Straight Talk from Al Jacobs

 

ADVICE TO INVESTORS

 

For those of you who’ve been paying attention, the securities market has experienced considerable volatility these past several weeks. The three major stock indices – DJIA, NASDAQ & S&P 500 – have all incurred notable one-day increases and declines. And as is conventional, within hours of the close of the market each day, financial commentators and analysts began to offer their interpretations and recommendations. If there’s a single piece of advice which is repeated over and over, it’s that investors should be cautious.

 

Ah, yes … cautious. I’ve been listening to economic advisors repeat that catechism for more years than I can remember. That an investor must be cautious, regardless of market fluctuations, is obvious. Actually I can’t think of many endeavors in which we participate wherein the exercise of caution is not advisable. Nonetheless, the implication seems to be that, barring some bizarre circumstance, caution is not worth mentioning.

 

But along with the standard exhortation, there’s one matter the pundits will not address. You’ll receive no explanation on how to exercise caution, nor suggestions as to actions you might take in an uncertain market, as if a market were ever certain.  Hmm … but let me renege a bit. You’ll receive a bit more than just a suggestion. You’ll be given a recommendation that the way to exercise caution will be to subscribe to an advisory service. And as you might expect, the particular service recommended will invariably be the one offered by the individual who is at that moment is advocating you be cautious. So to solve the problem you need merely click the hyperlink, provide your credit card number, and your uncertainties will be alleviated.

 

And in view of all this, do I have any suggestions to offer? More specifically, what helpful advice can I provide when the market becomes volatile to ensure you’ll not become a victim of a rapidly declining portfolio of securities? Why isn’t it obvious what my recommendation will be? I will, of course, naturally stress that whatever may be the uncertainties you experience or the circumstances you face, that above all you should be cautious.

 

 

Al Jacobs, a professional investor for nearly a half-

century, issues weekly financial articles in which he

shares his financial knowledge and experience.

You may view them on http://www.roadwaytoprosperity.com

Do you need investment advice? You’re in luck.  www.roadwaytoprosperity.com  

Are school costs eating you up? It needn’t be. www.roadwaytoprosperity.com  

Straight Talk from Al Jacobs

 

STUDENT DEBT IS A WASTE

 

A recent headline is ominous: “Student Loan Debt Now Mammoth.” A majority of undergrads are taking on debt to attend college, some of it massive. Examples of students’ financial misfortunes are described, but it’s the article’s final sentence that leaves me confused: “The big question now is what, if anything, we can do about it.”

 

I’m not certain who we are. Am I, a self-financed graduate, one of we? Are parents who paid for their children’s schooling part of we? More specifically, why should the collective we do anything about it when a college education is for the direct benefit of a specific recipient? This is a problem for the student and family to resolve, not we.

 

Now that I’ve disavowed all personal responsibility for educating millions of people I don’t know, I’ll explain how each student can earn a diploma without going into hock. I subscribe to the principle of college-on-the-cheap. The first two years of post-secondary education, the freshman and sophomore years, are pursued at a local community college. The next two years, as a junior and senior, are earned at a state university. Tuition charges vary with each state, but legal residents generally enjoy low preferential rates. The annual tuition for a full academic load at the California State University system is currently in the range of $6,600 plus about $800 in various fees.

 

I’m convinced that two years at a local community college followed by the junior and senior years at a reasonably priced state university is the way to go. This is because scholastic benefit depends more upon the student’s efforts than anything else. I’ll share my personal bias with you. Unless you or your parents have more money than you know what to do with, attendance at an acclaimed university represents an unwarranted expense. The time will come when your textbooks have been sold, your course notes burned, the names of your instructors forgotten, and your framed diploma relegated to a wall at which you rarely glance. At that point your education is what’s left in your head. That’s what really counts.

As a final thought, I disagree with those critics who contend that a degree from an institution without an exalted reputation will forever stigmatize its holder. To you, I pose this question: Do you actually know from what schools your dentist, attorney, accountant, and physician received their bachelors’ degrees?

 

Al Jacobs, a professional investor for nearly a half-

century, issues weekly financial articles in which he

shares his financial knowledge and experience.

