Student Loan Forgiveness: A Primer

Millions of U.S. college graduates have begun their careers with a crushing student loan debt balance. In fact, 40 million Americans owe more than $1.7 trillion in total loan debt. This equates to more than 50% of students graduating with significant debt. The overwhelming majority of this student debt is federal student loans, with the remaining amount owed to private lenders.

Several existing programs lessen the burden of student loans but require decades of repayment. The Public Service Loan Forgiveness (PSLF) program was created to provide relief and attract students into public service careers. It allows borrowers who make ten years of loan payments to have the remaining outstanding balance forgiven.

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Is it Time for an Umbrella Policy?

Increasing the personal liability coverage limits on your auto and homeowners insurance as your income grows is a smart move. But there are limits to how much personal liability insurers will cover as a part of these asset-specific policies. That’s where an umbrella policy comes in.

This type of policy protects your current assets and your future income against financial claims for injury brought against the policyholder – and their family or household members. It isn’t a standalone policy; it provides excess coverage in addition to other existing policies, and only kicks in when the underlying policy limits are exhausted. Because of this, it can be more affordable than you think.

Umbrella policies can be flexible and can be written to include many types of coverage, which makes them uniquely useful for modern, active, online lives.

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Should a Trust Be Part of Your Estate Plan?

Trusts used to be seen as an estate planning tool for only the very wealthy, who have complicated family situations to sort out, and high-value assets to protect.

Times have changed. Modern lives are complicated, asset values are high, and good estate planning is for everyone.

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GMB Ep #148: Using Entrepreneurship For Good With AnnMaria De Mars

Entrepreneurship is one of the best ways to change the world around us, and there’s a lot to learn from entrepreneurs who are building businesses that solve problems that exist in their communities. This week on Grow Money Business we’re joined by AnnMaria De Mars, the founder and president of 7 Generation Games, an educational software company that focuses on creating video games to teach math to kids and students. Throughout the episode, we dive into AnnMaria’s journey and how she’s using entrepreneurship to create a positive impact on the world.

Show Notes

[02:30] From Academics to Entrepreneurship – AnnMaria shares how her interest in mathematics helped her evolve into a serial entrepreneur.

[11:22] Video Games – AnnMaria explains what led her to start her venture in creating video games to teach mathematics.

[19:31] Solving Problems – AnnMaria shares what motivated her to develop businesses in a way that solves problems and helps people in rural communities.

[24:32] Building the Business – AnnMaria discusses how she gathered the required funding and other resources to build her business.

[28:38] Current Progress –AnnMaria describes her organization’s current performance, growth, and plans for the future.

[34:43] Sports – AnnMaria is a national champion in Judo. We talk about how she got into Judo and the profound impact of sports on her life and the lives of her children.

[46:31] Business and Life –AnnMaria explains how her risk tolerance evolved with her personal priorities.

[51:22] Fundraising for Startups – AnnMaria shares some of the ways startups can raise money with the help of people in a community.

Resources

GMB Ep #147: Expanding Your Estate to Other Countries with Mikkel Thorup

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If you’re interested in the advantages of foreign diversification for asset preservation and estate planning, then this is the conversation for you. This week’s guest on the show is Mikkel Thorup, the CEO of Expat Money™, a consulting advisory organization that assists individuals with foreign asset diversification. Mikkel assists clients in relocating their wealth out of the United States by helping them establish offshore trusts and foundations and facilitating foreign investments. In this episode, we explore how you can expand your estate beyond your home country’s limits.

Show Notes

[02:34] Background – Mikkel summarizes his journey thus far by discussing his work, his clientele, and the source of his exposure to the industry in which he currently works.

[15:37] Asset Protection – Mikkel goes over the basics of asset protection, including what it is and how it operates.

[21:12] Trust vs. Foundation – Mikkel discusses trusts and foundations, as well as how his consulting firm helps its clients with these types of frameworks.

[26:46] Be Aware – Cross-border issues and scammers are a perennial concern in modern society. Mikkel outlines where people go wrong, what mistakes might be made, and what must occur to move assets overseas.

[32:28] Residency vs. Citizenship – Mikkel offers a comprehensive breakdown of the concepts of citizenship and residence in a foreign country.

[39:36] Opportunities – Mikkel explains his overall philosophy and strategy, as well as the process by which he sources opportunities for clients.

[43:35] Selections – Mikkel outlines how he decides which jurisdictions to work on or within.

Resources

A Disability Insurance Primer

Should you have disability insurance?

A sobering statistic from the Social Security Administration (SSA) might be helpful: the SSA reports that a 20-year-old has a more than one-in-four chance of becoming disabled before reaching retirement. Social Security Disability Insurance (SSDI) is part of the social security tax you pay each year that you work. But it is difficult to qualify for, and even the SSA describes the payouts as “modest.”

