Let’s Talk About it…

Many college graduates face a tough decision early in their working lives: pay off student loans or save for retirement. It’s a financial tug of war between digging out from debt today and saving for tomorrow, both of which are very important goals.

Recent graduates might enter the workforce with little more than their diplomas and student debt averaging about $37,000.¹ This equates to a monthly payment of $392, assuming a 5% interest rate and standard 10-year repayment term. (For reference, the 2018–2019 interest rate for undergraduate federal Direct Loans is 5.045%.)

As young adults adapt to living on their own, they must juggle their student loan payments along with other financial obligations such as rent, food, and transportation. Let’s face it, putting aside money now to use in four decades may not seem compelling when loans require immediate attention.

The typical repayment term for student loans is a long 10 years. Waiting until loans are fully paid off before starting to save for retirement can mean missing out on years of potential tax-deferred growth in an employer-sponsored retirement plan or an IRA. If your employer offers a match, consider contributing the minimum amount to get the match, then try to increase your contribution amount as you can.

The one thing young adults have on their side is time, and that time is valuable on the retirement front. Consider two adults: One starts saving $300 a month toward retirement at age 25 for 10 years, and the other starts saving the same amount at age 35 for 10 years. After the 10 years, assume the money simply sits in the account until they reach age 65, earning a 5% annual rate of return. Both adults have contributed the same $46,585 amount, but at age 65 the 25-year-old would have $208,130 and the 35-year-old would have $126,368 — a difference of more than $80,000. (This is a hypothetical example of mathematical principles and is not intended to reflect the actual performance of any specific investment.)

What about paying more toward student loans each month to pay them off faster versus contributing those extra funds to retirement? If the interest rate on a student loan is relatively low, the potential long-term return earned in a retirement account may outweigh the benefits of shaving a year or two off student loans.

Realizing the dilemma that many young employees face, a handful of employers are offering student loan benefits, such as a specific amount toward student loan payments or an enhanced retirement plan match when employees contribute a designated percentage of their salaries toward repaying student loans.² Watch for these benefits to grow in popularity as student debt impacts an increasing number of young workers.

1) MarketWatch.com, May 12, 2018
2) Employee Benefit News, July 5, 2018

This information is not intended as tax, legal, investment, or retirement advice or recommendations, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Broadridge Advisor Solutions. © 2018 Broadridge Investor Communication Solutions, Inc.

Unless you’ve been hiding under a rock, you could not have missed the headlines regarding the recent college admissions scandal. Actresses, business leaders, and other wealthy parents have been charged with college entry fraud. I think it’s actually quite ironic if you think about it. If you have to cheat to be admitted to a particular school, you probably don’t have the credentials to maintain the academic rigor of that particular college or university. I wonder if the parents who committed college entry fraud ever considered whether the school they cheated or bribed their child’s entrance into, was really the best fit for the child. Did their egos take precedence over rational thinking?

I believe God has a plan for all of us. I also believe he blesses hard work and perseverance. On the other hand, I’ve never heard of a success story from someone who cheated their way to the top. Cheating or lying always unravels at some point. This story is an example of how cheating, bribery, and lying eventually brings disgrace to the guilty party. It also causes unnecessary embarrassment and leaves people with emotional scars for the rest of their lives. Friends, it’s just not worth it.

I hope this sensationalized scandal actually reduces the pressure valve that many parents feel to help their children get a college education, no matter what the cost. I hope it reminds parents that cheating and lying will never benefit them or their children in the long run.

Another issue this story brings to light is the financial pressure on parents to pay for the rising, and often unaffordable, cost of tuition at elite universities. Some parents are sacrificing their sanity and their retirement in order to make sure their children have a prestigious college education. The reality is, there are many ways to obtain an education. Parents, please pause and consider the following:

• Your kids can work simultaneously while attending classes at a university. This may also allow them to get practical real-world experience.
• Do not overlook the opportunity to research the plethora of scholarships and grants available today to your children.
• There is no shame in attending a trade school if your child needs specific skills for their desired profession. Examples include culinary school, cosmetology school, dental hygiene and some nursing programs, graphic design, welding, electrical, plumbing, and a computer technician.
• Many trade professions would allow your child to be self-employed and own their own business.
• Consider enrolling your child in a community college for a couple of years in order to get basics out-of-the-way at a fraction of the cost.
• Encourage your kids to live at home in order to avoid expensive fees for dormitories, or rent for an apartment.
• Attend in-state universities rather than private, or out-of-state schools.

There are many ways to obtain an education without breaking the bank. Just like the cheating scandal, sacrificing your future financial well-being during your retirement years, ultimately ends up punishing the child you were trying to help. If you don’t save and prepare for your retirement years, you most likely will become a burden financially to your adult children.

