Considering Graduate School: A Thoughtful Investment for Your Future? OR A Waste of Time and Money?

In recent years, the debate around pursuing graduate education has gained momentum. With the job market becoming increasingly competitive, many individuals are contemplating whether investing in higher education is truly worth the time and money. Let's delve into the factors that should guide your decision-making process when it comes to pursuing a graduate degree, and I'll share my personal experience choosing Georgia Tech's Online Master of Analytics program.

1. Career Advancement and Increased Earnings

One of the most compelling reasons to pursue a graduate degree is the potential for career advancement and higher earnings. Statistically, individuals with advanced degrees tend to earn more over their lifetimes compared to those with only undergraduate qualifications. Specialized knowledge and expertise in a particular field often lead to better job prospects and increased salary opportunities. This was a key factor that drew me to the idea of further education.

2. Networking and Industry Connections

Graduate school provides an excellent opportunity to expand your professional network. Engaging with professors, fellow students, and industry professionals can open doors to internships, job opportunities, and collaborations. The connections made during graduate studies can be invaluable in securing a foothold in your desired field and advancing your career.

3. Expertise and Skill Enhancement

Master's or doctoral programs offer in-depth knowledge and specialized skills that can set you apart in the job market. Acquiring expertise in a specific area can make you a sought-after professional, enhancing your job security and employability. Many careers, especially in fields like healthcare, law, and academia, require advanced degrees for specialized roles.

4. Personal Fulfillment and Intellectual Growth

Graduate school is not solely about career advancement; it is also a journey of personal and intellectual growth. Engaging in advanced studies allows you to explore your passions, delve deeper into your chosen field, and contribute to cutting-edge research. The sense of accomplishment and fulfillment derived from pursuing a subject you are passionate about can be immensely rewarding.

5. Consideration of Costs and Financial Planning

While the benefits of graduate education are clear, the financial aspects cannot be ignored. Tuition fees, living expenses, and potential student loan debt are significant factors to consider. Additionally, if you need to quit your job, opportunity costs include not only your income but also your career progress. It's essential to weigh the potential return on investment against ALL COSTS involved. On the bright-side, some employers will help fund continued education and don’t forget about research scholarships, grants, and assistantship opportunities which can also help alleviate some or all of the financial burden.

My Personal Journey: Choosing Georgia Tech

My decision to pursue the Georgia Tech Masters in Analytics program was rooted in the intersection of affordability, alignment with my career goals, and the flexibility offered by the online format. This program will bolster my knowledge and skills in data analytics, strategy, and AI, which are critical for my personal and professional growth.

The part-time online format provides me the freedom to study from any location, a significant advantage for someone like me, who wants to maintain my current job, while furthering my education. This flexibility also allowed me to engage with diverse perspectives and connect with professionals from around the world. Finally, although the full cost of tuition is already very low at under $11,000, my employer will cover the entire tuition cost — making my decision a no-brainer.

Conclusion: Making an Informed Decision

Deciding whether to pursue graduate education is a personal and multifaceted choice. Consider your career goals, financial situation, and passion for the subject matter. Conduct thorough research, consult with professionals in your desired field, and evaluate the long-term benefits against the costs involved. Just like any major decision, pursuing a graduate degree requires careful consideration, but with the right planning and dedication, it can be a transformative investment in your future.

Mastering Financial Literacy: Limiting Impulse Spending

In the rapidly evolving landscape of the digital age, where online shopping has transformed the way we make purchases, the importance of mastering financial literacy cannot be overstated. Gone are the days when our parents could rely on stable jobs, pensions, and homeownership for a secure retirement. As a 27-year-old navigating through a maze of online marketplaces and the endless bombardment of ever tempting offers, I have come to realize the significance of limiting impulse spending and developing robust financial literacy skills.

The Temptation of Online Shopping

In a world where a few taps on a screen can lead to a package arriving at your door within days, the allure of online shopping is undeniable. The ease with which we can browse products, read reviews, and make purchases has made it more challenging than ever to resist impulse buys. Platforms like Amazon, Rakuten, TikTok, Temu, etc. offer a vast array of products, from gadgets to fashion, enticing us to spend on items we might not truly need.

A recent study by Slickdeals uncovered a shift in purchasing behavior post-pandemic.

Pre-pandemic impulse spending product categories included:

• Food and groceries (50%)

• Clothing (43%)

• Vehicles (41%)

• Household items (35%)

• Coffee (31%)

• Books (22%)

• Takeout (22%)

• Technology (21%)

• Toys (21%)

• Shoes (21%)

Post-pandemic impulse spending product categories included:

• Cleaning supplies (42%)

• Hand sanitizer (38%)

• Toilet paper (35%)

• Hand soap (32%)

• Canned food (31%)

• Dish detergent (30%)

• Clothing (22%)

• A treat you’ve had your eye on for a while (21%)

• Video games (20%)

• Home improvement (18%)

• Headphones (18%)

• Video game consoles (17%)

• Books (17%)

• Shoes (17%)

• School supplies (16%)

Building Mental Blockers

To combat the impulse spending trap, it's crucial to establish mental blockers and exercise mindful control over our finances. One effective strategy is to pause before making any online purchase. A simple question like, "Do I really need this?" can serve as a powerful deterrent. Taking a moment to consider the necessity of the item can prevent many impulsive buys.

