its members from seeking the help they may need.
What Is Financial Trauma
While there is no set standard definition for financial trauma, financial trauma can be described as any instance observed or experienced that has a negative impact on the way someone views, interacts with, or believes about money. Most often associated with
Major losses in income or employment
Sustained financial stress due to poverty
Financial trauma can also be triggered by inaccurate financial guidance or advice leading to the loss of savings, or the overleveraging of debt. This speaks specifically to the weaponizing of terms like “generational wealth” to push complex financial products and services to those without the knowledge or income to establish or maintain them. This plays on the ambitions of some to escape or put as much distance between themselves and poverty as possible.
Financial trauma and variations of the term like “money trauma” are increasing in popularity as the connection between how people think and feel about money, and what they actually do with money becomes more mainstream. While this is an important step in painting the complete picture of what overall financial wellness looks like, it often falls short of acknowledging the historical and present day impacts of racially motivated exclusion, exploitation, and abuse endured by Black people as part of a greater generational trauma. The reaction to said trauma can be enough to discourage participating in financial systems that have impacts on the way Black people think about
Retirement and estate planning
Responsible use of credit
The refusal to participate in these systems might seem like a lack of financial literacy on paper, but could very well be tied into the response to generational mistrust and observations passed down through family units. That is to say that the financially traumatic experience might have happened with a grandparent, but the resulting trauma response then became the norm and was passed down to the parent who then passed it down to the child.
Financial Therapy As A Solution
Finding mental health professionals with relatable experiences and education that acknowledge the lived experiences of Black people may be difficult as only 4% of therapists are Black, according to research done by Zippia on demographics and statistics for therapists in the United States. Adding in specialized training in navigating financial decision making, financial anxiety, or financial stress, shrinks that pool even further–leaving those issues unresolved or put on the back burner for a qualified professional to address later.
Acknowledging again however the historical lack of access and institutional mistrust Black people may have when pursuing financial advice or acknowledging a financial trigger to a greater mental health need, this leaves a very small opportunity to address these issues allowing them to continue festering and showing up in relationships, behaviors, and even in physical health.
Fortunately, work being done by organizations such as the Financial Therapy Association blend therapeutic and financial competencies to help people improve overall financial well-being while also curating a directory of qualified financial therapists. Financial therapy or financial counseling can help explore internalized beliefs and behaviors about money addressing
Life events such as the birth of a child, marriage, divorce, etc
Examing these beliefs through the lens of a greater generational trauma allows Black people to inspect how systemic exclusion, abuse, and financial trauma likely impact financial decision making, even if viewed initially as a positive. For example, a high-income earning Black professional who experienced poverty might aggressively save as a response to financial trauma manifesting as scarcity. According to traditional views on financial literacy, this may be a positive behavior. However, viewed through a trauma informed lens this individual may be hoarding money despite having a high income and sufficient savings.
Financial therapy alone doesn’t stand in place of traditional therapy where qualified therapists may diagnose or prescribe medication, but acts as a supplement to cover gaps in financial training or specialization. It’s important to note that some qualified mental health professionals do have financial training or specialization in financial therapy, while financial therapists are not required to have the requisite credentials to diagnose or prescribe medications.
If you are having a mental health emergency, you should contact a qualified mental health professional.
Former president Donald Trump started running Facebook ads on Friday calling his upcoming indictment “the darkest chapter of American history.” And it’s an interesting strategy, considering Trump was banned from Facebook …
Former president Donald Trump started running Facebook ads on Friday calling his upcoming indictment “the darkest chapter of American history.” And it’s an interesting strategy, considering Trump was banned from Facebook until very recently.
“BREAKING: I’VE BEEN INDICTED! We are living through the darkest chapter of American history,” the new ad campaign reads.
Trump was banned from Facebook following the attacks of January 6, 2021, when he told his followers to descend on the U.S. Capitol in an effort to stop the certification of the 2020 presidential election. Trump falsely claimed the vote had been rigged and that he was the real winner, urging his Vice President Mike Pence not to certify the election results.
Trump was subsequently banned from Facebook on January 7, 2021, but parent company Meta announced this past January that it would be lifting the ban “with guardrails.”
“In the event that Mr. Trump posts further violating content, the content will be removed and he will be suspended for between one month and two years, depending on the severity of the violation,” Meta explained in an announcement from Jan. 25, 2023.
