Money Watch: Pay loans or save for kid's college? - USA Today Money Watch: Pay loans or save for kid's college? - USA Today

Saturday, July 14, 2012

Money Watch: Pay loans or save for kid's college? - USA Today

Money Watch: Pay loans or save for kid's college? - USA Today

Q: My wife and I have remaining federal student loans of $26,000, with a 3.9% interest rate. Is it best for us to increase our monthly payment from $175 to $300 to pay it down more quickly? Or should we put $125 a month into a 529 plan for the children we plan to have in the next two years?

A: The decision to pay down your student loans or to save money in a 529 plan should include both the financial and emotional aspects.

First consider your overall financial situation. For example, setting up an emergency fund and getting your full 401(k) employer match may be more beneficial uses for the extra cash.

Then compare the advantages of paying off a student loan against what you would gain by putting money in a 529 plan:

A 529 plan is federally tax free and many states also offer tax breaks. But remember that the investment return is not guaranteed. You will be comparing an uncertain investment return on the 529 plan for a child you plan on having to a guaranteed interest rate on your own student loans.

With federal student loans you can deduct up to $2,500 in interest. And you can take it without itemizing on your 1040 tax form. The deduction is phased out for taxpayers with adjusted gross incomes of $60,000 to $75,000 (single filers) and $120,000 to $150,000 (married filing jointly).

Once the loan is paid off, you will have extra monthly cash flow that you could use to save for college. Sometimes the emotional satisfaction of paying off the loan trumps other financial considerations.

Since your children are "planned," you can set up a 529 plan and name yourself as the beneficiary, and change the beneficiary later. The downside of a 529 plan is that withdrawals that are not used for qualified college expenses are subject to tax and a penalty.

Since you are still planning for a family, keeping your options flexible is a good approach. You can now save money in a taxable account and make a lump sum initial contribution to a 529 plan after your child is born.

But keep in mind that saving for retirement is usually a higher priority than saving for college.

Tim Kober,NAPFA-registered financial adviser

Cedar Financial Advisors, Beaverton, Ore.

Read previous Money Watch columns:

Caley concerned by Gers verdict - SkySports

The Ibrox club discovered their fate at a meeting of SFL clubs at Hampden on Friday.

Twenty-nine of the 30 SFL clubs accepted Rangers as an associate member of the SFL while 25 clubs voted in favour of placing the newco team into the bottom tier, despite Scottish Football Association chief executive Stewart Regan claiming that decision would bring financial catastrophe and a "slow, lingering death" of the game.

Inverness chairman Kenny Cameron said: "There will now inevitably be serious consequences for the game in Scotland.

"We have all, as clubs, accepted the views of our stakeholders in making the initial judgement to uphold sporting integrity.

"All clubs will now have to live with the repercussions of this decision. Scottish football was at a crossroads in terms of what was on the table for all clubs regarding reorganisation, financial distribution and a road map that would have taken the game forward.

"But this has now been thrown into disarray by this decision. This is a sad day for all clubs in Scotland."


A package of reforms were offered by the SFA, the Scottish Premier League and the SFL as a carrot for clubs to put Ally McCoist's side into the second tier.

The proposals would have seen the SPL increase to 14 teams for the beginning of season 2013/14, with a mechanism in place to add two more at a later date.

Changes to the size of the other leagues as well as the merging of the ruling bodies, the redistribution of monies, parachute payments, play-offs and a pyramid system are also on the agenda.

Cameron insists it was an opportunity missed, saying: "None of us will escape the financial fallout from this.

"There was an opportunity on the table, in terms of the joint agreement tabled at today's meeting for us all to come together and a genuine willingness to improve the game substantially over the coming years.

"But it now looks as though this will once again be kicked back into the long grass.

"A once in a lifetime opportunity to bring forward change may well have been lost.

"The directors of ICTFC are fully aware of the financial implications of this latest decision on Newco.

"The loss of either our fans or our sponsors was never going to leave any of the clubs in Scotland in a healthy financial position and for some this could spell the end of football as we know it.

"Certain clubs in the SFL have perceived the financial information they were receiving as a 'big stick' to beat them into accepting Newco in the First Division.

"This was definitely not the case, as far as I am concerned. What they were being told was the reality of the situation."

Drogba says money not behind China move -

Former Chelsea soccer player Didier Drogba and Shanghai Shenhua Football Club director Zhou Jun hold a club's jersey during a media conference in Shanghai. Drogba signed with Shanghai Shenhua on a two-year contract that will reportedly make him China's highest-paid player. Picture: AP /Eugene Hoshiko. Source: AP

Shanghai Shenhua fans shout after former Chelsea football star Didier Drogba arrived in Shanghai to take up his new role at Shenhua FC, joining his former Chelsea teammate Nicolas Anelka who started with the team in January. Picture: AFP/Peter Parks Source: AFP

< Prev

 of 2

Next >

DIDIER Drogba was given a hero's welcome as he arrived in China on Saturday to start one of football's highest-paid contracts.