BUDGET! BUDGET! BUDGET!

Creating a budget is another essential step. By allocating specific amounts to different spending categories, including discretionary ones, you gain a clear understanding of your financial limits. Sticking to your budget becomes easier when you have a predefined framework guiding your spending habits.

The Satisfaction of Responsible Spending

Limiting impulse spending does not mean sacrificing enjoyment or indulgence entirely. It's about striking a balance between treating yourself and making prudent financial choices. By distinguishing between needs and wants, you can redirect your resources toward achieving meaningful financial goals, whether it's building an emergency fund, saving for a dream vacation, or investing for the future.

UNSUBSCRIBE

Furthermore, unsubscribing from marketing emails and promotions can significantly reduce exposure to tempting deals. By reducing the frequency of these triggers, you're less likely to succumb to impulsive purchases. Setting financial goals provides motivation and a sense of purpose to your spending habits, allowing you to focus on what truly matters.

CONCLUSION

In conclusion, mastering financial literacy in the age of online shopping is about more than just crunching numbers; it's about developing resilience against the allure of impulsive spending. By employing mental blockers, creating budgets, and setting meaningful financial goals, you can take control of your finances and make decisions that align with your long-term aspirations. Embracing responsible spending not only ensures financial security but also fosters a sense of empowerment and satisfaction, making every purchase a mindful step toward a more secure and fulfilling future.

The Most Biggest Determiner of Success: Adaptability

Gone are the days of our parents who worked at the same company for 20 years with a pensions and house, ready for retirement. As a 26-year-old who has worked/interned at over 8 different organizations and companies ranging from tech startups, healthcare, real estate, finance, and consulting, I have come to understand the importance of adaptability in today's fast-paced and dynamic work environment.

Adaptability is the ability to adjust to new situations, change course when needed, and learn new skills quickly. In today's world, where technology and business practices are constantly evolving, adaptability is a critical skill that can help you thrive in your career. Here are a few reasons why:

1. Enhances your employability As the job market becomes increasingly competitive, employers are looking for candidates who can quickly adapt to new roles and responsibilities. If you can demonstrate that you have the ability to learn quickly and adjust to new situations, you will be more likely to stand out from other applicants.

2. Increases your chances of success When you are adaptable, you are better equipped to handle unexpected challenges and changes in your job. Whether it's a new project or a change in company strategy, being able to adapt quickly can help you stay ahead of the curve and succeed in your role.

3. Allows for personal growth Working at so many different types of companies and industries has allowed me to learn new skills, work with different teams, and broaden my knowledge of different industries. By being adaptable and open to new experiences, you can expand your horizons and grow both personally and professionally.

4. Helps you stay relevant In today's fast-paced work environment, skills become outdated quickly. By being adaptable and continuously learning new skills, you can stay relevant and competitive in your field.

5. Encourages innovation Adaptability and flexibility are essential for innovation. By being open to new ideas and approaches, you can contribute to the development of new products, services, and processes in your company.

In conclusion, adaptability is a crucial skill that can help you succeed in your career and personal life. Whether you are starting a new job or taking on a new project, being adaptable can help you handle unexpected challenges, stay relevant, and grow both personally and professionally. So, if you want to thrive in today's dynamic work environment, embrace adaptability, and be open to new experiences and challenges!

Why is Home Ownership so Important?

Since the Pandemic, homeowners with mortgages saw their home equity increase by 10.8% which is equivalent to a collective $1 Trillion in gains in equity! This is approximately $17K per homeowner on average. So why all the fuss about owning a home? Here are the top 5 reason why you should look to own a home!

Great Long-term Investment

Over time, home values on average increase over time this is called home appreciation. Home prices are cyclical and thus your home may not increase very much in the short-term, but if you wait a bit, it’s very likely you’ll be able to sell it at a profit in the future. According to the Federal Reserve Bank of St. Louis, the average price of homes sold in the U.S. rose from $340,400 in Q3 2014 to $382,700 in Q3 2019, a 12.4% increase in value in five years. This is even greater than the S&P 500 on average! 

Home Equity

Home equity is the difference between what you owe on your mortgage and the value of your home. Initially, the majority of your mortgage payments will be towards interest, however as you pay your mortgage, more will be paid down for the principal. Unlike paying rent, all of your monthly payments are moving you towards owning an asset - an appreciating asset. Additionally, home equity gives you flexibility to get a loan based on the value of your home. Say you can get a home equity line at a 5% interest rate, but your investment opportunity can yield you 10% return, then you effectively have made 5% and without equity in your home, you would’ve missed out. 