Other social media networks like Twitter and YouTube also lifted their bans on Trump in recent months.
But where does that leave Trump’s latest Facebook campaign? Trump’s new ad is filled with incendiary language, including his claim that this is somehow the darkest chapter of American history. U.S. history is obviously filled with dark chapters, including the assassination of four sitting presidents, the Japanese attack on Pearl Harbor, September 11th, and that whole Civil War thing, just to name a few.
“The Radical Left – the enemy of the hard-working men and women of this country – have INDICTED me in a disgusting witch hunt,” the new Facebook ad, which started running on Saturday, reads.
“This Witch Hunt will BACKFIRE MASSIVELY on Joe Biden,” the rambling ad continued.
Another ad, which started to run on Friday insisted shadowy dark forces were at work to harm Trump and his followers.
“The Deep State will use anything at their disposal to shut down the one political movement that puts YOU first,” the ad reads.
While these Facebook ads might read as perfectly normal to most Americans, given the way that Trump has changed politics over the past eight years, but using words like “enemy” and “disgusting” to talk about your political opponents was unheard of in mainstream political ads before Trump entered the scene.
The ad also asks Facebook users to contribute money to his campaign. Trump apparently raised more than $4 million in the day after it was announced a grand jury in New York had voted to indict him, according to NBC News. Trump is widely expected to surrender to authorities in Manhattan on Tuesday, where he’ll be fingerprinted and a mugshot will be taken.
Incredibly, Trump has surged in the polls among Republicans after news of his indictment was made public. When Republicans were asked who they preferred between Donald Trump and his presumptive Republican challenger, Florida Gov. Ron DeSantis, Trump won by a huge margin. Trump was preferred by 57% of Republicans compared to just 31% for DeSantis, according to Yahoo News. That’s a big swing from two weeks ago, before news of Trump’s indictment broke, when the split was 47% for Trump and 39% for DeSantis.
Facebook did not respond to a request for clarification on its rules Saturday morning. I’ll update this article if I hear back.
Having been hit by any number of money scams, the swindles that rope people in with a fake IRS connection are probably the slimiest.
These scams pop up during tax time, but they seem to circulate throughout the year. Here’s what you need to know:
The IRS continues to see “heavily advertised promises offering to settle taxpayer debt at steep discounts. The IRS sees many situations where taxpayers don’t meet the technical requirements for an offer, but they had to face excessive fees from promoters for information they can easily obtain themselves.”
“Offer in Compromise” mills highlight the Dirty Dozen series of the worst scams that use the IRS in their schemes. “Offers in Compromise are an important program to help people who can’t pay to settle their federal tax debts. But “mills” can aggressively promote `Offers in Compromise’ in misleading ways to people who clearly don’t meet the qualifications, frequently costing taxpayers thousands of dollars.”
“Too often, we see some unscrupulous promoters mislead taxpayers into thinking they can magically get rid of a tax debt,” said IRS Commissioner Danny Werfel.
“This is a legitimate IRS program, but there are specific requirements for people to qualify. People desperate for help can make a costly mistake if they clearly don’t qualify for the program. Before using an aggressive promoter, we encourage people to review readily available IRS resources to help resolve a tax debt on their own without facing hefty fees.”
On the surface, investing through an index fund sounds great. It’s simple, cheap and, as you’ve likely heard over and over, few active managers beat their benchmarks anyway.
But we closed-end fund (CEF) investors know better. Truth is, there are lots of CEFs out there that beat their benchmarks while throwing off healthy dividends north of 8%.
And when you step beyond the world of stocks, into areas like corporate bonds, REITs and municipal bonds, benchmark-beaters are the norm with CEFs. That’s because those markets, which are much smaller than the stock market, give a savvy manager lots of advantages—like a well-stacked contact book—that a “robotic” index fund just can’t match.
But today I want to talk about equity CEFs. In a moment, I’ll show you one that’s crushed the S&P 500 over the last decade—and the gap is getting wider! Plus this underappreciated fund pays a dividend that’s averaged around 8% over the long haul.
I think you’ll agree that this is a much better way to invest than through an index fund like the Vanguard S&P 500 ETF (VOO)—especially since the average index fund only pays 2.1% today.