In a perfect world, you would start saving in your 20’s or early 30’s, and prepare for both financial goals. Parents would have a savings plan for future education expenses for their children, and would also be steadily and systematically saving for retirement. That is the best case scenario. However, many people do not have this luxury.

If you have to choose between saving for college for your children and saving for your own retirement, please choose to save for retirement.

Remember that your teenager or young adult in their 20’s has time on their side. If they have to get a student loan, they have many years to work and repay the loan. However, please discuss options with your kids about different avenues for obtaining an affordable education. Remind your children that it is beneficial to both of you for their parents to have financial security in the future. That is the best possible outcome. For more information on how to best plan for your future, please visit me at: http://www.emilygstroud.com #FaithfulFinance

What if you and I are not actually broken or damaged?

What if God designed us perfectly to do His work? I’ve wrestled with this a lot over the years. What if God designed us uniquely and perfectly, flaws and all, for the specific purpose He has for each and every one of us?

In today’s age, personality differences may be labeled “mental illnesses” or something to be fixed. Over the years,  I’ve been labeled emotional, anxious, an insomniac, a workaholic, a Type A personality, a 1 on the Enneagram chart, highly intelligent but quirky, eccentric, OCD, and I’m certain other labels I would rather not know about it.  I’m also passionate, I love God, and I enjoy solving problems and helping people transform their lives from a financial standpoint. I love deeply and fiercely, and I fight until the end.  I rarely give up.  I go down swinging.  I give life everything I have. I’m all in.  It doesn’t matter what subject we’re on: parenting, my marriage, friendships, real estate transactions, businesses I own and manage, books I write, or other projects I entertain. I give life, my family, and my work everything I have, even when it affects my health.

The older I get, the more comfortable I am in my own skin. 

What if we’re not actually broken or wired incorrectly?  I used to wonder why I couldn’t sit still.  Why was I never content with the status-quo?  Why was I happiest when working on a project?  Why did I have trouble sleeping at night but needed a nap during the day to function at my highest level?

I’ve been to therapists and physicians to figure out what is wrong with me.

You know what I’ve learned?  This is me.  And maybe it’s you too. My brain works over time. I analyze everything. I’m honestly not afraid of trying new things if the potential reward justifies the risk.  Sometimes things don’t work out.  But sometimes they do!  I love closing a deal, negotiating a transaction, and selling a dream.  I come by some of these traits naturally.  Nobody in my immediate family has a regular 9 to 5 job.  It’s just not how we are wired.  That doesn’t mean we don’t work hard. Trust me, we work extremely hard and we have multiple projects and balls in the air at most times. We just have to be our own boss because we’re entrepreneurs by nature.  It seems to be passed down from generation to generation in my family.  Honestly, we’re all probably manic and great candidates for a psychological study. The good news is that it really doesn’t matter.

What if what we thought was our “crazy” was actually how God made us to do His work in such a time as this? 

Maybe there’s nothing wrong with me at all.  Maybe there’s nothing wrong with you either.  Maybe you’re more even-keeled than I am. I admire you and I know that you’re steady and exactly who God designed you to be. The body of Christ is made up of all kinds of personalities. I honestly believe that is His perfect design. There is such peace in knowing we are not designed by accident. 

How would our lives change if we accepted ourselves and others exactly as we are?

I’ve been researching and studying this phenomenon more and more lately. It’s like when you buy a red car and suddenly you see a red car everywhere you go. Entrepreneur magazine recently wrote an entire article about this exact subject. The article claims: “There is a dark brilliance of an entrepreneur’s brain. The exact qualities that label them as crazy, allow them to persevere against all odds, to do amazing things in unique ways that end up changing the world.”  Interesting, huh?

What if each type of “mental illness” had a positive side?

Another example of this phenomenon is dyslexia, which is classified as a mental disability.  Dyslexia has also touched a member of my family.  A teacher recently told me and a group of parents to stop asking God to change our child and take away his or her dyslexia. Instead, change your personal paradigm. Start seeing and believing that dyslexia is a gift.  It’s how God wired your child and the very quality that will shape them into the human being that will go farther, higher, and wider than you ever thought possible.

Dyslexia causes a lot of problems when learning to read. However, it allows a person to see the world through a different lens. Dyslexic people are often entrepreneurs, engineers, inventors, and creative types that make a difference in the world that those of us who are not dyslexic will never get to experience.  Interesting, huh?  What could be seen as a disability is actually a super power. Sometimes our ability to look at life from an upside down and backwards perspective changes us and changes the world in a positive way.

What if your mental illness, disability or challenge was actually not an illness to be cured?

If you truly believed this, how would it change you?  How would it change your family?  How will it change the world?  I would love to hear your thoughts today.  If you have ever wrestled with wondering whether or not you were broken or “not quite right,” please know that you are not alone.

To illustrate my point further, Faithful Finance was born out of a place of “crazy.” To be honest, it was highly unlikely that anyone would take me seriously. You know what though, they did.  It took a lot of time and a lot of work, but eventually a little East Coast publishing house called Zondervan Publishers took it very seriously.

