Conquering a mountain of student debt

The financial realities of tertiary education are seeing increasing numbers of students having to take out loans in order to fund their education; this coupled with the fact that jobs are harder to come by and cost of living expenses continue to climb, means it is taking students far longer to conquer their mountain of student debt.

Cause of the problem

The cause of the problem is substantial increases in the cost of education in the last decade, exacerbated by poor money management skills. The increase in the price of education has resulted in many matriculants abandoning their dreams of furthering their education while others, in order to study further, can trap themselves in debt many years before they’ll ever draw their first salary cheque.

The National Student Financial Aid Scheme (NSFAS) has paid out in excess of R9-billion in bursaries and loans. Although the uptake of loans is at an all-time high, the organisation recovers a mere R400-million a year in student repayments. High unemployment rates in South Africa are thought to be the main cause of this poor recovery rate. And with delayed payments, students are having to pay increasing interest on the borrowed sum – a state of affairs that could easily spiral out of control and lock young adults into a debt cycle for many years to come.

But it isn’t all doom and gloom. It is possible to minimise the negative impact on a student’s financial future by following these 8 tips.

  1. Know the costs involved. It is important that students who take out student loans are aware of the costs involved and make sure they are informed about how to structure a repayment plan. To avoid any nasty financial surprises down the line it is imperative that you understand, fully, the real costs associated with furthering your education: not only course fees, but additional expenses like textbooks, registration fees and technology which could include laptops, tablets and other study equipment associated with your studies. Draw up a budget when you graduate and include a payment schedule that will see your loan paid off within four years.

If you would prefer to take out a smaller loan for the odd item here and there, cash loan providers like wonga.com offer small loan amounts repaid over a shorter period of time.

  1. Get a handle on your lender. Never touch a loan unless it is provided by a well-known, registered bank or institution. Always speak to your bank first for sound financial advice.
  1. Quick question: What do you owe? You should be able to answer this question immediately and without hesitation.
  1. Make a plan. Your regular payments plan should be set out by the time you graduate. If you understand the full terms and conditions of your loan, you will know that missing a payment will result in additional interest being charged on the loan, resulting in your debt growing instead of diminishing over time.
  1. No pain, no gain. It’s a fact of life. You will need to forego spending money on luxuries and trend items until you have paid off your loan. Practice good financial discipline from the start; you’ll avoid paying out extra interest on delayed payments.
  1. Consistency is the name of the game. You may not have had much luck yet trying to find a job but whatever you do, never stop paying your loan. In the real world, your grades are not the only score you need to worry about – your credit score has the power to seriously hurt your financial future. These scores are often used by insurance companies to determine your risk profile which could see you paying higher premiums, as well as prospective employers who can use your score to gauge your level of financial responsibility. So, contact the lender and arrange an affordable repayment solution. But do not stop paying altogether!
  1. Keep your lender on speed dial. You could be penalised if you change your phone number or address without telling you lender so make sure you stay in touch until that loan is paid off.
  1. If in doubt, ask. A Certified Financial Planner can help you with the entire student loan process so if you have any doubts, you do not have to go it alone.

Student loan resources:

For a list of bursaries and scholarships see here

The National Student Financial Aid Scheme (NSFAS) is the South African government student loan and bursary scheme. They provide loans and bursaries to students at all 25 public universities and 50 public TVET colleges throughout the country.

Eduloan is an education finance specialist operating in Southern Africa. Since 1996 they have awarded over 750 000 study loans to the value of more than R4 billion.

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Getting Started in House Investing

Begin little to minimise danger

When starting any new venture there is an component of danger. This risk is present due to absence of experience, and absence of knowledge. However, the best way to discover is to get began and learn as you go, dealing with challenges as they come. Only ever invest what you can comfortably pay for to lose, then you will always rest at night.

Investment Property Risk

The risks of investing can be sizable, and require to be regarded as when you are operating out your beginning strategies. Especially in the monetary sector, regulations are set in location that penalise the investor for modifications in technique (eg selling 1 asset and buying another, or break up of a partnership and so on). For example, when you sell an investment house, the penalties you pay include:

Richesse Gains Tax
Commissions to the actual estate agent
Bank fees for discharge of your mortgage
Legal Fees

These fees (dangers) could variety from minimum to tens or hundreds of 1000’s of bucks (or more).

Share market risk

When you invest in the share marketplace, the penalties you spend are mainly brokers charges, and these will reduce your earnings, particularly if you sell before your shares rise in worth.

