The genius of the 529 Plan

You'd do anything for your child. And you want your child to have the brightest future imaginable. You probably also know that a college education is more important than ever for a successful financial future. The income disparity between college grads and non-college grads continues to grow, and many jobs that do not require a college education have gone overseas or been replaced by a computer or machine. But it's not cheap - college costs generally inflate at twice the rate of all the other goods and services we pay for.

So what can you do now, to ensure your child has that important college education?

The very best idea is to start saving early, while your children are still young. And as your trusted Mortgage Planner, I can help you look at strategies that will help get that college account kick-started or even completely funded right away. Saving for it may seem overwhelming...yet it doesn't need to be. Here's a game plan to help make sure your college savings plans are right on track.

First, talk with a qualified financial planner about a 529 college savings plan - I would be happy to make a referral if you do not have a great financial planner that you work with presently. 529 plans are offered in most states, allow for gifts from parents and grandparents, and the money invested grows tax-free until withdrawn.

When the time comes to start making withdrawals for college, the growth is then taxed to the student, not to you, the investor - and the benefit is that the student will likely have a much lower tax bracket than you. And here's an interesting idea - when researching 529 plans, be sure to ask your financial planner about investing funds in other states 529 plans. Shop around, as many states provide higher yields - and even if the money is invested in another state's 529 plan, it does not limit where the child can go to college. These accounts can be used to fund any accredited college and most likely, even a graduate school.

Another creative idea is a "pre-paid tuition" plan. Pre-paid tuition plans allow individuals to lock in future college costs at today's prices and are designed to increase in value at the same rate as tuition inflation. For example, if a parent wanted to invest in a newborn's college fund today and pre-pay the entire cost based on today's cost, the fund is guaranteed to cover the cost of college 18 years from now when the child is ready for college. Or if the investment is enough to cover only half of the education, the fund guarantees to cover half of the tuition costs at that time. The plan does have some restrictions, so be sure to research this option carefully with your financial planner before making the investment.

Student loans are also an option, but watch carefully what rates you are paying and shop around. Student loans can be very costly and many have limits as to what a child or parent can borrow. For example, a Stafford loan will only lend a maximum loan amount of $3,500 to a freshman and $5,500 to a senior ... but with the average public in state college costing nearly $13,000 per year, the difference may have to come from a private loan, these rates can range from 7.25% - 18.00%.

A far better alternative may be a home equity line of credit, or even a refinance of your first mortgage. The interest rate will likely be cheaper, and may even be tax deductible. Even with the recent climb in interest rates; exploring your options is important to ensure you are making the best financial decision for your child's education.

For more information about the above options simply click on the following link: www.savingforcollege.com - and if you want to discuss planning for college further, please contact me. We'll look at your situation, decide if a mortgage strategy could work for you, and consult with a great Financial Planner to help put all the pieces together.

Not to be an alarmist ...

Did you know that home security systems may actually attract burglars? Shocking, but true.


Each year, Americans spend more than $18 Billion on professional alarm systems. Unfortunately, according to security consultant Walter Shaw, some of those systems may actually be attracting burglars. Shaw, a former burglar, contends that when thieves see a house with a security system sign on it, they know it typically means that the house actually has something of value inside...which makes it a better target for them to consider breaking into.

In addition, Shaw notes that determined thieves can actually use those security system signs to their advantage. First, if the sign displays the name of the alarm system company, a thief may be able to use that information to research the system and figure out how to bypass it. Second, thieves may decide to test the system. By tripping the alarm on purpose, burglars can gain a better idea of how long they'll have to get in and get out before the police arrive!

So do alarm systems help at all?

The answer, thankfully, is YES! A recent study indicated that alarm systems are still the single most effective way to reduce the risk of burglary. Interestingly, some preventive measures such as deadbolts do little to dissuade burglars, since these measures cannot be seen until a burglar has already chosen a house...at which point they tend to pursue it and find a way in, regardless of the deadbolts.

Here's how to best protect your home.

First, make sure any alarm signs posted on or around your home are generic - without the name of the security company. In addition, you might want to consider adding security cameras-or even fake cameras-around your entrances and windows. No thief wants to be caught on tape...even if they're wearing a mask. Also, make sure that bushes and branches are cleared away from windows and entrances.

Stuck in the middle with you...

Those infamous cell phone contracts can make anyone feel like they are stuck for life, caught in a nasty web of legal jargon with no way out. And with many service providers offering tasty incentives coupled with better than ever low price calling plans, it is no wonder that many people want to jump ship from one provider and start sailing with a new one. But with pricey early termination fees that can easily be up to $250 or more, customers are virtually held hostage, locked up in contracts that sometimes last for years.

But now - there may be a solution that sets you free!

Rather than waiting for a contract to expire, there's a new alternative that allows cell phone customers to avoid the early termination fee and keep their cell phone numbers. Here's how it works.

You can actually sell the balance of your cell phone contract to someone else who wishes to take it over...and more people are opting to do this every single day. As the seller, you get out of your contract with no termination fees and are free to move on. The buyer of your contract gets a short term cell phone plan with no activation fee! In some cases, the seller sweetens the pot further by throwing in their existing phone for free, or even offering a cash incentive to the buyer.

Simply logon to either www.celltradeusa.com or www.cellswapper.com, enter all of the information about the contract you want to get out of, then simply wait for someone to jump on the deal and offer to take over your contract. Once someone shows interest, the service provider is contacted and the buyer needs to obtain normal credit approval to take over the plan. As long as the buyer checks out, the service provider will make the change. The cost to the seller for this service ranges from $0 - $19.99 but in comparison to an early termination fee, it's pretty minimal.

In some cases, cell phone service providers may amend your contract if you can prove that a life change has happened that no longer makes their service usable, such as a move to an area that is not covered within their network. But if you just want out...try selling your contract, and be set free!