Hundreds of fans, many clad in "Drogba 11" shirts, greeted the former Chelsea star at Shanghai's Pudong airport, some carrying flowers, others brandishing his name in English on placards and many jostling to touch him.

"What I experienced at the airport this morning was unbelievable. Even when I was at Chelsea I never experienced anything like this," the 34-year-old told reporters at a press conference to launch his career with Shanghai Shenhua.

The Ivory Coast striker sealed a deal that Chinese and British media have said is worth 200,000 pounds ($314,000) a week, making him the highest-paid player in China and in the top bracket globally.

But he insisted money was not the reason he had moved to a side languishing near the bottom of China's Super League, just weeks after he scored the penalty that won Chelsea the European Champions League.

"China is a big sports country and it is a big challenge. For me it would have been easy to go to another team in Europe but I chose China because of the challenge," he said.

"The money is not the most important, everybody knows that I give a lot of money to my foundation... I didn't come to China with the idea of making a lot of money."

Drogba joins a fast-expanding group of foreign stars who have been lured to China on enormous salaries, which are typically funded by Chinese business titans.

Drogba will play alongside French striker Nicolas Anelka, who signed with Shenhua in January on a deal believed to be worth nearly as much.

The pair will work under former Argentine coach Sergio Batista, who joined the club in May.

Shenhua are bankrolled by high-profile video-game tycoon Zhu Jun. In the far south of the country,

World Cup-winning coach Marcello Lippi is at the helm of league-leaders Guangzhou Evergrande, and Nigerian striker Ayegbeni Yakubu has just signed with cross-town rivals Guangzhou R&F.

Shenhua are just one point off the bottom of the 16-club Chinese Super League, halfway through the season, and there are huge expectations on him being able to lift the team.

"These legs may be 34 but they still feel 26 and I am not thinking about retiring anytime soon," Drogba said.

Shanghai Shenhua play Beijing Guoan on Saturday night at home in what is regarded as one of the biggest fixtures on the Chinese domestic football calendar.

Drogba will not play and said he was not yet sure when he would represent Shenhua for the first time.

"I've been on holiday for three weeks and put on a little bit of weight so I will need to train a little bit. I'm going to speak with the manager, he has to make the right decision," he said.

The Chinese Football Association believes the domestic game, which has endured years of corruption and repeated failures by the national team, is set to take off thanks to the infusion of expensive talent such as Drogba.

"The high-level world-class players and coaches will be able to provide a learning opportunity to our domestic players and coaches," CFA spokesman Dong Hua told AFP.

Critics say the money is being wasted, with the foreigners sometimes getting paid more than the salaries of the rest of the players combined, while grassroots football is being ignored.

However for Chinese football fans, having Drogba is purely a cause for celebration.

"Let me tell you something, now we have Drogba, Shanghai is not a common city anymore, Shanghai is a world mega-city now," said one elated fan, Lu Xiaobo, who went to greet him at the airport on Saturday morning.

Mormons lash out at 'tasteless' Businessweek cover that mocks the Church's financial enterprises - Daily Mail

By Daily Mail Reporter


The Mormon church is outraged with the latest cover of Bloomberg Businessweek magazine which parodies their prophet’s mission and sends up the lucrative nature of the organisation.

The cover illustration satirizes the moment when Mormons believe John the Baptist bestowed the priesthood on Joseph Smith, the faith's founding prophet.

On the cover, John the Baptist tells Smith, 'and thou shalt build a shopping mall, own stock in Burger King, and open a Polynesian theme park in Hawaii that shall be largely exempt from the frustrations of tax ...'

Smith replies, 'Hallelujah.'


Controversial: Commenting on the vast financial holding of the Mormon church, the cover illustration satirizes the moment when Mormons believe John the Baptist bestowed the priesthood on Joseph Smith, the faith's founding prophet

Michael Purdy, a spokesman for the Mormon church, told Deseret News that the cover is ‘in such poor taste it is difficult to even find the words to comment on it.’

The cover accompanies Caroline Winter’s article, How the Mormons Make Money, which details The Church of Jesus Christ Latter-day Saints’ huge financial holdings, including a $2 billion mall in Salt Lake City and a $1 billion ranch in Florida.  

The article states that the LDS church owns a wide variety of business including media companies, an agricultural company with 1 million acres, and a hospitality business.

The LDS church also owns an insurance firm with assets of $3 billion and an impressive real estate portfolio, according to the article. 