Other risks from property and shares consist of: actuel damage, repairs, home loan interest (especially if interest rates rise), and margin calls (charges the financial institution charges you if your shares drop in price and you have borrowed against them)

Starting small involves purchasing an inexpensive first investment house, or investing in the share market (or other asset course) with an quantity that you can easily pay for. Is it dangerous to be highly leveraged (borrow significantly in opposition to an asset) when you initial start investing. Similarly when beginning a business, think about starting little and creating your company while you discover. Borrowing seriously to begin a company can also be extremely risky (we have all heard that 80% of businesses fall short in the first 5 years!)

By beginning little, you can allow your first investment to develop, and then re-invest the capital (profit) into your next investment (either by promoting and realising the gain, or by borrowing against the equity.

How to get started?

The best way to start in any enterprise is to discover as much as you can initial, and when you are satisfied with your training, buy the greatest investment / company you can easily purchase at the time. It will most likely be the worst investment you at any time buy, but getting started will be the greatest investment you at any time make. Don’t be afraid to take motion – if you by no means really purchase an investment, then you are never going to be an investor.

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In Our View: Life Sciences Discovery Fund Investing in jobs, health

In Our View: Life Sciences Discovery Fund Investing in jobs, health

Investing in jobs, health. Sign up for HeraldNet Headlines. See sample | More Newsletters. advertisement | your ad here. Nothing rattles government skeptics more than untethering a funding source from its intended goal. Think fuzzy math, a breach of
See all stories on this topic »

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Stock Investing For Newbies.

Prior to you can begin investing the initial thing you ought to do is make an assessment of your personal monetary position. Prior to you can invest in anything you need to have the essential richesse accessible. Perhaps the best way to tackle issues would be to checklist all your belongings i.e. real estate, cost savings, money, mutual funds and so on set against this your liabilities mortgages, loans and` credit card financial debt, this will give you an indication of the amount of capital you have accessible for investment.

Prior to you think about any type of investment it is a lot much better to distinct high charging debts especially if you are not using them to acquire an appreciating asset, such as the mortgage on your house. Credit cards, especially shop cards and personal loans with greater monthly payments ought to be paid off before you consider investing richesse in the stock marketplace.

As soon as you are certain that you have capital available for investment in the subsequent thing is to decide on your danger level, or to place it an additional way the amount of volatility in the stock price that you can reside with, and still be in a position to rest at evening! The general guideline is that the greater the risk the greater the potential acquire, that is why you ought to only commit in the stock marketplace with capital that you do not require for instant every day requirements. If you are only ready to consider a low danger and are pleased to take a correspondingly low return Money Marketplace Money would probably be most appropriate for you, the stock marketplace nevertheless provides the possible for a a lot higher acquire with a correspondingly higher danger.

Once you determine to start investing take it gradually at the starting, only commit part of your capital preferably no more than 20% in one or two stocks, this will permit you to get the really feel of things without risking everything, you may also wish to diversify your holdings and have a combination of shares and bonds and mutual money this will have the effect of decreasing your risk and of program will also reduce your potential reward.

The actual mechanics of investing in shares or mutual funds is extremely simple to do, online there are numerous investment services that offer up to date information about stocks and as soon as you are ready to commit it is very simple to find and no-frills on-line stockbroker who will work to 1 very reduced commission rates. If you require much more information and a higher degree of service you can always use of complete-services stockbroker but of program this will involve considerably greater costs.

Offering you take the time to completely investigated the topic prior to you commit your hard attained capital, stock marketplace investing can be very rewarding even for newbies.

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Dividend Investing Abroad – Yahoo! Finance

Dividend Investing Abroad – Yahoo! Finance

From Yahoo! Finance: As investors pile into U.S. dividend-oriented stock funds, it might be time to look farther afield.
finance.yahoo.com/…/dividend-investing-abroad-160000339….

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Your Questions About Invest In Gold Or Silver

Charles asks…

will the prices of gold rise in nearer future probably ?

What will be proper to invest ingold or silver to gain more profit ? plz.

Justin answers:

I think the prices of Silver will be more in the future and the chances of gold looking that it will be stable.But hike will be in silver more than gold.

Paul asks…

Should I Invest in a bond portfolio or a mixed bonds stock and shares portfolio?

with no upfront cost ….

Or should I invest in gold and silver?