Many employers cover some amount of short-term disability, but longer periods or a permanent disability typically require additional coverage. If you are self-employed or a professional with specialized training or education, such as a doctor or lawyer, getting the right disability insurance in place should be a part of our overall risk management plan.

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Do You Need a Budget in Retirement?

You saved diligently, invested carefully, and now you have a sizable nest egg that can most likely replace 80% of your pre-retirement income. Why should you go through the tiresome process of creating a budget?

No matter how carefully you plan, many things are out of your control that can impact the income your plan can provide:

Market volatility
Extended market downturns
Increased taxes
High inflation

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September Market Commentary: If the Fed Is Having a Goldilocks Moment, Is the Economy Baby Bear?

August Recap and September Outlook

After the bear market rally in July was extended for the first few weeks of August, Federal Reserve Chairman Powell used the Fed’s annual Jackson Hole symposium to clarify the Fed’s position on future rate increases.

Powell was clear that there would be no “Fed Pivot” until improvements in the inflation rate are sustained.

He acknowledged the costs of reducing inflation. Slower growth, higher interest rates for consumer loans, and a softer labor market are all part of the ongoing reality.

The Fed’s priority is to avoid entrenched consumer expectations of higher inflation, which partly caused the runaway inflation of the 1970s. The Fed needs to act decisively to bring inflation down quickly, which Powell described as a “forceful and rapid” approach to rate increases.

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GMB Ep #146: Here’s What Happened During the Meme Stock Rally of 2021

You may recall that at the beginning of 2021, the stock prices of AMC and GameStop skyrocketed. There were numerous news articles about people driving up the prices of companies that were not otherwise exceptionally profitable investments. This week on the podcast, Grant dives deep into what caused the Meme Stock Rally of 2021, as well as the importance of investing our portfolios as prudent, long-term investors.

Show Notes

[03:20] Meme Stock Rally – Grant recalls the events that transpired during the 2021 Meme Stock Rally involving AMC and GameStop.

[10:41] Two Options – Grant explains how short-selling stocks and the options market are the two most common ways to wager against a company.

[21:05] Changes – Grant outlines in broad terms how AMC and GameStop have changed as a result of this chain of events.

[26:22] Research – Grant presents the conclusions of the in-depth research that was conducted on the Meme Stock Rally at both the SEC and Harvard.

[34:30] Lessons – Grant explains how the Meme Stock Rally serves as an excellent lesson on time horizon and irrationality, illustrating how wise investors should consider investing in their portfolios.

Resources

Did Pandemic Stimulus Funds Spur the Rise of ‘Meme Stocks’?: hbswk.hbs.edu/item/did-pandemic-stimulus-funds-spur-the-rise-of-meme-stocks

How AMC rode the meme stock rally to revitalize its business: cnbc.com/2022/01/26/how-amc-rode-the-meme-stock-rally-to-revitalize-its-business.html

Robinhood almost imploded during the GameStop meme stock chaos: techcrunch.com/2022/06/27/robinhood-report-meme-stock-gamestop/

Robinhood and CNBC’s Jim Cramer fuel stocks for “stimmy” rally: cbsnews.com/news/robinhood-jim-cramer-stimulus-stock-market/

Stock Market Stimulus: hbs.edu/faculty/Pages/item.aspx?num=62111

GMB Ep #145: Everything You Need to Know About Biden’s Student Debt Forgiveness

Last week, President Joe Biden announced a new student loan relief program that promises to cancel $10,000 of student debt for low- to middle-income borrowers. Since then, this topic has become somewhat controversial and has ignited a fair amount of debate online. This week on the podcast, Grant dives into the provisions of this new student loan relief program, eligibility criteria, and some of the planning opportunities that have emerged from the program.

Show Notes

[03:31] Background – Grant shares the details of President Biden’s new executive action and why it’s considered controversial.

[06:35] Qualified Loans – Grant explains the types of loans that are qualified under the provisions of the student loan forgiveness program.

[08:42] Income – Income is the most prominent factor that determines eligibility for loan forgiveness. Grant breaks down the numbers of the income levels that qualify for this program.

[14:05] Income-driven Payments – Grant shares his thoughts on the differences between income-driven payment programs that were introduced earlier and President Biden’s new program.

[20:00] Planning Opportunities – Grant discusses some of the tax planning opportunities that may allow you to qualify for the new loan forgiveness program.

[29:58] Earlier Programs – Grant shares some highlights of the provisions that were included in the income-driven payment programs that were introduced earlier.

[35:00] Enrolling in a New Program – Grant shares his take on the pros and cons of enrolling in a new income-driven repayment program.