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Sensationalism is everywhere and it's hard to know what's real, anymore. The economy is tanking, the marketing noise is deafening, and you just don't know what tomorrow will hold. This site is dedicated to a no-hype retelling of what's working for me in real estate, business, and life. Welcome.

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Archive for Baby Stuff!

When it comes to college savings, you may feel that you’re fighting an impossible battle, but the more you can save and the earlier you start, the more options your kids will have down the road.

Now that we have a baby in the house, starting to save for college has become a big topic of conversation for my husband and me.

Not only do we have to decide what type of plan to go with – we’re batting around doing BOTH a 529 Plan and a Coverdell Educational Savings Plan – but also how much to set aside.

The fact is, the top private colleges are extremely expensive and yearly tuition hikes show no signs of slowing. 

In fact, I read a interesting article recently saying that some schools were boosting their perceived desirability by charging MORE. Admissions actually went up when some schools raised their tuition because students have begun to equate a high price tag with a high quality education.

Can You Save Enough For Your Child’s College Education?

“In the absence of any objective measure of the value of an education, price becomes the default yardstick. The more expensive a college is, the better the education it presumably provides. (After all, if other families were willing to pay this much to send their kids here, it must be worth it.)” – www.Money.CNN.com

No doubt about it, college is getting expensive.  Assuming you wanted to, could you actually afford to send your kids to a private 4-year college? Here’s what you’d have to save:

  • Tuition, room & board, books, etc. at a private college may be on average around $142,000 for the whole she-bang.  Using $25,000 for tuition, $7,000 for room and board, and an additional $3,500 or so for books, travel, and entertainment each year, or $35,500/year.
  • At a public college with a tuition of closer to $6,500, but the same cost of living expenses, we could expect a yearly bill of $17,000 or $68,000 all together.  I know where I could buy a house for that much money, right now… (Come to think of it, maybe I should just buy that house on a 20-year mortgage and plan to sell it when junior’s ready for college…)

If you think that the cost of education will keep rising, let’s say at an average rate of about 5% a year, you’ll actually need more than this to pay for your child’s costs by the time he’s old enough for college.

Building in this price inflation, you could be looking at:

  • Private College Education Costs in 2028: $377,000
  • Public College Education Costs in 2028: $180,000

Whew!  That’s a real sting, but it pays to be more realistic and foresighted now, than to be caught flat-footed with fewer options on the table down the road.

Does Your Financial Plan For Your Kids College Let You Start Saving (and Investing) Now?

What all this means is if you want your kids to have the option of the very best education money can buy, and you start saving when they’re born, with a 20-year investment window, let’s see how much you have to put aside each month.  (I’m going to assume an 8% rate of return because we’ll need to invest a little more conservatively since we don’t have as many years for the investment to grow.)

  • To save up for the public school education, we’d need to save $3,700/year and we’d end up with $182,825 in 20 years.  That’s setting aside just $308/month per child.
  • To save up for the private school education, you’re looking at socking away more like $7,700/year to accumulate $380,474 in 20 years’ time.  That works out to $641/month per child, which is a much heftier chunk of change, especially when you consider the cost of several children. 
  • Also, if you start later, say when each child is five years old, you’d have to put away for $525/month for public school and $1,083/month/child for private.

 

I know most of us aren’t putting away that much for our own retirements (retirement savings should take priority over college savings in your financial plan, by the way) much less saving it up for the kids’ college.  It’s a big undertaking, especially when you consider all the other costs that come along with a new baby.

At a certain point, if you’re not incredibly wealthy, I think you have to just say, “I will save as much as I can reasonably put toward my kids’ college education, and if they want or need more when the time comes, perhaps they can contribute to the costs through their own job or business, through scholarships, and through debt. 

I was fortunate to get a college scholarship myself.  Even though it wasn’t to a fancy-schmancy private school  (rather, it was to a great public university), I decided to take it because it offered a great value.  There are lots of grants and scholarships available for kids who keep their grades up and excel in extra-curriculars.

Keep Your Head Down and Your Chin Up (If You Can Do Both At The Same Time) And Start Saving

It can be frustrating to feel like you’re fighting a no-win battle to save for a college education for your children.  The key is to not get discouraged, but to just make regular, affordable contributions month-in-and-month-out.

You may not be able to save 100% of what your kids will need for college, but remember that this is a gift to them, and everything that you CAN save will relieve them from debt, work, and compromise down the road.  However, although I’m not a big fan of debt.. hard work and compromise aren’t always so bad.

Keep Pluggin’ Away!

 

Emily

Dec
11

What Does Illinois Governor Rod Blagojevich Have To Teach Us About Ethics?

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Illinois Governor Rod Blagojevich By now, we’ve all heard about the governor of Illinois, Rod Blagojevich, trying to auction of President-elect Obama’s vacated senate seat.  This type of unethical behavior in pursuit of profits is particularly abominable when we see it practiced in politics and by people in a fiduciary position of trust and power.  What’s happened to our country that we have elected officials who think this is OK, and a number of people in the media willing to just say "Oh, that’s Illinois politics for you," and kind of laugh it off?