Enterprising: Among The Church of Jesus Christ Latter-day Saints financial holdings is a 2 billion mall in Salt Lake City, pictured, and a $1 billion ranch in Florida

With money also being made through an investment fund and a trust company, the LDS church is worth about $40million, a study cited in the article suggests. It also takes in $8 million annually in tithes, says the study.

Despite its wealth, the LDS church donates less than one per cent of its annual income to charity, according to a study cited in the article.

Mormon blogger Joanna Brooks described the article as a 'generally balanced and straightforward assessment of LDS Church finances and enterprises.' However, the mocking cover belies the article Brooks said.  

'Trying to sell a few magazines, Businessweek destroyed an opportunity for a serious discussion,’ said Brooks.

A statement issued from the LDS church on Thursday evening said people who try and estimate the Church’s income and how it is used charitably ‘rarely capture the whole picture.’

Purdy described the ‘bias and speculative nature’ of the article to the LDS church-owned Deseret News.

‘It is narrow and incomplete, omitting, for instance, a good deal of information given on how church resources are used,’ he said.

The statement highlighted that Mormons began as a poor, persecuted religion isolated in the Utah mountains so built their own businesses because no others were around.

They also pointed to volunteer work running employment  services and welfare programmes.

The Church insisted that the tithes go towards building new houses of worship and allowing the ‘the church to carry out its religious mission across the world.’

Here's what other readers have said. Why not add your thoughts, or debate this issue live on our message boards.

The comments below have been moderated in advance.

A lot of what the LDS church does is admirable; however, even I was shocked that they only give away 0.9% of their "income" per year in charity. Yes, they do a great job of taking care of their own, but I always assumed that charity was meant to go beyond one's own religion's followers. Perhaps this will cause them to at least change their policies or be more transparent. I also wonder if their for-profit ventures are really afforded tax free status. If so, that should change. Still wondering when women will get the priesthood, especially as the church proposes the actually appealing doctrine to me as a woman that there is a Heavenly Mother. As for the comments on Islam, Islam is not an organized religion with a central authority that owns various properties, etc. The lack of a central authority is one of its problems as nobody can "speak" for Islam. Islam has it's issues, but tax avoidance and shady financing appear not to be one of them (so far).

Uh, it's their money...WE aren't forced to give money to them and if they use it to take care of their needy congregational members etc...who cares. I have the choice as to who I will give my dollars too...unlike the leaches in DC.

Apparently god's favours can be bought, funny stuff.

Magic pants for everyone!!

In 1841 or '42, Joesph Smith, the (American) founder of Mormonism, assembled his followers on the shores of the (lovely) Hudson River, 75 miles south of Albany, NY, and announced that he was going to walk on water. He rowed to the center of the river, prayed and stepped out of the boat on to the river. Hard as this may be to believe, he sank like a lead balloon. He later explained that his "faith wasn't strong enough." He was driven out of town and made his way to the mid-West, where he was promptly assassinated (to cheers.) Today, another Mormon, Mitt Romney, would like to become President of the United States. Will somebody please tell me how to vote?

I'd wager that the vast majority of Mormons believe that the proportion of income spent in 'humanitarian aid' would be far, far higher, something like 50% the way that the leaders have carried in about the wonderful charitable work the church does. It will be a shock that this figure is even less than one percent. No wonder the church doesn't open it's books to tell the members how they're money is spent. Just vey sad that many of these deluded people continue to 'donate' 10% of their income to the corporation for life, all in th belief that it's God's will.

I guarantee the Mormons are not on food stamps either....leave them alone Libs.

Last I checked it was a "free" country and the Mormons can do whatever the heck they want with their money. At least they are not stealing it from me and blowing it on Solyndra, Obamacare, wasteful stimulus packages that buy off their crony political hacks, and trying to steal MORE $ from me at the end of this year! At least the Mormons are investing in hard working Americans and actually believe in the American dream. That is way more than Obama can say.

Mormonism is about as believable as Scientology. As my mother would say, "The truth will set you free, but first it will make you mad".

Back in the 80s I know they were taking in $1m tax free just from members' tithing. I'm sure it is much, much higher now. I'm an ex-Mormon. One of the things I've realized is they only help their own. They have a "bishop's warehouse" of food you have to get a letter from the bishop to use. When I left I had a point where I needed food for myself and my child and a Catholic and a Lutheran church gave us food... no preaching, no questions. I thought that spoke a lot. Anyway, how do do you think they build those temples? I have been in them. In the bridal area (Las Vegas Temple) the bathroom faucets are solid gold. It was beautiful, though.

The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline.

Rodgers not prepared to throw money around to revive Liverpool's fortunes - Daily Mail

By Dominic King


Brendan Rodgers has warned he will not throw money around in attempt to revive Liverpool’s fortunes as he promised never to pay over the odds for new signings.