Forget Beating the Index—Even Matching It Is a Boon With CEFs
Before we get to that fund, consider this: even if you can just match an index with a CEF, you’re still way ahead, because you’re getting most of your dividend in cash, rather than “paper” gains. And we’re happy to take cash these days, with banking crises and an unpredictable Fed roiling the markets.
Consider, for example, a CEF called the General American Investors Company (GAM), which holds well-known names like Microsoft (MSFT), Berkshire Hathaway (BRK.A) and TJX Companies (TJX). Over the last three years, its total return (including dividends) has matched that of the market.
The key difference between it and VOO? The dividend: over this time, GAM has yielded an average of 8.3%.
(GAM, in fact, returns its gains as dividends by design—it aims to deliver all income and capital gains from its portfolio in any given year through its dividend, which it mostly delivers in the form of a year-end one-time payout.)
Sure, VOO got the same return more or less, but since investors were getting less than a 2% yield during their holding period, they had to time the market to not sell at a loss in order to generate cash they could use, in addition to dealing with the headaches, taxes and paperwork of juggling capital gains and income.
That’s a sharp contrast with GAM shareholders, who simply let the dividends drop into their accounts.
How About Beating the Index?
Now let’s get back to that fund I mentioned earlier—the Adams Diversified Equity Fund (ADX), a fund that members of my CEF Insider service will recognize. ADX’s portfolio is populated by strong S&P 500 companies like Alphabet (GOOGL), Visa (V) and UnitedHealth Group (UNH). The fund has been beating the index for a decade.
This trend began around the time CEO Mark Stoeckle joined Adams, bringing a new approach to ADX that has seen its performance soar. By focusing on large cap tech companies that had become deep-value plays, like Amazon.com (AMZN) and Alphabet (GOOGL), he weighted the portfolio toward high-growth stocks when they were undervalued. (In addition, Stoeckle is one of the nicest people in the CEF game, in my opinion, and has the loyalty of his employees.)
ADX currently trades at a big discount that has temporarily widened because of the problems at Silicon Valley Bank and Credit Suisse, even though both of these situations are now resolved (and ADX wasn’t exposed to either).
With an average yield of 8% over the last decade—similar to GAM (and a similar dividend policy)—ADX is a consistent income generator and just one of many great CEFs that get you market-beating returns and big income streams.
College acceptances are in hand. Now comes the hard part: before a May 1 decision deadline, students and their families must figure out how much each school would actually cost themand which they can afford.
When Maddie, an aspiring architectural engineer, was a high school senior in Rochester, N.Y., college admissions experts assured her parents she was an ideal applicant. She was “in a million extracurriculars, top of her class, and entering a male-dominated field,” says her understandably proud mother, Jennifer. Sure enough, by this time last year, acceptances from Maddie’s top choices, including Northeastern University, Syracuse University and Worcester Polytechnic Institute, had rolled in.
Then came the bad news: follow up financial aid award letters laying out the $80,000 or so total annual “cost of attendance” for each of those private colleges and the not-big-enough merit scholarships Maddie was being offered to defray some of those daunting price tags. The bottom line (a.k.a. the net cost of attendance) came in at more than the family could afford.
“As soon as she saw the number, depending on her mood, sometimes she rolled her eyes and laughed, and sometimes she burst into tears,” recalls Jennifer, who requested we not use the family’s last name. “You’ve heard your whole adult life that there are certain kids whose parents make them pay their way through school—but banks are not going to let them take out $75,000 in loans. The parents have to put their names on those loans,” she points out. “Here we are, ready to retire, and we have to take out mortgage-sized loans?”
For some high school seniors and their parents, April really can be the cruelest month as buckets of cold financial reality are thrown on collegiate dreams. Usually, families have until May 1 to decide on a school and send in a down payment towards what will be one of the biggest expenditures of their lives. It’s a choice that could require taking on big debt and affect other life-defining choices (about career, homeownership, children and retirement) for decades.
The decision making process is even more of an ordeal because financial aid award letters are not standardized, often incomplete, and sometimes downright misleading, making it nearly impossible to compare offers side-by-side without extra calculations and research.
Maddie is now finishing her freshman year at the public University of Cincinnati. Its cost of attendance for out-of-state students is around $47,000 a year—a lot less than her first choices. Meanwhile, her high school junior brother, after watching Maddie’s experience, is focusing his college search on State University of New York schools. Undergraduate tuition for New York residents at the system’s four-year colleges is currently $7,070 per year, with the total cost of attendance coming in at $23,740.
