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Showing posts from October, 2011

Is Student Loan Forgiveness the Answer?

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President Obama announced changes to the “Pay As You Earn” plan on Wednesday, October 26, 2011 that would/could ease the repayment of student loans. According to the College Board, the average public in-state tuition rates are increasing 8.3 percent for the 2011-12 year.
President Obama pointed out that the average college graduate owes $24,000 in student loans and that the 2011 graduates have an average debt load of $27,300. USA Today reported that outstanding student loans will reach $1 trillion ($1,000,000,000,000) before the end of the year. Currently, student loan debt in America has surpassed credit card debt. Is this our next financial crisis?
The highlights of the “Pay As You Earn” plans or income-based repayment plans are to: ·Start this option is 2012 (vs. 2014) ·Cap student loan payments to 10% of discretionary income (vs. 15% ) ·Forgive any remaining balance after 20 years (vs. 25 years) ·Support consolidation of direct government student loans with government-backed private l…

Making Sense of Occupy Wall Street

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As a business professor I am torn about the Occupy Wall Street protest (OWS).On one hand, the capitalism and free market economy enable people to “pull themselves up from their bootstraps” and become wealthy by inventing, creating, developing and delivering new and creative products and services that meet a need.Doing this at a price consumers will pay while making money is an art and science.For those who have this talent and gift, should they not be compensated for taking risks?Isn’t that what makes American business great?This is the land of opportunity….right?Just look at what the late Steve Jobs did to help make your life better.We didn’t have to buy an overpriced MP3 player, but Jobs had the gift to make the i-anything what we as Americans wanted to buy. On the other hand, I read about executive compensation in the millions while the business is laying off workers or not giving them a raise and I wonder how many line jobs those millions of dollars to one person could pay for. I w…

National Document Shredding Day?

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There is not an official ‘National Document Shredding Day’ yet … And maybe that’s ok, because it is a good habit to take on daily. If you do not own a shredder, watch for local ‘shredding’ days that may be sponsored by a local bank or your city. On September 30, 2011, the whole state of Tennessee sponsored a document shedding day to promote identify theft awareness.
What should you be shredding? Anything that may contain personal identifying information such as Social Security numbers, your address, date of birth or passwords, cancelled checks, check registers, bank statements or receipts, loan documents, mortgage documents, brokerage statements, school records, credit card, mortgage and finance solicitations, credit card statements, contracts, personal business papers, and credit applications.
Not only are you protecting yourself from identity theft or fraud, often the shredded material will be recycled into items such as commercial grade paper towels, toilet paper and other paper pro…

Zone Euro Dexia: Crise des liquidités: "Il faut recapitaliser les banques!"

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Le futur possible démantèlement de la banque franco-belge (et luxembourgeoise) inaugure une série de crises dans le secteur bancaire européen. Alors que le Fonds Monétaire International "recommandait une recapitalisation urgente du secteur bancaire de la Zone Euro", les dernières évolutions de la crise de la dette "mettent à terre" cette première victime.
Un plan d'urgence entre 100 et 200 milliards d'euros
Rassurons immédiatement les clients sur les garanties d'une banque qui serait en situation proche de la faillite, qui, jusqu'à 100 000 euros, seront "payés" par le fonds de garantie de  l'état , au delà il s'agira bien "...d'une simple créance", c'est à dire "sans obligation légale et donc contractuelle envers le client... " Bien que Dexia soit clairement- à des années lumières d'un tel scénario catastrophe, en Belgique, hier, "quelques 300 millions" d'euros de dépôts sont -déjà- "…

Free Checking a Thing of the Past?

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The day has come. We are beginning to see the ramifications of the Durbin Amendment - Dodd-Frank Act, which became effective October 1, 2011. The amendment imposes limits on the fees that banks can charge merchants for each customer debit card purchase. To compensate, some banks are looking to make up for the lost revenue via other means, such as charging you a fee for the use of your debit card and/or checking account. You have options as to where you do your banking. It is important to select an institute where the service and products best match your needs.
ABC News has compiled a list of the 10 largest banks and how much each is charging for basic checking accounts and the debit cards. Additionally, you can learn about your local bank and credit union options online.
It only takes a few minutes to do a side-by-side comparison as to your options but can save you significantly over the long run.

Zone Euro/ Eurogroupe: A Luxembourg ça chauffe dans la coulisse! (Exclusif)

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          Jean-Claude Juncker dans une relative décontraction...
Luxembourg le 4/10/2011: C'est toujours un plaisir de s'aventurer dans le quartier d'affaires du Kirshberg à Luxembourg, aujourd'hui le "printemps Indien" a rendu l'exercice d'autant plus agréable...
Juncker l'indigné!
Le premier ministre luxembourgeois, Jean-Claude Juncker, président de l'Eurogroupe, s'était libéré "un temps" du scandale d'état  qui pointe son nez dans le pays:"Ici à Luxembourg, une sombre affaire de futur stade national (ou "Stade de Livange")fait l'objet de toutes les attentions des médias locaux. Pour faire court, un potentiel délit d'initiés viendrait rompre le climat serein de notre pays, ses politiques...!"(Objets de nombreuses discussions entre les journalistes du pays présents à l'Eurogroupe) Le dossier suggère une entente entre des promoteurs locaux -propiétaires des terrains- retenus pour le futur stade n…

To Convert or Not Convert the IRA

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This was the year long debate in our household. In 2010, the federal government dropped the income limit for moving savings from a traditional to a Roth IRA. Additionally, you had a one-time option to pay taxes on the current value of the converted funds over a two-year period. The converted asset then grows tax-free.
To get this tax break off any future earnings of the converted funds, you have to pay income tax on the value of the funds moved.
From Kelly Greene's Wall Street Journal article on 9.30.2011, "The federal government allows the tax-law equivalent of a do-over, says Maria Bruno, an investment analyst at fund giant Vanguard Group, whose customers converted more than 230,000 traditional IRAs to Roths last year, and which has processed 3,900 do-overs this year, as of Monday."
We are one of the 3,900 who converted back. This was a highly contested move in our household. Bob is sure with the current level of the national debt, that by the time we withdraw the retir…