Or what should I invest in to protect my money against inflation??

thanks

Justin answers:

Gold and silver are bubbles in the making. I can’t tell you when the bubble will burst, but it will happen. Bonds have very low yield, but you will want to keep some money in bonds to dampen volatility of your portfolio. For a simple portfolio, I would suggest 60% in the Vanguard Total World Stock ETF (ticker=VT). The other 40% in Vanguard Mortgage-Backed Securities ETF (ticker VMBS).

VT is the ultimate in diversification, investing in the global stock market. A global stock portfolio is a decent inflation hedge, and better than the current alternatives. VMBS has a relatively good yield at 2.9% but low duration (meaning not much exposure to rising rates / inflation).

If you have a lot of money to invest, get professional help by finding a NAPFA advisor.

James asks…

i am think of investing in gold and silver. the first company i am going to look into is scottsdale silver.?

are there any other companies out there ( In the U.S. or outside it doesn’t matter) that are as good or better than scottsdale because so far i have heard they are the best.

Justin answers:

Not real familiar with the metals sector…but getting interested because some pretty good investors I know are ” talking up ” CEF…… An ETF I’m going to look into….give it some thought.

John asks…

Are my childhood comic books a good financial investment?

I’ve been reading alot about investing in gold, silver, business ventures, and shares of stock. I know that comic books, like baseball cards, can change (usually increase) in monetary value. I have over 2,000 comic books from my childhood and most are in mint or close to mint condition. Are these comic books a worthy investment?

Justin answers:

If you’re studying investments, the very first thing you should learn is that collectibles such as comics and cards and what not are NOT the same as investing in silver and gold or stocks or properties. I believe they are called “soft investments”, and trying to treat them the same way as you would investing in stocks and the like is fool hardy.

Some of the people answering have no idea what they’re talking about. People think that just because some comics have gone up in value, all comics will, and that’s simply not the case.

The exact value of your comics will require you to research what exactly it is you have. As a rule of thumb, comics from the 80s and 90s are virtually worthless, and almost certainly worth significantly less than you probably paid for them originally. If the comics are from the 1960s and earlier, you’ll almost certainly be looking at a decent sum of money. Most comics from the 70s are also worth a fair amount, but significantly less than most of the ones from the 60s, depending on which specific comics you’re dealing with.

If you’re dealing with a collection from the 80s and 90s, find someone who knows a thing or two about comics just to check to see if you have one of the 2 dozen or so comics from that time period that gained value (Amazing Spider-Man #298-300 is the most likely). The best thing to do with the rest, which will more or less be worthless, is simply call a local comic store and see what they think. Most likely, you’ll only be seeing a couple of cents apiece if this is an 80s/90s collection.

In the 1940s, 50s and 60s, comics were seen as disposable pieces of entertainment. Kids would read them, maybe pass them around amongst their friends, handle them roughly, fold the pages, cut out pictures they liked, and eventually throw them away (or their mothers would). They were the same as a newspaper or a magazine, they were not collectors items. Well, in the 1970s, the first comic book conventions started up, as the comic book readers had grown from kids into adults and hadn’t given up the hobby. At these comic conventions, people began to sell their old collections, and seek out comics they’d heard of but never read, or read when they were younger but had been thrown out. All of a sudden, there began to be a demand for comics which had been printed 10, 20, 30 years before, and very few copies were left. Hundreds of thousands of issues might have been originally printed, but since they were seen as disposable, only a few hundred copies were left, with thousands of collectors looking for them. (Action Comics #1, the first appearance of Superman, has only 75 remaining copies left known to exist, for example, and most of them are beat up).

Well, you know what happens next, basic supply and demand. Someone was a Fantastic Four fan and wanted issue #1, which had a ten cent price stamp. They found a dealer selling a copy for a dollar. Then someone else offers to pay $5, then someone buys it from them for $20, and so on and so forth, until the rarity and desirability has been established and today that comic sells for tens of thousands of dollars. Because there are only a handful of remain copies and thousands of fans who’d like to have it.

Then people started to get into the mentality of “Hey, if those older comics are worth a lot of money now, maybe today’s comics will be worth a lot some day too!” They began holding onto their comics, keeping them in good shape. More and more people started doing this. Some people started buying multiple copies of the same comic. This whole situation peaked in the early 90s, when comics like Spawn #1 and X-Men #1 sold MILLIONS of copies, even though only a few thousand people were actually buying them. They were treating comics like stocks, which they are not. They completely eliminated the possibility of those comics ever being rare.