GIVE THAT COLLEGE AID LETTER AN “F”
To help other families navigate through this mess, Forbes spoke with financial aid experts to get their best advice for deciphering financial aid award letters and appealing for more aid when appropriate. High school juniors now beginning the college search can use the Department of Education’s College Navigator Tool and its College Affordability Transparency Center to research both gross and average net costs, based on income level, at specific schools. But keep in mind, your individual results could vary, so don’t write off applying to a school that suits you academically, based on those tools alone. A wealthy school able to fully meet a lower income family’s financial needs could end up costing less than a cheaper school with a small endowment.
Here’s a step-by-step guide for high school seniors.
Find Your True Cost of Attendance
It’s essential to know your individual net price of attendance for each institution you’ve been admitted to so you can compare your options, figure out whether your family can swing the price and get a read on how much debt you might end up with—and whether that burden is worth it to you. Sadly, colleges don’t make such comparisons easy, since most don’t follow best practices (as defined by the Department of Education) in their financial aid award letters, according to a report last December from Congress’ Government Accountability Office.
Start with the gross cost of attendance. That includes tuition, mandatory school fees and room and board, as well as textbooks, transportation costs and an allowance for other personal expenses.
To get your individual net price, you would then subtract any grants or scholarships being offered. But the net price, the DOE says, should not include loans, which will have to be paid back, or work-study awards, which come with their own strings attached, including the fact that the student must work for pay, taking hours away from studying, other paid employment, or projects (such as scientific research or internships) that might be important for that student’s future career or grad school application.
Families often must calculate the net price themselves, and may need to scour a school’s website and even call the college financial aid office to extract additional information. Four in ten colleges don’t include a net price in their financial aid letters at all, and another 51% of colleges include a net price, but actually understate it by factoring in loans, according to the GAO report. Put another way, only one in ten colleges owns up to the true net price, as the government defines it. (Quibble with the government’s definition if you want, but there’s no question that families would have an easier time making a decision if every college followed the same accounting rules—just as public companies are supposed to follow certain rules when presenting their earnings.)
Only one in ten college financial aid letters owns up to the true net cost for a family. Others leave some expenses out, mislabel loans as “aid” or ignore costs completely, while touting a scholarship award.
“Students and their families are at a disadvantage from the get-go,” says Melissa Emrey-Arras, director of the GAO’s Education, Workforce and Income Security team. “They’re getting offers that aren’t providing all the information that they need.”
It’s not just net cost, but any information at all about cost that’s lacking sometimes; one in five financial aid letters reviewed by GAO didn’t provide any cost information, Emrey-Arras reports. “It’ll be like ‘Congratulations, you’re getting the scholarship.’ And then you think ‘Oh my gosh, I’m getting the scholarship. That sounds great.’ But if you can’t figure out how much you owe [after the scholarship], you can’t make an informed decision about whether you can afford to go to that college,” she says. “You could get a scholarship that is a lot of money, but then the tuition and the other costs could be so high that it might be actually cheaper for you to go to a different school.”
Even colleges that provide a full breakdown of all your costs may lowball expenses in certain areas. Colleges often underestimate textbook prices, says Mark Kantrowitz, a financial aid expert, Forbes contributor and author of several books on paying for college. “I’ve seen examples where the college says ‘Oh, your textbooks for the entire year will cost you $250,” Kantrowitz says. “But it depends on the particular field of study. A single chemistry textbook can cost you $250.” His solution: average the textbook estimates from all of the colleges you’re considering, and use that as a standard. So if one college says textbooks will cost $250 per year, another says textbooks will cost $1,000, and a third quotes $700, assume (for purposes of comparison) that textbooks at any of the institutions will be around $650 per year.
Transportation costs are another area where you can’t really rely on the numbers in a financial aid offer. “Transportation costs are going to differ based on where you’re coming from and where the college is located. If it’s in your backyard, your travel expenses are a lot lower than if you’re flying halfway across the country,” Kantrowitz says. “Also, how many trips home from school are you going to do? Are you going to come back every break—spring break, summer break, Thanksgiving break and winter break? Or are you just going to go home once?”
Understand Aid Types and Traps
Rochester financial aid advisor Liane Crane tells families to look for four key figures in colleges’ letters: merit scholarships, grants, loans and work study offers.
Merit scholarships, usually awarded to students who demonstrate outstanding academic achievement or excel in other disciplines like the arts or athletics, are often listed on award letters as “presidential scholarships” or under other institution-specific names. Essentially, these are discounts on a college’s list price that are not based strictly on a family’s financial need (although some colleges do take into account how likely an award is to swing a student’s decision).
Merit aid frequently comes with strings and a gotcha. One common string: a student may have to maintain a certain grade point average to get their merit scholarship renewed each year or semester. That’s understandable. But then there’s this gotcha: some merit aid is front-loaded, meaning that the college will grant the scholarship during the student’s first year, and later will reduce the award or won’t offer it at all, regardless of how well a student does in school. If it’s unclear whether a scholarship will be awarded for all four years of undergraduate schooling, students should call the financial aid office and ask explicit questions, Crane says. Getting it in writing doesn’t hurt either. Another way to judge whether a school will renew its merit aid is to look at College Navigator to see the average aid provided to freshmen versus all students. If the freshman aid is higher, that could be a tipoff that the school is frontloading its merit aid.
Grants are discounts based on a family’s financial need and include federal Pell Grants of up to $7,395 for low income students and discounts or scholarships that the university (and/or its donors) are supplying based on a family’s financial need. A family’s need is calculated by the Free Application for Federal Student Aid (FAFSA), and also, in the case of a few hundred pricey private schools, the College Board’s CSS Profile form, which asks for additional information, such as parents’ retirement savings and equity in the family home. (Users of the CSS form include Harvard, MIT, Stanford, the University of Pennsylvania and Yale.)
The information on these forms are used by schools to calculate your expected family contribution—that is, the amount they believe you and your parents can pay out of pocket each year from your income and by dipping into your assets, including 529 college savings accounts and other assets in either the parents’ or a child’s name. If a school advertises it meets the full financial need of students, what it means is that its aid package covers everything but your EFC. Whether a family can actually come up with that EFC without a lot of hardship is another matter.
Parents can borrow the balance needed to pay college costs through federal PLUS loans. They should be wary. These loans carry relatively high interest rates and origination fees and parents who default could have part of their Social Security retirement benefits withheld.
“Parents might be under the illusion that they’re getting all this free money, but it could change,” Crane warns. If a family’s financial situation changes significantly while their student is in college, it could reduce, or increase, the grant money the student receives. One common change you might not think about: the number of college students you’re paying tuition for. For example, your younger child might see their need based aid reduced after an older sibling graduates.
Crane cautions students and parents not to be too enamored by the grant and scholarship totals—what’s important is the overall net price. “I’ve had many conversations with parents who say ‘They’re going for free’ or ‘They gave them $20,000 and this is a better deal,’ but the school costs $20,000 more” than the others, Crane said.
Work-study awards require a student to find and keep a job on campus, and work the number of hours required by the program in order to meet the total listed on the award letter. For some students, this can be difficult to maintain as their course load increases. It’s also important to know that in order for the work-study award to match what it says on the letter, the student must put their paychecks entirely towards college expenses.
Student loans are perhaps the most difficult piece to work through, since colleges list a variety of loan options and don’t use standard terminology to describe them. College financial aid letters can be intentionally misleading; A 2018 report by New America discovered that colleges used 136 unique terms to describe the Federal Direct Unsubsidized Loan, and 16 of those terms didn’t even include the word “loan.” Some colleges referred to the federal loan as “Fed Direct Unsub L,” “Direct Unsubsidized,” or simply “Unsubsidized.”
“It is deceiving,” Crane says. “People [don’t] understand it is a loan and money that needs to be paid back.”
There is a strict limit on how much in direct federal loans an undergraduate can take out a year—it’s $5,500 for freshmen who are dependents of their parents. The interest rate on these loans is fixed, but each year it’s adjusted for new loans. For example, new undergraduate loans issued between July 1 2022 and July 1, 2023 carry a 4.99% rate, up from 3.73% the year before.