Capital Gains Exclusion

Eventually you may think about selling your home. When you sell a stock normally or any other asset, you typically have to pay capital gains taxes. Depending on your income bracket, you may have to pay up to 20% of the money you profit as capital gains from selling any other asset — However, with a home the IRS allows for a tax-free profit of $250,000 for single homeowners and $500,000 for married couples (if it’s your main residence). There are a few requirements that need to be met to qualify but they are mostly to prove it’s your primary residence when you sell the home such as owning the home for the last two years, you must have lived in the home for at least 730 days (two years) during the past five years leading up to the sale, and finally a look-back requirement to make sure you haven’t profited from selling another primary residence during the two year period leading up to the sale.

Tax Deductions

Probably the most well known and potentially lucrative benefit to homeownership is the tax deductions and savings that can be realized. Once you buy a home, you can deduct the expenses of owning that home from your annual taxes. This can include mortgage interest and depreciation (Depreciation is any decline in the home's condition as it ages) — this is how Donald Trump was able to theoretically pay $750 in Federal taxes even though he’s worth billions. I would recommend consulting with a tax specialist if you have any specific questions on your particular situation as there are many more intricacies to the US tax code I have not covered.

Forced Saving/Budgeting

Once you buy a home with a mortgage, you are in a sense forced to budget and save money to not only pay down your monthly amount but also the additional costs around maintaining and even improving your house. A famous psychologist once said that the meaning of life revolves around responsibility — and I agree. There’s something special when you own a little part of this world and can call it your own. That ownership can cultivate a sense of pride and meaning many of us really crave.

Ending thoughts and risks

I want to close and say that there are certainly some risks to homeownership. Like any other investment, you can potentially incur losses and typically a home requires you to live in one place for an extended period of time. This can mean not having the flexibility to move to another city or take that job opportunity in a new state. Just like any other monumental purchase, you must do your research and seek out advice from professionals! The bottom line is in order to set yourself up for success in the future, you need to start somewhere — reading this is a great start. Look out for my next piece on the steps to Homeownership where I go over the entire process step by step as I myself have purchased one!

Why credit is so important? and How do I raise my credit score?

What is a credit score anyways? Your credit score is a measure of your likelihood of paying back borrowed money. Scores range from 300-850, and a higher score means you’re less likely to default on credit cards, loans and other expenses. Good credit is the first step to financial freedom and an integral part to building wealth in America.

Why is having a good credit score important?

1.  Good credit affects where you can live

This is probably the second most significant number to every American today, only second to your social security number. This number is what can truly change your life, not who’s elected president or who’s nominated to the Supreme Court. A good credit score can mean you’re more likely to be approved for a home loan and can affect the interest rate you get for that mortgage. This directly affects how much you can afford and thus what neighborhood and type of house you can purchase! Even if you’re not in the market for a house, you should seek to eventually! I can go into detail why homeownership is so important in another article, but homeownership has historically been the number one way to build wealth in America. (I don’t see this changing anytime soon)

2.  Credit checks for employment

Many employers check credit scores as part of their hiring process. If you haven’t demonstrated financial responsibility, an employer might be hesitant to hire you. For example, an employer may see your level of debt as too high for the salary offered. Some employers also run credit checks reports before giving promotions or raises, particularly for financially-related/executive positions. Why would they hire someone who can’t handle their own finances to manage their company’s finances?

3.  Living expenses

Want to buy a car? You probably will need a loan, for which you will need to have good credit to get a good interest rate. Need utilities? Electric companies probably will check your credit score before turning on your lights! This is not limited to just electric utilities, cable, phone, and water can and often will run credit checks too.

I understand why I need a good credit score, but how do I improve it?

Pay EVERYTHING on time – Your payment history is the largest portion of your credit score. The more on-time payments you have, the better. This includes, utility bills, rent, student loans, phone bill, etc. Turn-on auto-pay if you need (I do this!), add notifications on your calendar (I’ve done this too!), by any means necessary – do not miss any payments! If you’re behind, catch up as quickly as possible. Make the necessary sacrifices to save more, you won’t regret it.

Keep your credit card usage low – By keeping your credit card balance below 20% of your credit limit, you can slowly increase your credit score! For example, if your credit card limit is $5,000, you would want to stay below $1,000 per period. People with credit scores above 800 on average utilize 11.5% of their total credit according to Experian. If you are spending more than this, there are two avenues I would recommend, apply for a line of credit increase and/or apply for another credit card (What credit cards do I have?).

Avoid checking your credit – Every time you check your credit, a record is made on your credit report. This accounts for approximately 10% of your credit score, which may not seem like much but can mean the difference between getting a home loan vs not.

Time is your friend – If you do have late payments or other negative items on your credit report, don’t worry. Most of these items will fall off your credit report after seven years. Consistency is key, it’s never too late to start improving your credit score! If there is a mistake on your report, make sure to clear them up right away.