Fabio Borini will become the first signing of the Rodgers era after Liverpool agreed a 10million fee with Roma for the Italian international, who arrived on Merseyside to complete the formalities of a medical and personal terms.

It was initially anticipated that Gylfi Sigurdsson, who flourished under Rodgers at Swansea, would be Liverpool’s first business of the summer but the manager says he chose not to pursue that deal as he believed the value was wrong.

Doing it his way: Brendan Rodgers says Liverpool will not pay over the odds for players

Doing it his way: Brendan Rodgers says Liverpool will not pay over the odds for players

Rodgers wants to make “three or four tweaks” to his squad before the new Barclays Premier League campaign begins but does not have an appetite to spend for the sake of it and, given the sad fate that befell Rangers, he is adamant it is vital to be prudent.

‘If there is a player out there who can make a difference, we will do all that we possibly can to bring him to the football club,’ said Rodgers, who will take his squad to North America on Monday for a two week pre-season tour.

‘What I won’t be prepared to do is waste time, money and effort to bring in a player who won’t add value. I just don’t see the point of doing that.

First in: Doctor Zaf Iqbal carries out a medical examination of new signing Fabio Borini

First in: Doctor Zaf Iqbal carries out a medical examination of new signing Fabio Borini

‘Who would have thought that a club like Glasgow Rangers would fall apart? If you believe that it can’t happen, well it can. It might not be now but it could be later on.

‘Look at that club’s history and where they have been in the game. I will push the boat to get the players that I want to get in. Hopefully the board will support me on that.

‘Gylfi Sigurdsson was not about the club wanting to pay money. I will make that quite clear. This was the manager and how I saw the deal being done.’

Liverpool were not prepared to meet Sigurdsson’s personal demands and that resulted in him joining Andre Villas-Boas at Tottenham but there is no sense that Rodgers regrets failing to complete the deal.

Missing out: Gylfi Sigurdsson opted to join Spurs and not follow Rodgers to Liverpool

Missing out: Gylfi Sigurdsson opted to join Spurs and not follow Rodgers to Liverpool

He said recently that Sigurdsson has missed an ideal opportunity to work at “a football institution”; while he would have enjoyed linking up with the Iceland international again, he is not dwelling on the matter.

‘Listen, I wasn’t disappointed at all,’ said Rodgers. ‘Gylfi is a good kid but I knew the value of Gylfi and where it was at. If I wanted to push the club to do the deal, then I could have done. He is not a player we have lost out on because of money. I will make that absolutely clear.

‘What I want to do is protect the club as well. If I have got a player, and I can put a value and worth to him, great. I am not one to identify a player then let the club go and spend an absolute fortune, when it will come to bite you on the back side.

‘There are only a small group of players that will be able to come and play this way. Once I am at that value – and if it goes way beyond that – I won’t be prepared to do it. We will draw a line under it and move on.’

Here's what other readers have said. Why not add your thoughts, or debate this issue live on our message boards.

The comments below have not been moderated.

In spite of my last post which was a bit sarcastic (sorry), I'd rather see LFC progress in 2012/2013 than another title win by Citeh. In English football Liverpool are iconic like United, Citeh on the other hand are pitiful. Keep the faith pool and we'll do the same at OT!

He's going to need more than money, bless him! GGMU...

Didn't miss out on Gylfi ?? U wanted to sign him but he chose to go elsewhere. Wot do u call that ?? Let's not kid ourselves that Brendan Rogers has agreed the same terms at LFC that he had wiv Swansea. Practice wot u preach Brendan and dont be a hypocrite. They couldn't afford him after Kenny's disastrous transfers, Kenny and Rafa's pay offs and ure big new salary !!

where were you last season when money was being thrown around left right and centre.rodgers so far has left a great impression on me. in rodgers we trust.YNWA

This kind of statement was needed as a note to other clubs that the ill judgement of the previous manager and director of football will not be happening again. In other words, make the price tag realistic or we wont buy. The money they spent on English talent (If you can call it that) was outrageous, literally poured down the drain.

I am afraid he might be forced to throw some money if all other clubs have upgraded, but he needs to get rid of the rubbish first.

lol. they'll be in bottom four for most of season

Another season without champions league football and you'll soon see mercenaries matey don't you worry about that.

That's because there isn't any to throw around!! Haha

i like the fact he wont be held to ransom, it means there will be no drogba-esq mecerary in his team! also that the likes of rooney can turn round and say give me £250k a weke or im off. he'd say jog on pal! i do hope we get gaston ramirez, but then again before last season who was joe allen??? no 1. if he can turn henderson into a allen type trust anything the guy does.

The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline.

No comments: