Today's Cheat Sheet Q&A:
Today’s topic: College Graduation rates
Hi Brian, I have a daughter who's graduating from high school and is still trying to decide which college she will attend. My question is with regard to college graduation rates. Do graduation rates differ between types of colleges? What are current graduation rates? With college being such an expensive decision we want to make sure the time and money invested is well spent and that she graduates with a meaningful degree.
Bottom Line: You are right to question what the graduation rates are for higher education. There are pretty big differences between types of colleges, gender and whether a student attends full or part time. So let’s break it down:
· The average graduation rate for all students who attend a college of any kind: 53%
· 61% of women who start college graduate (full-time)
· 56% of men who start college graduate (full-time)
The average graduation rate by types of college:
· 65% for private non-profit
· 57% for public
· 42% for private for profit
· 31% for two year trade schools
The other factor is full vs. part time:
· 59% of full-time students graduate (vs. the 53% average that factors in part-time)
So if graduation is the most critical decision you’re already a step ahead of the game because of your daughter’s gender. Otherwise choosing a private non-profit will provide your daughter with about a 70% chance of graduation.
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Want your property value to improve - improve the public schools around you:
Bottom Line: Whether you make use of the public grad school system you live in or not, it impacts your property value. It’s likely the impact is greater than you may realize.
Using information from Zillow.com (which now includes school ratings); we can determine the difference in property values for like properties in various school districts. So how much of a difference in property values for single family homes?
· The difference in the top rated schools (8 of 10 or higher) vs. below average (4 of 10 or lower) is 10 – 20%
With many families seeking good schools as a key consideration for raising a family, the school district you live in will generally equate to tens of thousands of dollars worth of difference to you. So if you want to improve your property value, see what may be possible to improve the ratings of the schools in your district?
WOW - the more money you come into the most likely you are to go bankrupt:
Bottom Line: That 90’s Puff Daddy song “Mo money, Mo problems” was more accurate than most would likely give it credit for being. We’ll cover two types of people who suddenly come into a large sum or money and what happens over time to these people. First the lottery winner.
Many if not most people daydream about winning the lottery. How many times have you, or your friends and family, said if I only won the lottery…? Would you believe that statistically you’re far better off if you never were to win the lottery?
According to Vanderbilt University:
· 70% of lottery winners will go bankrupt at some point after winning the lottery!
So truly be careful what you wish for… It’s not just lottery winners though, it seems as though it’s common among many who come into a lot of money suddenly. Sports Illustrated studied the lives of NFL players to determine how they manage financially.
· 78% of NFL players will eventually go bankrupt!
So it’s clear that despite having significantly more money than almost all Americans will ever have, they also have a far greater chance of losing everything than you do.
This proves two concepts I’ve spoken to over the years:
· It’s not how much you earn, it’s what you do with what your earn
· Having a steady financial plan that you execute over time will set you up for success
Clearly what’s lacking with these people who suddenly have large sums of money is a plan. Diligence and dedication to long term financial wealth building statistically means that that a person who makes $50,000 will retire with more than an NFL player or lottery winner.
Are you underwater on your car? What to consider before you buy:
Bottom Line: While plenty of attention is paid to underwater home owners, very little is ever paid to underwater auto owners. There are nearly as many auto loans that are underwater as home owners who are these days.
While just over 9 million home owners are underwater on a mortgage, just fewer than 6 million Americans are underwater on an auto loan. Being underwater on an auto loan isn’t a new issue (that’s what gap insurance is sold to combat), it’s a growing problem. This is a big reason for this issue exacerbating:
· The average price of a new car continues to grow while the used car market is finally seeing prices moderate due to having plenty of inventory against demand
So the average price of a new car is now nearly $30,000. As the average price for a new car continues to rise, so does the rate of depreciation with lower demand for used cars. The result:
· The average first year depreciation for a new car is up to 22%
Not surprisingly the higher the price of the car, the higher the average first year depreciation. I’ve always thought that gap insurance is a bit of a racket so instead of spending good money after bad, be more strategic before you buy.
If you think you’ll sell your new car before you’ve paid off your loan consider leasing instead and/or pay special attention to the expected resale value of the vehicle you’re considering purchasing.
Another creepy yet helpful advance from Google:
Bottom Line: If you use Gmail or basically any free email service you likely or should know that every email sent to you and from you is scanned by the provider. That’s how they make money off of your “free” email. They use the data for marketing purposes and may even sell some of the information to third parties. That being said here is a potential benefit to you from the somewhat creepy scanning practice.
Google is starting a billing reminder service for free though Gmail and Google now. The way it works is that when you receive an email from an entity you owe money to; it sends a reminder to you to pay the bill and can even interface with the company you owe money to enabling you to pay straight through Google.
At least if they’re using your information for their purposes – they can let you see some benefit to the data collection…