Ultimately, your credit score can have the most influence on your ability to live a comfortable and fulfilling life. It’s important to understand why it is important, how it’s calculated and how you can improve it! As a recent college grad, I understand the struggle many people my age are going through during these unprecedented times. I hope that I can help reduce the knowledge gap surrounding personal finance and do my part to making the world a better place. Let me know your thoughts and concerns!

Guest Interview on Jaytalking: Views from the Sidewalk by Jay Brown

Casual conversation with my College friend, Jay Brown! We discuss Covid-19, relationships, life, love, parenting, ethics, etc.

Listen to this episode from Jaytalking: Views from the Sidewalk on Spotify. In this episode, Jay and his friend Michael discuss being calm in some of the most testing situations as well as if spanking children is truly the best way to discipline children.

Best Savings Account

A high-yield savings account is an excellent option for those who want to earn more interest on their savings without taking on additional risks. These accounts typically offer higher interest rates than traditional savings accounts and are FDIC-insured, providing peace of mind for account holders. Nerdwallet has a most up to date view of their best savings accounts which can give you some comparisons.

When choosing a high-yield savings account, it's important to consider the interest rate, fees, minimum deposit requirements, and other features like customer service and mobile app functionality.

My personal choice is Marcus by Goldman. Because I invest in real estate, and that requires having a significant amount of cash on hand, the high yield savings account allows me to reduce the effect of inflation but also have the security and liquidity benefits I need.

If you found this useful and would like to use Marcus, please join with my referral link: https://www.marcus.com/share/MIC-KHN-9H2V gives both you and I, up to a 1.00% APY increase!

Finance Job Recruiting Advice

Ever since freshman year of college, the priority for any student is to not only succeed in school academically but also to obtain that coveted summer internship to start developing my own work experience. I have worked for Emory’s Goizueta Business School’s career center for a year, landed an internship at JP Morgan, after graduation, I worked full time in FP&A (financial planning and analysis) for a mid-sized tech company, Agilysys. Currently, I work for Bloomberg LP as a data analyst where I specialize in equity fundamentals. Here are some key tips I would give to anyone who wants to land an internship or job in finance based on the year you are in school.

Freshman/Sophomore Years: Gaining Experience

As a freshman/sophomore, you have just gotten into your school and are still trying to figure out what you want to major or do. Summer internships or work can be a great time to explore your career options and companies. What I would say is as an underclassman there’s very little pressure on you to get a very top brand named internship at a JP Morgan, Goldman Sachs, etc. Your priority is to utilize your network, your school’s network, or just online applications through Indeed or LinkedIn to get experience. Any experience is good in reality. I personally worked for a start-up health tech company and got a $500 stipend for the 3 months doing research and web development.

My freshman year internship actually led me to gain connections to my sophomore year internship at a company in the same building which was a non-profit real estate business. As for salaries, I made something like $2/hour pro rata freshman year and $15/hour my sophomore year. What I would recommend is not focusing on pay but about gaining experience!

Junior Year: Connections and Name Brand

Junior year is the big one, and arguably the most important summer because it’s your foundation to which you build on for your post graduate job. Here is where I would recommend you apply everywhere. Don’t limit yourself because of your major or what you think you should do/apply to. Here is where I would say that name brand can be useful and something you may want to strive for because the reputation they provide can give you validation or an upper hand when looking for full time employment. This is because many of these larger firms offer extensive training programs and networks which can open doors for you which you probably wouldn’t have exposure to otherwise.

My junior year, I interned at JP Morgan’s Private Bank. I applied through their online application around September and received a call about one month later. After the initial phone screening, I was invited to the Super day (in-person interview) in November and ultimately received the offer in December. The Super day comprised of two back-to-back interviews with two senior level managers. If you’d like me to go into more detail about the interview process feel free to reach out!

Ultimately, your junior year internship is a vital stepping stone to establishing your credentials and arguably the most important thing recruiters look for your senior year! Finance recruiting in particular has been starting earlier and earlier with many postings starting during the summer a full year prior! This means you have to be on top of your stuff with a polished resume and cover letter, both of which should be one page maximum. If you would like specific resume help or cover letter help, (active voice, word choice, networking, etc) again feel free to reach out!

Senior Year

Senior year is the culmination of all the work and experience you’ve accumulated the past three years. Again, we want to utilize our own social networks as well as alumni and past internship networks to get our foot in the door. Ultimately the difference between full time recruitment and an internship is the commitment which the firm undertakes. If they hire the wrong intern, they only have to live with that bad decision for three months but with a full time employee, it’s a much longer time period since analyst positions are typically three years long. This means that full time recruiting has its own unique challenges compared to internship recruiting. When thinking about full time recruiting, you have to leverage all the experience you have. Additionally, being flexible on pay, location and job function can drastically impact your hire-ability. Think about it this way, would you as an employer rather hire the local candidate who you don’t need to spend money on to fly in and interview and can start asap, or the candidate 500 miles away which you need to fly in and then potentially deal with moving and travel issues? Finally, once you get your offer letter, make sure you negotiate your salary and benefits!