You may view them on http://www.roadwaytoprosperity.com

If you’re a bit short on money, take a look at how to change that. www.roadwaytoprosperity.com  

Straight Talk from Al Jacobs

 

FINANCIAL ERRORS TO AVOID

 

As many of us are aware, for persons pursuing the American dream for financial success, things don’t always work as smoothly as they might. A recent article titled Top 10 Most Common Financial Mistakes include as reasons living on borrowed money, spending too much on your house and not having a plan. Although these may be factors, they’re merely peripheral to financial success.  This leads me to my version of what goes wrong for most persons. I’m convinced two fundamental bad habits are what cause most people to spend a lifetime merely scraping by.

 

First and foremost in fleecing the average citizen is the credit card. I’ll describe how they should be used. When the bill arrives in the mail, check it for accuracy, write a check for the full amount and mail it in the envelope provided before any interest can be charged. This has been my habit since I acquired my card years ago. There’s another way many people choose. Presume the balance owing is $350.00. You’ll be given the option to make a minimum payment of $25.00. Many persons take this route so to stretch out their finances – and perhaps stretch out is the correct term, as I visualize an old pirate movie where the prisoner is stretched out on a rack. If you go this method, you’ll be charged interest on the unpaid balance at rates in the 25% range.

 

For the second misfortune, the motor vehicle constitutes the average American’s single most important fixation. Far more than transportation, it’s for many the embodiment of beauty, price, status and individuality. There’s no single product more forcefully promoted or representing such a substantial portion of disposable income than one’s vehicle, and the potential for financial dilemma is all too real.

 

I’ll dispense the following advice: Don’t buy anything you can’t pay for in cash. If a new vehicle isn’t within your budget, search for a serviceable used one. If the old one still runs dependably, don’t make the change.  And regardless of how you select your wheels, avoid several bad choices. Don’t lease a vehicle; if you must borrow, search for the lowest possible interest rate; and keep whatever you buy as long as it’s serviceable.

 

A final thought: These are the two reasons why many Americans remain mired in debt, but they’re easily correctible. Merely a bit of self discipline and an ability to ignore the social pressures imposed by the promoters of these scams are required.

 

Al Jacobs, a professional investor for nearly a half-

century, issues weekly financial articles in which he

shares his financial knowledge and experience.

You may view them on http://www.roadwaytoprosperity.com

 

Are your local schools operating well? Maybe they’re better than you think. See why. www.roadwaytoprosperity.com

Straight Talk from Al Jacobs

 

EDUCATION AT A STANDSTILL

 

The 2018 report on California’s educational rankings has just been released. Following the headline declaring: “California’s test scores nearly stagnant,” the byline states: “Disparities between disadvantaged students and their peers could persist for decades.” It appears this concern by the Department of Education over achievement gap between the various ethnic and economic groups of students takes precedence over their actual academic performance.

 

In case you’d care to know how California’s students are actually performing at their studies, the report spells it out. The state’s student population meeting satisfactory English language standards is just under 50 percent. As for math, some 39 percent managed to make the grade. This is disconcerting, perhaps, but what appears to particularly dismay the educational establishment is when they view the performance records of select groups. The proportion of Hispanic students meeting minimum performance level in English is 39 percent; for math it’s 26.6. Even more disillusioning is Afro-American achievement, with English at 32 percent and mathematics a dismal 19.7.

 

I’ll summarize on a positive note. Education in the United States is not as grim as reported. The focus on inequality distorts the picture. By definition, a school is failing if it’s in the bottom 5% of schools across the state based on combined English language arts and math scores. By mathematical necessity, five percent of the schools in every state must be designated as failing, and this is so regardless of the quality of teaching, the condition of the campus or a positive attitude of the students. If a school falls into this category because a large portion of the student body is not proficient in English, or perhaps not inherently scholastic by nature, or that many must work to help support their family, it will remain a failing school. But despite the stigma assigned to a failing school, there’s no reason why highly-motivated pupils cannot do well in such a setting. Provided no actual hostility to education exists, a reasonably bright and attentive student can master the required subjects and maintain a high academic standing in class. The fact a school is designated as failing need not rub off on those who attend.

 

A final though: If the media would concentrate on the ninety-five percent of schools which are not failing, we’d discover there are many fine institutions, a huge pool of dedicated instructors and a nation brimming with educated youngsters.

 

 

Al Jacobs, a professional investor for nearly a half-

century, issues weekly financial articles in which he

shares his financial knowledge and experience.

You may view them on http://www.roadwaytoprosperity.com