Comics from the 80s and 90s are extremely common and far outnumber the number of people who actually read comics these days. Therefore, they will never be worth money. Not in 10 years, not in 20 or 30. Comic readership declined, and hundreds of stores across the country went out of business. The only ones who stayed in business were the ones who were well managed and didn’t buy into this whole process. My local store has done very well for itself because the owner was a business major and knew to avoid these traps. Over the years, as other stores in the region have gone out of business, their stocks have come to my store. I’ve been in their basement, and have seen the close to a million comics they have down there – all virtually worthless. The best they can do is put in the discount bin for a few cents and hope that some of them will sell so at least some money is made off of them.

Also, your books are not in mint condition. “Mint” refers to an impossibly high and rare standard that you have to have years of experience grading comics to assess. I’ve been collecting comics for 20 years and I wouldn’t call a single one I own “mint”. At most, many mat be in “Near Mint” condition, but many are probably in the next tier down “Very Fine.” It’s usually a pretty tell tale sign that someone doesn’t know what they’re talking about when they call their comics “mint”. It’d almost be like a bowler bragging about the time he scored 310. Just FYI.

Robert asks…

Should I buy gold or silver for and investment?

Should I buy gold or silver for and investment?

At this time or in the future would Gold or Silver be a good investment against inflation? Or should I invest in Oil?

If all of those are not good options at this time, where should I invest my money to protect myself against inflation?

Justin answers:

Gold, silver and oil are risky right now because of their price.Plus they pay no interest.

Cash deposits (CDs) are insured to 100k at most banks. They pay more interest than the inflation rate, so they fit your request. Check Bankrate.com for best rates.

Another idea are ibonds. These will increase in value if inflation increases. You can buy these from fed directly.
If you prefer you can buy TIPS from Vanguard. The Vanguard TIPS fund has a yield of 2.40%, plus inflation protection.

Also, if you want10-15% in stocks (which will rise over time), you can buy Vanguard’s total stock market index fund . All stocks in us market (5000+) are in the fund. So, the fund is very diversified. That means if a single stock goes down it will not hurt you.

Here’s what i would do
10-50% stocks (vanguard total market index)
10-20% Int’l stock fund (vanguard int’l market index fund)
10-30% TIPS or ibonds (from vanguard or treasury direct)
10-50% CD’s (from a bank)

Mark asks…

Should I buy gold or silver for and investment?

Should I buy gold or silver for and investment?

At this time or in the future would Gold or Silver be a good investment against inflation? Or should I invest in Oil?

If all of those are not good options at this time, where should I invest my money to protect myself against inflation?

Justin answers:

Stay in cash – even at zero percent interest.

The market’s going to tank Monday and, when the Federal Reserve announces support measures Tuesday it’ll rise Tuesday. But this’ll be short-lived. The underlying problem is that there’s too much debt and too much of it is underpinned by real estate which is falling in value.

So, don’t buy Monday. Sell Tuesday….early. And wait.

Ken asks…

when you buy a gold coin what is the appropriate increase on the point where it is?

when I bought my coin gold was at 670 aprocamatly they charged me 10 dollars so I paid 680. Now when I retured gold what still again at 670 so I expected to pay a 10 dollar fee, this @#%C$% said Ill give you 540 for it , he then said how am I supposed to make a profit , I had to bargain with him like I was in tijuana. he gave me 630 . he is the only gold dealer in town is he useing his monoply or what when I lived in salt lake whether you bought or sold they would charge the same sellers finders fee , which is fine but 540! what s the point of even investing in gold or silver. I think he is just a crook or am I wrong?

Justin answers:

Your local dealer was definitely trying to scam you.

Dealers make their money, not on the price of the metal, but from a premium they charge at time of purchase or sale. They make money on both sides of the transaction, which is very typical and acceptable. Normally you can expect to pay an extra 2-2.5% at time of purchase, and a little less when you sell it back to the dealer. This really depends on the type of metal (gold, silver, platinum, palladium). I would definitely look for another dealer.

You should consider going to local coin shows, or give eBay a try. Lots of precious metals are bought and sold each day on eBay with great success. Keep in mind that between eBay and PayPal fees you could lose about 10% of the sale price.

My suggestion would be to check the yellow pages for another dealer, or check out online brokers such as www.apmex.com. American Precious Metals Exchange (apmex) both buys and sells gold and silver. Another source is Bullion Direct at www.bulliondirect.com. Both sites will list the current spot (market) prices for the metals. I’m not affiliated with any of these companies, but know several people that use them. They’ve been around for quite a while, and are very reputable.

Good luck to you!

DJ

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