Finally, if you found any of this information useful please leave a like or comment! Additionally, feel free to contact me if you need clarification or additional help!

Investing 102: Leaving the Nest

In my previous post below I briefly outlined some of the tips and knowledge I had picked up since graduating from college. It has slowly begun to dawn on me that I will be entering adulthood and moving out of my parents’ house which I have lived for the past 22 years of my life. This means that I am am currently in the process of strategically laying out my short term future and establishing my foundation as an independent human being.

Finding my own Apartment

My journey for finding a place to work has been strenuous especially since I graduated in early May. Fortunately I utilized my own personal network and I was able to land an amazing job as a financial analyst for a mid sized company in Alpharetta. Finding a suitable apartment to live in Atlanta has been interesting because I want to live a nice location but also be relatively close to work and have access to the city and Buckhead areas. Alpharetta is about 30 minutes outside of Atlanta given traffic, and I have budgeted around $1000 per month for rent and other living expenses.

Getting my own Credit Card

I have had two credit cards since my freshman year of college. These two cards are the Chase Freedom and Discover IT cards. I would definitely recommend these cards for anyone looking for their first credit cards to get since they both require no monthly fees. However, because I am moving out, I want to be fully independent from my family and thus it’s essential that I get my own credit card. Because I am moving to Atlanta and Bank of America has the largest presence in Atlanta, I will be getting the BoA Cash Rewards Card. This card offers many great perks like $200 cash back after I spend $500 within the first 3 months and 3% back on gas, 2% back on restaurants, and 1% on everything else. In addition, they offer 10% back on any cash back redeemed into a BoA checking or savings account. I would recommend limiting the number of credit cards you have to a max of 3.

Familiarizing myself with my company’s retirement packages

My company offers both 401k and Roth IRA retirement accounts. They do offer a matching up to the average 6% of my salary which is good. My eye is on the Roth 401k account which has a max of $19,000 + $5,000 catch-up annual contribution. Additionally, they have a free financial advising service which I plan to utilize asap and I would encourage you to contact your company as well!

Savings Account

I have been recently researching other possible sources of income and I realized that my savings account could be more efficient. I like Ally Bank because they currently as of June 20, 2019 2.20% interest for their savings account with 0 fees! This is amazing considering the current 10 year treasury yield is a 2.013%.

Where do I Invest?

Three words: Exchange-Traded Funds (ETF). What is an ETF you ask? An ETF is a fund or investment instrument which can be traded and holds a set of assets (typically companies). The most common type of ETF is one which tracks the S&P 500. Essentially these funds hold shares of the top 500 largest US companies by market capitalization or size. This means the fund will hold more of Apple than another smaller firm. Because the market has become so efficient recently with the readily available investment information and high speed technical and algorithmic trading, it is incredibly hard for even the best fund managers to beat the market returns over a long period of time.

This has meant that these ETFs have been the investment instrument of choice for many of the world’s wealthiest people. Someone just graduating from college, like myself, has the unique advantage of time to grow this investment. Personally, I would recommend Vanguard’s funds which offer the lowest expense ratios on the market. For example, VOO one of Vanguard’s ETF funds offers just a 0.02% management fee which means more money in my pocket. In addition to checking for the lowest management fee you can find, it’s important to look at the total managed assets which gives you an idea about the liquidity of the fund. In rare cases where you need to pull your money out, liquidity is very important. The more total assets managed, the more liquid the fund and the better your chances are for getting your money out.

Investing 101: Right out of College

1. Why should you invest NOW?

Amount required to invest annually to have $1 Million by age 65

If you start investing with just $3,100 per year at age 22, assuming an 8% average annual return, you'll have $1 million at age 65. But if you wait until age 32 (just 10 years later), you'll have to save $6,900 per year to reach that same goal of $1 million at age 65. This is over double the annual investment required. Think about it this way, if you wait 10 years to start investing, it’s going to cost you $3,800 more per year! This is the power of compounding.

2. Understand your financial situation

Where are you living? Are you in a high tax state like New York or are you living in Texas and Florida where there’s no state income tax? What’s the cost of living for you? Understand your current and expected cash flow and always reserve a little cash for unexpected expenses. Budgeting is key. What are you spending everything month, now compare that with what you’re making every month. Investing will NOT solve your spending problems or debt problems. If you have to payoff student loans that’s an expense you must consider.

3. 401ks, IRAs and Roth IRAs

Accept your employer’s generosity! Most employers offer a 401k or 403b retirement plan. These are company sponsored plans, which typically means whatever you contribute up to the maximum $19,000 (under age 50) or up to a certain percentage of the employee’s income (typically 4%). The major benefit of these savings accounts besides the free money is the tax benefits (You don’t pay annual taxes on your retirement accounts).

Let’s discuss traditional IRA vs Roth IRA

Traditional IRA accounts use pre-tax money to save for retirement (you get the tax deduction today). Roth IRAs use after-tax money. In retirement, you'll pay taxes on your traditional IRA withdrawals, but you can withdraw from the Roth IRA tax free. This is why many financial planners love a Roth IRA. In 2018, the maximum contribution limit for IRAs is $5,500. You should focus on contributing the maximum every year.

4. Invest in yourself!

You are your biggest asset. You can increase your own earning potential drastically by going to college, getting a certification, or attending career development events. In investing just like in life, it’s important to diversify. This means diversifying your income. If all the money you make is from your job, then you will be at risk if you lose it. By having multiple streams of income helps you spread out this risk and help you live stress free.

5. Ignore social media as much as possible

Take what you see on social media with a grain of salt. All of those stories of people going on trips and buying extravagant cars are very short term and over the long run, if you save properly, you can go to that trip to Europe or buy that Ferrari (experiential purchases in general are often better than cars which are not great investments because they’re depreciating assets- it’s smarter to go with a secondhand car but make sure you do your research)

6. Bucket your goals into short term and long term:

Once you have an idea for your short term goals are (buying a car or a vacation) and long term goals (buying a house), you need to find a good place to save that money. Good places to put your short term goals: bank CDs, savings accounts, and money market funds. There are many alternative options to a traditional savings account or checking account which can give you +2% returns annually! Each offer their own advantages and drawbacks so make sure you do your research. If you would like me to go into them more like this post and/or send me a direct message on LinkedIn or Instagram!

I hope this helps many of you who maybe are in a similar stage in life as I am. Graduating from college and entering the real world can be scary, investing shouldn’t be. Feel free to message me on LinkedIn or Instagram if you want to know more.

Should the NCAA Pay Players?

Every year, in the month of March thousands of Americans are glued in front of their televisions watching colleges battle in a tournament to determine who is best team in the nation. Fans frantically fill out brackets, looking at stats and deciphering players to best predict the results of the tournament when too often those who fill out a bracket based on mascot colors take all the winnings. But what you do not see on the surface is that this multibillion dollar industry is run on student-athletes who do not get a penny of those earnings. Not only has this “dance” gotten out of hand, but also the underlying system behind it, the NCAA. When the NCAA was formed in December 1905, the clear policy was that the student athletes were to be amateurs— that meant "any inducements" to attend a school based on their athletic skills were prohibited. There was no ambiguity that this policy did not allow scholarships based on athletic prowess. The issue at hand, then, is not whether or not college athletes should be paid per se, but rather whether they are compensated fairly.

Duke Freshmen: Zion Williamson and RJ Barrett

March madness brings in over $1 billion of TV advertising revenue alone, which is nearly more than the entire NFL postseason combined and accounts for approximately 90% of the NCAA’s total season revenue (Parker). One of the most important revenue streams are the broadcast rights. In 2010 the NCAA signed a 14-year, $10.8 billion contract with CBS Sports and Turner Broadcasting. The deal was extended in April 2016 for a combined total rights fee of $8.8 billion that will keep the tournament on the networks until 2032. Last year, 68 teams earned an invitation to play in the tournament. Each of those team’s conferences will get a piece of a $220 million pot of money. For each game a team plays, its conference gets a payout, spread over six years. For playing one game the team’s conference gets roughly $1.7 million. If a team makes it all the way to the final game, it can earn as many as five units, totaling $8.3 million. If a team makes the final game from the first-four bracket, it could earn a total of six units. It is apparent that many teams are making a lot of money yet the people actually creating the product, the players, aren’t seeing any of that. Why?

Coach Majerus and Andre Miller

According to the NCAA, the players are student-athletes, not employees. They claim that these student-athletes are “amateurs” and must sign and abide by a 400 page book of rules. One clause states: “We own the likeness of your image forever and throughout the universe.” To put it simply, the NCAA rules prevent college athletes from being compensated in any way connected with their sport other than a limited athletic scholarship. They cannot even accept textbooks, a bag of groceries or a trip home to see their parents. Nor are they allowed to access the free market for their own promotional and marketing deals. Take a case where Rick Majerus, a college basketball coach formerly at Utah, had a player who just lost his parents (Berkowitz). He then proceeded to have lunch with the player and then send him on a plane home to see his family. The NCAA said that this act was a violation because it was giving an athlete something you wouldn't give another student. It is obvious that the NCAA doesn’t want students to receive any monetary compensation, but why?