Some colleges also include parent PLUS loans—unsubsidized federal loans made directly to the parents of undergraduate students, which can be as large as the net cost of attendance—as part of financial aid they say is reducing (or even zeroing out) the net cost. The New America study found that 15% of financial aid letters deceptively referred to these PLUS loans as “awards.” Fred Amerin, founder of PayForEd, a company that offers software to help employers and families navigate student loans, says that any PLUS loans included in an award should be subtracted when you are comparing the net cost. “Really it’s a finance option of $20,000 or $30,000,’’ he says. In some cases, colleges will also include a private loan option in their financial aid packages.
Note that PLUS loans carry a far higher interest rate and stiffer fees than loans made directly to undergrads. The current rate on these loans is 7.54% and 4.23% of each loan amount is kept by the government as an origination fee, compared to an origination fee of 1.06% on direct loans made to undergraduates.
Experts advise parents to be especially wary about taking out loans right now while interest rates are so high. “Pre-Covid we saw the federal student loan rates coming down, and usually private loans follow suit. And then Covid hit and they went up, but people really weren’t aware because of the [Covid related student loan repayment] pause,” Crane says.
Americans owe a stunning $1.8 trillion on student loans–more than they owe on their cars, for example. Among the fastest growing categories of student debtors are Parent PLUS borrowers. A Century Foundation report last year called parents the “hidden casualties” of the student debt crisis and noted that tens of thousands of parents who defaulted on these loans have seen part of their Social Security retirement or disability payments withheld by the government.
Need More Aid? Ask
Yes, a student can—and should—negotiate with their prospective colleges for more aid if they need it, financial aid experts advise. This negotiation process is typically called an appeal, and a student’s case is much stronger if they can show the college that their financial situation isn’t accurately captured by the FAFSA or other financial documents, says Kantrowitz, who wrote a book called “How to Appeal for More College Financial Aid.”
“It’s not like bargaining with a car dealer, where bluff and bluster is going to get you a bigger, better deal. It’s mostly driven by special circumstances, which are financial circumstances that affect your ability to pay,” Kantrowitz says. “Financial aid is based on two-year-old income information from the prior year. What if your income has changed? What if your parents lost their job? … Your parents might have high dependent care costs for a special needs child or elderly parents, or high unreimbursed medical and dental expenses that are presumably ongoing.”
An appeal for more financial aid might be successful—particularly if you can show your finances have worsened. “It’s not like bargaining with a car dealer, where bluff and bluster is going to get you a bigger, better deal. It’s mostly driven by financial circumstances that affect your ability to pay,” says college aid expert Mark Kantrowitz.
Colleges often budget for some successful appeals, so it’s always worth an ask, Crane says. In addition, some schools may be worried about summer melt—a phenomenon where current and admitted students withdraw before the fall semester—and may give out more aid to those who ask just to keep their enrollment numbers up.
In addition, if a student misses the cut-off for a merit scholarship before the application deadline, but later improves their test scores, they should appeal for merit aid, Kantrowitz advises. “The reason why colleges offer these academic scholarships is to try to improve their profile by raising their average test score,” he says. “They don’t care if your test score was above their threshold before the admission deadline or afterwards because they still benefit from it.”
The rapid advancement of artificial intelligence (AI) technology is poised to dramatically reshape the modern workplace, heralding a new era of unprecedented change. A March 2023 report from Goldman Sachs highlights …
The rapid advancement of artificial intelligence (AI) technology is poised to dramatically reshape the modern workplace, heralding a new era of unprecedented change. A March 2023 report from Goldman Sachs highlights the situation’s urgency, revealing that the automation of certain tasks could disrupt a staggering 300 million jobs worldwide. Industries involving routine, repetitive tasks that can be easily automated are at the forefront of this seismic shift. In the United States, jobs in office and administrative support, legal work, and architecture and engineering face the highest risk of automation, with 46%, 44%, and 37% of tasks, respectively, potentially replaceable by AI.
However, AI’s impact on jobs will only be evenly distributed across some industries or countries. For example, jobs that demand physical labor are less susceptible to automation, and emerging markets may experience less exposure to automation than developed markets. Despite the looming threat of job displacement, the report emphasizes that AI technology could fuel labor productivity and catapult global GDP by a remarkable 7% over time. It is crucial to recognize that technological advancements have consistently generated new job opportunities throughout history while rendering others obsolete. In light of these findings, a recent Executive AI report by Hunter Marketing indicates that many senior business leaders have already embraced AI. In contrast, others are keenly poised to adopt this revolutionary technology.