It’s troubling to see this type of corruption in our politics.  But I don’t believe Blagojevich’s case is isolated, or that this is just a problem in politics.  I am afraid unethical behavior in pursuit of personal gain is more common than I previously realized.

Other Investors and Business People Have Noticed The Sliding Ethical Scales…

I went for a walk yesterday with a former student, now a friend, who is a fellow entrepreneur and stay-at-home Dad here in Seattle.  Michael told me about some of his recent investments and some private lending he’s been doing.  Passive investments like these are a great way to generate income once you have built your wealth to a level of "critical mass" where you can live off the INCOME from your savings, and not have to eat into the principle.

He’s having some trouble with one of his partners though, so we eventually ended up talking a bit about business ethics and the prevalent lack thereof in many cases.  Sometimes we stay awake at night wondering if what people are telling us is real or whether it’s just what they feel needs to be said to "get the deal done."

We’ve seen examples of this type of honesty in sales, in brokerage, in investment opportunities, and it’s frustrating at upsetting.  My inner-Pollyanna tends to be very trusting, and I’m coming to realize that I need to be a little more cynical and self-protective when it comes to working with people I don’t know well.

How Far Over The Line Will People Go In Search Of Profits?

I got upset on Tuesday night when I was reading a marketing course that taught out-and-out deceptive practices in the name of sales.  The author promoted a tactic of "fabricating" first-hand-accounts and personal testimonials on a sales page in order to sell a product he or his students had little-to-no experience with.  The author justified this approach saying he was using a pen name and he had a disclaimer page which mentioned that the story might not be 100% accurate. 

In my book, there’s a difference between a dramatization and an outright lie, and this approach crosses the line.

When queried about the approach on his discussion board, the author replied by saying that the people who write TV commercials are just writing a script, they’re not actually sharing their first-hand knowledge with the product.  Then actors, who have also not used the product, also deliver the lines.  Are they lying?  His case was that he was just "doing marketing" and that’s the way it’s done.

I can see the parallel, but ethically, I have some major concerns with following that approach.  Does anyone else think it’s weird that a 40-something guy is writing sales pages on the Internet using the voice of a teenage girl?  Something about that just seems a little creepy to me. 

At The End of The Day, You Have To Be Able to Look Yourself In The Mirror

I think the lesson Governor Blagojevich teaches us is that it’s not wise to do or say things that you wouldn’t want made public.  If your actions are not in line with your core beliefs, you have to re-evaluate what you’re doing.  Some people are willing to do *almost anything* for the money.  I’ve certainly felt that pressure before, myself, and it’s My Ethical Advisory Boarda lot easier to take the high moral ground when you have the financial resources to meet your daily needs.

To avoid getting caught up in the moment, I often think of folks who have been a moral compass to me – my parents, my grandparents, business partners and ask, "If so-and-so found out about this, would I be embarrassed?  What would he/she think of me or say to me about this?"

Now that I’m a parent, I can also use the example of my son, Blake – "Would I want Blake doing this behavior?"  "How would I justify this to my child if he caught me at it?"

Let’s Each Commit to High Ethical Standards and Change The Country One Person At A Time

There’s a lot of shady stuff on there, especially on the Internet, I think, where it’s so easy to be anonymous, it seems like we can re-invent ourselves time and time again.

Plus, the habit of dishonesty is catching.  It’s a slippery slope to go from embellishing a story to make a point, to starting to make up parts of stories, and then just completely lying.  If we see others engaging in this type of behavior, we can start to justify to ourselves that "that’s how things get done" and it makes it a little easier the next time we want to bend the rules ourselves.

I would like to put a notice out to marketers and business people everywhere, that this type of behavior is no longer acceptable.  Lead the field in your circle of influence by maintaining the high moral ground and privately discussing your concerns with others if you see them stretching their ethical boundaries.

This type of accountability is the only way to uphold the American values that have made our country strong, our businesses prosper and our society thrive.  I hope to see business ethics become stronger than ever in the face of the public scandal surrounding Governor Blagojevich.

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Now that I am "unemployed" again, I feel a certain amount of fear and trepidation… what will I do with myself, now?  Of course, I wasn’t making any money before in my 100% commission position, so my earnings will probably go up in the short run.  However, the reason I was looking for better work in the first place (when I started with Marcus & Millichap earlier this summer) was to increase my long term income potential and provide more for my family.  That desire still exists.

The fact that there are constant, pervasive rumblings about the dire economy – job loss, stocks down, real estate down, etc. – certainly doesn’t add to the cheer or optimism surrounding a job search.  I’m sure many folks currently hunting for jobs can relate, especially as Christmas approaches!  Although my first choice would not be a formal 9-5 job, since I love the freedom entrepreneurial positions provide, nothing is off the table, as my immediate goal is to substantially boost my income.

In attempting to answer my own question of what to do with myself next, I am keeping my options open.

I have thought about seasonal work, I have started looking on job boards on the Internet like Monster.com, Craigslist.org, and various temporary placement agencies.  I have started putting out my networking feelers to see if anyone "knows someone" that needs help from a hard worker like me.  I am also considering freelance work and have looked at service providers at elance.com to see if they are earning anything that approaches a reasonable amount for the type of work I would enjoy doing.

Reducing Costs Isn’t the Same As Earning Money, But It Can Help!

While I’m searching, I tend to obsess a little bit about our family budget and how I can keep costs down. 

For example, there’s the issue of child care… we are currently paying $950/month for child care 4-days per week.  It’s hard to justify paying for day care when I’m arguably home "not doing anything."  Or at least, not earning enough to offset the cost of child care.

But, as we found out after Blake was born in May, it can be hard to get child care on short notice around here (it can take 3-6 months for a position to materialize at many infant day care programs) and it is probably worth "saving" his spot if I anticipate finding work again in the near future.

 

Here’s the current income creation plan:

  1. Creating income to offset the cost of child care is my top priority, so anything I can do to earn extra money is game.  Up to a point… I have put a dollar value on my time so that I don’t wind up working at Burger King or devoting time to other menial work that will distract me from finding my passion.

    I will look for opportunities as an independent contractor where I can get hourly work or project work that will offer a high enough return to make it worthwhile.

  2. I have also thought about being a residential real estate agent.  I don’t know if this is possible to do "part time" or without sacrificing all my nights and weekends when my husband and baby are home and I would like to be spending time with them.  I know I’m not a cold-calling machine now, so how would I go about building this line of work?  I love the real estate business, but I don’t love get-tough-or-die SELLING, if that makes sense.
  3. Working on my blog is my second priority.  :)  That’s US HERE!  I have heard from a number of people who have been able to turn their blog into a full time income-generating machine, so I’m going to be applying more focus to this site in the attempts of beginning to wring some money from it.  Don’t worry, dear reader, I don’t anticipate laying into the hot and heavy sales pitches. :)  We’ll keep it fun and useful.
  4. My third priority – just because it’s a slow-moving beast – will be to explore the "formal job market" again.  Since I have been out of school, I don’t have a lot of formal work experience, and I don’t have a "field" per se that I will be focusing on.  I’d wanted to go into finance/banking earlier this summer, but with the massive layoffs and closures of banks and investment institutions across the country, I get the feeling that this is not the time to be trying to enter that field.
  5. Last but not least, I am considering educational tracks that may help me improve my employability.  For example, my husband told me that he thought I could learn FLASH computer programming in about a month and that there was a guy at his office doing that full time and making 6-figures.  (Wow – is that for real?  Any thoughts on this one??)  Additionally, one of my business associates is working on completing her Certified Financial Planner education and testing.  She’s not sure what she’s going to do with it yet, but having designations and initials behind your name is always good.

 

Going After That Elusive Work-Life Balance

Overall, I feel really fortunate to be in a position where I am not going to SUFFER from being unemployed.  However, I want to put my talents for work to optimize my family’s income level AND life balance.

How have you, or people you know, handled being at this type of cross roads in the past?  This is new for me, I’ve never really been a full time corporate employee.  Is that the way to go?  Any books you recommend I read?

I would love to get your input!

Thank you – Emily

Jul
10

Working at Home as a New Mom!

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Hi there,

I apologize for being out of touch for a few weeks – you’ll have to forgive me, I just had a baby! Happy Baby Over the Shoulder

Baby Blake is very healthy and happy… he hardly cries and all and really makes things easy on his parents – we are very grateful!

Never the less, working from home with a new baby is not as easy as I first thought it would be.  There are feedings, fussy periods (that always surprise me when I’m trying to talk business on the phone), sleep deprivation, diaper changes and more!  Lots of little interruptions throughout the day, not to mention the times when he is awake, smiling and wants to be interactive!  (I try to squeeze in the work without being distracted by gazing at the little faces he makes while he’s asleep!)

I was lucky that my husband was able to take 3 weeks off work to help take care of me and the baby right after he was born.  Now he’s back at work, and my biggest complaint is that it’s hard to get out for networking meetings with a baby in tow – I still haven’t figured out a good daycare/babysitter solution, yet.

Anyway, that’s the update, I hope to be back posting regularly now that Blake is 6 weeks old and I’m falling into a routine a little more.  Here are a few pictures of Blake, and for real fans, you can tune in to his blog:  Blake.Cressey.org for more pictures, videos and updates!

IMG_36572008 06 29 012

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About Emily Cressey

Emily Cressey is a real estate investor and licensed real estate agent living in Seattle, Washington. After graduating Phi Beta Kappa with an Economics degree from UNC-Chapel Hill (Go Tarheels!) her focus has been on building business for cash flow and investing in real estate for wealth. If you have questions about real estate investing, personal finance, or would like some flat-rate, affordable advice on one of these topics. Please fill in the Contact form.