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Archive for January, 2009

I Want a Bailout!

January 21, 2009 Leave a comment

Calvin and Hobbes’s brilliant take on the US financial crisis.   I am so sick of hearing of YET another bailout!  Greedy corporations and fiscally irresponsible individuals to be let off the hook with MY hard earned tax dollars?   The whole notion nauseates me.   These people made their beds and need to learn to sleep in it.  I say let capitalism do it’s thing and let these guys go under.   We need to set a precedent for the future by not condoning such behavior.   Americans need to learn that by living within one’s means and respecting our earth’s limited resources, one can live a happy and peaceful existence.

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CHANGE IS HERE

January 20, 2009 Leave a comment

President Barack Obama 2009 Inauguration and Address

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Is College Worth It?

January 18, 2009 3 comments

John Stossel Is College Worth It? 20/20 ABC News

Watch last night’s segment from 20/20 exposing the scam that higher education has become in America. 

The following is a very insightful scenario described by a recent law school grad commenting on this very situation on one of the more popular law boards.  It just proves how poisonous debt can be to one’s financial future and how the magic of compound interest can propel one’s wealth over the course of time.

“I think this is a more interesting financial lesson:

If on my 18th birthday, my parents had stuck my college tutition (say $120k) in a trust earning 8%, it would be worth ~ $760k on my 40th birthday.

And if on my 22nd birthday, I had put the cost of law school (say $140k) in a trust earning 8%, it would be worth ~$480K on my 40th birthday.

Bottom line, if I avoided school and real work my entire life (and instead worked ski patrol in the winters and worked in a surf shop during the summers – i.e. an awesome life), I’d have $1.24 million in the bank at age 40.

Instead I went to an expensive college and law school, neither of which were top 10 schools. Now I work at a V50 firm in manhattan and, according to the surveys cited by Okamoto, earn an income in the top 10% for lawyers. After 3 years of practicing, I’m 29 and have about $150K in the bank and save ~50K a year. I have two to three more years of biglaw in me, before I’ll have to go in house or switch to a smaller firm that pays a lot less. I won’t make a bonus this year and expect bonuses in 2009 to be pretty shitty. Anyway, asuming I can keep making the same salary for the next 11 years doing a job I hate, when I turn 40 I’ll have saved a grand total of $1.25 million in the bank (assuming my savings compound at 8%).

So if I’d skipped college and law school completely and spent the first 22 years of my adult life chilling and never saved a dime, I’d only be worth $100K less.

It makes the investment in education pretty hard to justify.”

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The Great College Hoax

January 17, 2009 Leave a comment

It now appears that with our economy in the midst of a meltdown, the mass media is finally beginning to report on what I have been preaching about in my last posting, “A Lien On Your Life”.   Forbes magazine this week put out an excellent article paralleling the “education bubble” to that of the now bursting real estate bubble.   Don’t tell me I didn’t warn you.   Buyer beware!

“The two disillusioned attorneys were victims of an unfolding education hoax on the middle class that’s just as insidious, and nearly as sweeping, as the housing debacle. The ingredients are strikingly similar, too: Misguided easy-money policies that are encouraging the masses to go into debt; a self-serving establishment trading in half-truths that exaggerate the value of its product; plus a Wall Street money machine dabbling in outright fraud as it foists unaffordable debt on the most vulnerable marks.”

http://www.forbes.com/leadership/forbes/2009/0202/060.html

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A LIEN ON YOUR LIFE

January 5, 2009 Leave a comment

A LIEN ON YOUR LIFE

Primary Care is in for a world of hurt in the very near future. Crushing debtloads with stagnant pay. Still have your head in the sand? It is already happening in the law profession. Something is rotten in Denmark and it is coming our way.

Meanwhile, the lenders and academic institutions are laughing all the way to the bank while they are essentially putting a LIEN ON YOUR LIFE. A lien that can never go away since STUDENT LOANS ARE NOT DISCHARGEABLE. This is truly one of the biggest scams going, if not worse. In any other scam, you only lose what you already have….except in this situation, you lose what you still have yet to make! It’s almost as if you would be better off being swindled out of 50K from some fraudulent email sent out of Nigeria than owing 300K to Sallie Mae which you don’t even have yet! Don’t get me wrong, I am all for paying a reasonable amount back for a quality education. But when you have unreasonable debt loads in an unreasonable healthcare system, paying it back…well…seems rather unreasonable. And what is reasonable? Well, they say you shouldn’t buy a house that is more than 2.5-3 times your salary without over leveraging yourself. In the same vein, I believe that your total student debt (including undergrad) should not supercede your anticipated income. In other words, if you plan on doing primary care, your total debt should not go over 125K or so. It should most certainly not be over 200K. But at the rate things are going, this is going to be very problematic to attain with skyrocketing tuitions and higher interest rates.

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