Texas A&M Quarterback: Johnny Manziel brought his school a wave of media exposure that was worth an estimated $37 million in just a three month period

The NCAA persists that its players are “amateurs” and that paying players would result in the loss for the purity of sports and competition. It is true that paying players to play, would cause many to play for the money instead of for the love of the game. For years, the NCAA and its defenders have argued the player compensation ban is necessary to preserve the amateur nature of college sports and the educational mission of the NCAA and its member universities. Once that system is broken they claim that college sports will never be the same. Unfortunately bribery already exists in the system and students have trouble focusing on their academics and their athletics. A major example of this occurred with the Louisville head coach Rick Pitino where many prospects were bribed to attend. The only major difference between pro football and college football, besides a few rule changes, is that pros are paid and college athletes are not. If you had no idea what football was and saw two games, one NCAA game and one NFL game, you would probably say they were the same games played by different teams. You would see the same advertising, extensive coaching and training staff, interviews, etc. These students bring tremendous amount of revenue and play the game just like pro players but aren’t compensated enough for it.

The NCAA is a multibillion dollar monopoly where you don’t have to pay those who create the product anything. People always ask if we were to pay athletes, where this money would come from subsequently say that schools could not afford it. It is true that most schools do not make a profit, but profit means money earned after expenses are paid. Many schools find clever ways to find expenses to include to maintain a nonprofit. There is a reason why the top ten largest football stadiums in the US are owned by colleges and universities. The University of Michigan even claimed that on game days their stadium is the fourth largest city in the state! Additionally, 39 of the 50 states in the US have coaches as the highest paid state employees (Gibson). The average college football coaches salary is over $1 millions a year, compared to the student-athlete who is struggling through school, and whose family is struggling too (Gibson). It seems absurd to call a $6 billion industry one for “amateurs”.

With all that said, the NCAA believes that their players are given a great opportunity to study at the great universities in the United States, right? Not so fast. The NCAA inflates graduation rates by comparing student athletes, who are by definition “full-time students”, to a broad student body consisting of both full-time and part-time students. For instance, the NCAA uses a six-year measurement that adjusts for athletes who leave universities “in good academic standing," however part-time students are more likely to take longer than six years to graduate. Research from the Collegiate Sports Research Institute at the University of South Carolina found that between 2006-2012, Division 1 football players graduated at a rate 18 percent lower than their peers; men's basketball players at a rate 20 percent lower; and women's basketball players at 9 percent lower (Nusbaum). Of the 80-90 percent that do graduate, many students have taken classes that have very little value or finish with degrees in areas that won’t help them get work. According to the NCAA documentary: The Business of Amateurs, the University of North Carolina for years had so called “paper classes” in African American studies that would boost a student athlete’s grade point average during the summer. Many students-athletes would also be enrolled in Swahili, and during an interview with HBO Real Sports admitted to neither having a use for it nor could they even speak any Swahili. This is probably one of the major issues which they would learn about in one of their African American studies courses.

Ultimately however, an education is only useful if you can actually attend the university, where you don’t get injured and lose your scholarship, or that you actually have time to study. In sports, there is tremendous amounts of risk. Any hit by a 200 lb plus grown man while returning a punt, or driving to the hoop could mean injury. Injury in this type of industry could be just sitting out for a game or worse a loss of scholarships. It has been revealed that when Walter Byers took over the NCAA in 1951 as Executive Director, he coined the term “student-athlete” to specifically to avoid workers’ compensation for injuries, now over sixty years later it is still working. Last year alone there were approximately 21,000 football related injuries, of which 800 were serious spinal injuries (Solomon). Take Kyle Hardrick who had received a scholarship from the University of Oklahoma but after tearing his lateral meniscus, he lost his scholarship and was left to pay $10,000 while his insurance covered $20,000. He eventually was unable to attend that university because of all the bills and dropped out. The university that had claimed to be giving Kyle an education for his play all of sudden retreated because they had squeezed out everything they could from Kyle and were moving on. To say that these players who risk their careers every single day they step onto the field, court or ice like Kyle are currently fully compensated is just ridiculous.

In the end, the NCAA is a multibillion dollar industry which is in a very unique situation where their primary “amateur” labor force does not see any of the monetary gain and compensation. I am not saying we need to pay these athletes millions of dollars or to pay all of them, but to pay everybody nothing just is wrong. Often times, we see the end product whether it be college or pro and enjoy what we see but ignore the intricacies behind it. In reality, only 1.6% of College football athletes and 1.2% of Men’s Basketball athletes become pro athletes. Unfortunately for the rest of the 98%, they walk into the job market with their six African American studies and Swahili credits and if they’re lucky, no student or medical bills. Even as many dreams are crushed and made during the Madness of March, the greatest loss is that of reality. Reality that the multibillion dollar business takes 100% of all the revenue and that the players whose labor produces all the money get nearly none. Not to say March Madness is only evil, but one must step back and consider the big picture and ask, is this fair?

References:

“Amateurism." NCAA Home Page. NCAA, 25 Nov. 2013. Web. 20 Apr. 2015.

Berkowitz, Steve, Jodi Upton, and Christopher Schnaars. "USA TODAY Sports." USA TODAY Sports. USA Today, 2014.

