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education

Election Impact

By | 2016, Money Moxie, Newsletter | No Comments

President-elect Donald Trump made a lot of promises to Americans on the campaign trail. Yes, he proposed building a wall on the Mexican border and blocking certain groups from immigrating to the United States, but none were more important to voters than how the candidate would impact their money.

Trump believes his economic plans will double U.S. growth, which is currently at 2.9 percent. He plans to focus on cutting taxes for the rich, increasing government spending, and negotiate better trade deals with foreign countries. If necessary, he has even suggested imposing tariffs on imports of goods to the United States.

Republicans will control the Senate and House of Representatives, so the next president may find it easier to get things done, especially at first. Here are a few of the promises made during Trump’s campaign.

Jobs

The foundation of the United States is firm and its economy is strengthening. Unemployment numbers cannot get much better than current levels. Wage growth may be a more valuable measure of economic health. Infrastructure spending of $500 billion may help by boosting productivity of Americans in the long-term.

Education and Family

  • Require paid maternity leave for 6 weeks.
  • Make child care expenses tax deductible.
  • Allow “dependent care savings accounts.”

Healthcare

    When it comes to healthcare, any president faces an aging population and rising costs of new medical technology. Trump plans to repeal the Affordable Care Act and replace it with something different.
  • Make health insurance premiums tax deductible.
  • Encourage health insurance to be sold across state lines (something already allowed by federal law).
  • Allow imports of foreign drugs where prices are cheaper.

Taxes

    Trump has proposed many changes to the tax code. The greatest impact will be on the top one percent of earners who are estimated to save about $100,000 in taxes every year.
  • Increase the standard deduction to $30,000 for joint filers from its current level of $12,600.
  • Eliminate the personal exemption of $4,050 per dependent that parents use.
  • Eliminate estate tax.
  • Eliminate alternative minimum tax.
  • Lower corporate tax to 15 percent.

Investments

In the coming months very little should change. Increased government spending on infrastructure combined with tax cuts roughly the same size could boost growth in the coming year or two. It would also increase the national debt significantly. This could depress the value of existing bonds as interest rates rise on U.S. debt.

If we raise tariffs and other countries do the same then global trade could decrease and the cost of goods could rise. Less trade would also decrease profitability for U.S. exporters. This could even cost workers their jobs.

Our advice? Vote with your ballot, not your portfolio. Think of all the missed opportunity if one withdrew whenever there was uncertainty. Whether your favored candidates were elected or not, we want to reinforce the importance of sticking to your long-term plans.

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College Education – A New Path

By | 2013, Money Moxie, Newsletter | No Comments

What’s happening to the college experience in America? It’s changing. Not because of the campus environment, but rather because of the financial burden that faces today’s students.

The cost of obtaining a college degree continues to grow at a rapid pace. So, does college still pay off? The answer is yes! However, the path taken to obtain a degree has changed from the traditional route.

Students are getting savvy about spending more for their degree. Reducing costs is a major concern. As a result, many high school graduates are starting their college experience at the local community college. They receive the same level of basic education at a fraction of the cost compared to a private institution. Once the basics are covered, they transfer to their college of choice.

Why pay more to go out of state or to attend an Ivy League? In-state colleges offer a wide variety of academic majors and activities to create a great campus experience. The in-state tuition advantage makes going to these colleges a great investment. In addition, cost conscious students are willing to live at home while going to college. This way they can save on room and board as well as the cost of food.

Technology has had a major impact on college education—not only in the classroom but also as an educational avenue. Some students are opting to take college courses online. Recorded lectures and study materials permit them to attend class at their convenience. This flexibility offers students the opportunity to work and attend college at the same time. For many, technology makes what used to seem impossible, possible.

Many have given up on the traditional college education and are looking for a trade specific education, something that requires less time, a lower financial outlay, and the opportunity to get started in a career while completing required courses.

It’s safe to say that when it comes to education, that students are making the rules based on their individual needs and financial resources.

The focus on various degrees is also changing. Choosing a degree has a significant impact on one’s lifetime earning ability. Those obtaining engineering degrees have the potential to secure higher paying jobs throughout their lifetime than those with literature or education degrees. This being said, it’s important to note that just having a four-year degree, regardless of the field of study, gives students an upper hand when it comes to lifetime earnings. Many employers are not fixated on a specific degree. They believe they can train an employee in the areas they need. However, employers view a college degree as a definite advantage. Typically, these employees know how to manage their time and resources, research information, and solve problems, making them valuable employees.

Regardless of the form of education, the payoff in lifetime earning ability is huge and increasing.

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