This article delves into the future of AI in the workplace and how businesses can leverage its potential to achieve tremendous success. The following sections will provide an in-depth analysis of the key findings, including demographic trends and industry-specific AI adoption rates.
AI Adoption: Demographics and Industries
The Hunter Marketing new report, “Executive AI: What senior leaders think about AI in the workplace” highlights several key findings regarding AI adoption among senior business leaders. The study found that 61% of male and 29% of female executives currently use AI. This disparity suggests that there might be a gender gap in AI adoption, which could be influenced by factors such as accessibility, awareness, or confidence in the technology. Closing this gap should be a priority for organizations aiming to create a diverse and inclusive work environment.
The age group with the highest AI adoption rate is 25 to 44-year-olds, with 61% utilizing AI tools in daily operations. This can be attributed to the fact that this age group is more receptive to new technologies and more likely to embrace innovation. AI adoption decreases with age, with 22% of executives aged 65 and above using AI. This could be due to a lack of familiarity with the technology or a resistance to change in long-established working patterns.
Regarding income, the highest AI adoption rate (61%) is among executives earning between $100,000 and $199,000. Interestingly, the adoption rate is lower (53%) for those earning over $200,000, which may indicate that the highest earners are more likely to delegate AI-related tasks to their subordinates.
The Hunter Marketing report also reveals that AI adoption varies significantly across industries and geographical locations. Manufacturing (80%) and technology (64%) sectors have the highest AI usage among executives, whereas construction (52%) and finance (62%) have lower adoption rates. This suggests that AI’s impact is more pronounced in specific industries while others are yet to experience its full potential. Geographically, executives in New York City (73%) have a higher AI adoption rate than those in Los Angeles (60%), indicating that regional differences may also affect AI utilization.
Challenges and Opportunities for AI Implementation
Senior business leaders face numerous challenges that AI can address. One of the main concerns of C-level executives is competitors are innovating faster (47% of C-level executives). Adopting AI can help organizations stay competitive by automating repetitive tasks, streamlining operations, and enabling faster data-driven decision-making.
Several concerns need to be addressed through widespread AI adoption. Ethical considerations top the list, with 68% of leaders not using AI. Ensuring transparency and responsible deployment is critical to overcoming this obstacle. 45% of non-AI users believe the technology needs to be more accurate.
Ownership is another significant concern, with 72% of executives not using AI stating that the responsibility for AI lies with the IT department. This points to a need for better collaboration and integration between IT and other departments to facilitate AI adoption across the organization.
Moreover, 62% of business leaders feel the benefits of AI could be more transparent, indicating a need for more education on AI’s potential applications and advantages. Companies should invest in internal education and training programs to help executives understand and embrace AI better.
Preparing For The Future of Work
To prepare for the future of work, businesses must adopt a proactive approach to managing the impact of AI on their operations and workforce. The following strategies can help organizations navigate the rapidly changing landscape and capitalize on the opportunities offered by AI:
Upskill and reskill employees
As AI automates routine tasks, the demand for skilled workers with expertise in AI, machine learning, and data analytics will increase. Companies should invest in upskilling and reskilling their workforce to ensure they have the necessary skills to adapt to new roles and responsibilities.
Foster a culture of innovation
Encourage employees to embrace change and explore new ways to use AI to improve business processes. This can be achieved through regular training, workshops, and brainstorming sessions focusing on AI’s potential applications in the organization.
Develop a clear AI strategy
To maximize the benefits of AI, organizations must have a clear strategy that outlines the objectives, goals, and desired outcomes of AI implementation. This should include identifying areas where AI can have the most significant impact and addressing potential challenges and risks.
Collaborate with external partners
Organizations can benefit from partnering with AI solution providers, research institutions, and industry experts to gain access to cutting-edge technology and knowledge. This can help
Focus on ethical AI implementation
Companies must prioritize transparency, fairness, and accountability in their AI deployments to address ethical concerns and build trust among employees and customers. Establishing clear guidelines and ethical standards for AI use will be crucial in maintaining a responsible approach to AI adoption.
Promote diversity and inclusion
To harness the full potential of AI, organizations should promote diversity and inclusion within their workforce. This involves addressing the gender gap in AI adoption, ensuring equal access to AI tools and opportunities, and fostering a culture that values diverse perspectives and backgrounds.