"Crossfire: Should College Athletes Be Paid?" YouTube. YouTube, 20 Mar. 2014. Web.

Gibson, Charlotte. “Who Gets Paid More, Your College Coach or Your Governor?” ESPN, ESPN Internet Ventures, 20 Mar. 2018, www.espn.com/espn/feature/story/_/id/22454170/highest-paid-state-employees-include-ncaa-coaches-nick-saban-john-calipari-dabo-swinney-bill-self-bob-huggins.

Gumbel, Bryant. "Real Sports with Bryant Gumbel”. HBO. Home Box Office, n.d. Web.

Nusbaum, Eric. “The NCAA's Exploitation of Student Athletes Would Make Fidel Castro Proud.” The New Republic, 18 Mar. 2014, newrepublic.com/article/117059/ncaa-student-athletes-are-exploited-much-amateurs-cuba.

Parker, Tim. “What Does the NCAA Really Net from March Madness?” Investopedia, Investopedia, 21 Oct. 2018, www.investopedia.com/articles/investing/031516/how-much-does- ncaa-make-march-madness.asp.

Solomon, Jon."College Athletes' Rights: NCAA Requires Health Insurance, but Schools Decide What to Pay." Alabama Today. Alabama Media Group, 19 Feb. 2012. Web. 29 Apr. 2015.

The US Dollar and Debt Crisis

Image depicts a bald eagle frantically holding up the American flag above the chaos below symbolizes not only the immense power the US has but also how the vast numbers of enemies there are below.

Our national debt stands at a whopping $21 Trillion. With the majority incurred during the most recent administrations. Mark Twain once said: “History doesn’t repeat itself, but it often rhymes." We have seen in the past when the government tries to control money, wages and the economy as a whole, it results in disaster. In addition to this, the current geopolitical position the United States is in is very precarious. I foresee a dramatic shift incoming which will take the world by storm.

Firstly, let’s examine how and why the US has positioned itself in the way it has currently. The US like any other nation has an obligation to lookout for its own self interests. In the president’s oath it is stated: “to the best of my ability, preserve, protect and defend the Constitution of the United States.” This obligation to “preserve”, “protect” and “defend” has often resulted in a more active and hands on approach to its currency and the world economy by any means necessary. Often times meddling in areas where our arrogance and generalizations have led to the splitting of the Korean peninsula, the of South America and the debacle in the Middle East all in the name of “Freedom”. This is why I believe that the US dollar’s status and strength are the end all be all for the US. The US will do everything and anything to maintain the dollar, even declare war when Iraq tried to sell oil in Euros. The world has begun to take notice.

We have seen from history that the fall of empires such as the Roman Empire are linked to problems with the financials of that nation. The Roman Empire’s decline could be attributed to the excessive war spending, currency debasement, public works spending, and excessive taxation. The beginning of the US’s influence and overstep of power was during the Nixon Administration when the US went away from the Bretton Woods gold standard. It has always been understood that the US Dollar would the world’s reserve currency since it could be exchanged at a fixed rate with something valuable with a fixed supply like gold. Julius Paulus once said about currency: “this device being officially promulgated, circulates and maintains its purchasing power not so much from its substance, as from its quantity”.  What we saw immediately after the US went away from Bretton Woods, was ridiculous amounts of inflation and a fragile economy. Nixon attempted to fix prices on consumer goods and wages to remedy the problem. However, the US was clever. They knew that if they were printing a lie, it had to be a good one. The way to achieve that was to create as liquid of a lie as possible. The US knew that to maintain its power over the world would be to control the world’s economy. However, they knew that just simply printing money would devalue the dollar, so to combat that they needed power over something worth just as much as gold: black gold or oil. In order to accomplish this, they utilized their massive military force, strategic alliance with Saudi Arabia, and control over the currency used to trade oil.

Currently, a few countries have realized the crux of the US’s strength is the dollar. With the current trade wars, US and China relations are very weak. China sees how the US’s power over oil trade is correlated to their power across the globe and has actively taken steps to create another market to trade oil with other currencies. Russia’s Putin said in an interview that he intends to move to independence from the dollar because of sanctions against them which limits Russia in trade. Japan and India are also considering moving away from the US dollar. With the economy slowing down, this might be the perfect catalyst to sway more counties to move away from the US dollar and sell US bonds. China has already sold $3 billion of sovereign dollar bonds. China still holds over $1 Trillion worth of US bonds making them the largest foreign holder of US debt. I do not see these conflicts globally resolving themselves anytime soon. Humans are procrastinators and lazy. It often takes a catastrophic event to wake people up from their naps.

Some questions I have you are: US bonds were recently reduced from their AAA rating to AA+, yet US bonds are considered a “risk free” asset, how is it possible for a “risk free” asset be downgraded? Do you think that the US debt is a problem? If so, how high must it go before decisive action will be taken to reduce it?