Implement policies to support workforce transitions
Governments and businesses should collaborate to develop policies supporting workers whom AI may displace. This could include offering financial assistance for retraining, providing access to education and training programs, and promoting job creation in sectors with high growth potential.
Integrating AI in the workplace is set to reshape industries and redefine how we work profoundly. By recognizing the transformative potential of AI and proactively addressing the challenges that come with its adoption, businesses can unlock unprecedented opportunities for growth, innovation, and increased competitiveness. Preparing for this future requires a strategic, collaborative approach that emphasizes upskilling employees, fostering a culture of innovation, promoting diversity, and ensuring ethical AI implementation. As we navigate this exciting new era of technological advancement, the organizations that successfully harness the power of AI will be the ones that thrive and lead the way in shaping the future of work. Embracing this change with an open mind and a forward-thinking approach is not only necessary and imperative for businesses’ continued success in the evolving global landscape.
After surging by over 10% or nearly $200 in March, gold is fast-approaching its all-time high of $2075 that it reached during the 2020 pandemic. Since reaching its all-time high in 2020, gold has been treading water without much movement in any particular direction. Interestingly, the price action of the past few years has created a resistance zone overhead from $2,000 to $2,100. If gold can finally close above that resistance zone with heavy trading volume, that would likely indicate that a powerful bullish move is ahead.
The monthly gold chart shows the $2,000 to $2,100 resistance zone along with the long-term uptrend line that began in the early-2000s:
The weekly chart shows the $2,000 to $2,100 resistance zone in better detail:
Gold’s latest surge was caused by the expansion of the U.S. Federal Reserve’s balance sheet as it made the depositors of the two large failed banks — Silicon Valley Bank and Signature Bank —whole. As I have consistently stated in the past, our debt-ridden global economy is hopelessly addicted to monetary stimulus, money printing, and ultra-low interest rates. Any attempts to raise interest rates or pull back on monetary stimulus results in financial and economic crises. This monetary predicament, while terrible for humanity and the global economy, is good news for gold and silver in the years to come.
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While the market is fascinated with the next version release of Chat GPT-4 which is a deep learning algorithm capable of generating human-level conversational responses. The model is trained using a large data sets and generates relevant responses to user questions or inputs. The language model can answer questions and assist you with tasks like: composing emails, essays, code, music and even create educational syllabus. The opportunities are endless.
Chat GPT4 opens up a broad range of possibilities, applications for both for not for profits, for profit or individuals to engage with a more natural communication with chatbots. We thought a dog was our best friend. Well with the growth we have seen, Chat GPT4 is an unprecedented tool winning over minds and hearts – but its too fast and we have to think harder before its far too late.
OpenAI unveiled the new GPT-4 on March 17, 2023, and a great deal of hullabaloo, has happened since then.
First, ChatGPT4 can handle more nuanced instructions than its predecessor, with its uncanny ability to answer almost any question and reason, and with more accuracy. Experts state that the new GPT-4 has almost a 5x improvement on earlier models and that this one is sophisticated enough to draft a lawsuit.
As a result, the social implications of GPT-4 are far-reaching and require careful policy and legislation planning. Once again Pandora is out of the box with out guard rails to guide and help modernize business practices.
What are the ethical implications with ChatGPT4 on job loss?
How will humans adjust to machines that understand better their own feelings and intentions?
How with this enhanced intelligent system impact humans own ability to communicate and interact with one another?
More concerns were released this past week on March 29th, 2023, when prominent computer scientists and tech industry notables such as Elon Musk and Apple co-founder Steve Wozniak calling for a 6-month pause to consider the risks.
Their petition warns that AI systems with “human-competitive intelligence can pose profound risks to society and humanity,” – from flooding the internet with disinformation and automating away jobs to more catastrophic future risks out of the realms of science fiction. It also says “recent months have seen AI labs locked in an out-of-control race to develop and deploy ever more powerful digital minds that no one – not even their creators – can understand, predict, or reliably control.”
The potential of GPT-4 is significant and for this technology to be used responsibly, we need to advance AI legislation faster with more uniformity, governments, corporations, academic researchers and citizens must create guidelines and regulations that continue to advance and protect users’ privacy and security.
We are entering a new world where intelligent solutions are advancing so rapidly that the implications to job loss and society are simply not having evolved sufficiently and the impact could be catastrophic.
See other articles on AI ChatBots that I have written.