I was and still am, a no-name, female, wife, mother, and Financial Advisor from Texas.  However, I wrote a nationally published book explaining Modern Portfolio Theory, while simultaneously reminding people that a relationship with Jesus Christ is the best life insurance policy. More than likely, if God had designed me with a non-manic, more passive, even-keeled personality that slept better, I would never have entertained the idea of writing Faithful Finance. Please do not misunderstand me.  I’m not bragging.  I don’t take credit for God’s plan for my life. I’ve just tried to be obedient to the special purpose He has for me based on how he designed me in my mother’s womb. My personality has not changed since I was born. I want to encourage you to do the same. Figure out who you are and embrace it with passion and enthusiasm.

Today, I’m excited to let you know that Faithful Finance is coming out with a FREE online workbook just in time for the new year. I want to equip my readers with tools that can help them and their family, personality differences and all, to manage money wisely. By managing your money well, you can live a more fruitful and peaceful life. Stay tuned for more information and announcements coming soon.  #FaithfulFinance

 

 

 

Find your tribe of friends 

Friend look around. Get off your iPhone and stop wasting time staring at a screen. If you’re in college, walk to the other side of campus.  Hang out at the student center.  Sit next to someone new in every class. If you’re at work or at your child’s school, ask people how they’re doing and genuinely listen.

No matter what stage of life you’re in, ask people questions and start a conversation.  Just see where it leads.  Everyone has a story. By engaging others in life, you’ll find the treasured friends who will make you a better version of yourself.

Next to Jesus, friends are the best gift you can give yourself.

Believe it or not, the friends I made in college over 25 years ago are still part of my life today.  When life is hard, they are the ones I call for comfort and encouragement.  When life is exciting, they are also the ones I call. When my book, Faithful Finance, was nationally published against all odds at the age of 43, they showed up to help me celebrate. Why? Because that’s what we do for one another.  We celebrate victories and we sit with one another during difficulties.

Career Milestones

After everyone else left my book launch party, the tribe and I laughed at the absurdity of anyone asking for my autograph. We ate dinner and drank wine and told old stories that may or may not have been exaggerated until late at night.  It couldn’t have been a more perfect way to celebrate a major milestone in my life. Over the years, the tribe has walked many miles chatting and wondering what the future would hold.

Would we get married?  Would we be successful?  Would we find happiness?  Where would we live? Would we have children? Would tragedy strike, and if so, when?  Would we be able to handle what life would bring?

Marriage and Divorce

We’ve seen each other through breakups and dried each other’s tears. Everyone in the tribe kissed a few frogs before finding happily ever after. Eventually, there were engagement rings and weddings when we celebrated and danced until dawn.  We wore bridesmaid’s dresses that we promised each other we could wear again some day.  That was a lie and we all knew it.  No one wears those dresses again. We laugh about it now.

No one story within the tribe is the same.  One member has been divorced. She modeled for us how to come out on the other side of a very difficult situation, both better and stronger. She eventually found her happily ever after as well. She’s now married to her prince charming and an amazing mother of boy-girl twins. She showed us that divorce doesn’t have to define who you are as a person, or limit your future happiness.

Motherhood

Another member of our tribe was the first to become a mother.  I remember my twenty-something self being in awe of the awesome responsibility of being a parent.  I didn’t even feel equipped to take care of my own self at that time in life. I distinctly remember sitting on the floor of her bathroom while giving her baby boy a bath.  I was terrified that I would drop that precious, slippery baby.  He is now 6 feet 7 inches tall.  She reassured me that babies are much more resilient than we think they are. Most importantly, she taught me that you can have a career and be a mother, but you have to find your own rhythm and pace.

Personal Battles

One member of the tribe has battled depression. I feel very protective of her even though she doesn’t need me to do so.  She impresses me now with her quiet confidence. I know how far she has come and how hard she worked to get healthy.  She has built a life with her husband and children while having a career she loves.  She has taught us all to listen to our inner self more, and the noise and expectations of the world less.

There were also struggles with infertility inside the tribe in our thirties.  We waited for positive pregnancy test results that took longer than we had hoped. However, the waiting made the births all the more special.  Members of the tribe, including myself, experienced unexpected health crises over the years and the stress of watching aging parents grow old before our eyes. We’ve also learned to be wives and  mothers through on the job training. We’ve all come to the sobering realization that there is no dress rehearsal for life.

You might be wondering how we have stayed friends for so many years. The key to keeping the tribe together is to be intentional.  We make time for one another.  There are group texts and inside jokes. It’s not easy and often inconvenient to plan a girls’ weekend once a year.  Every time we’re together we pick up where we left off.  It’s as though no time has passed at all.  The best part is we don’t have to retell our stories.  We just know.  And we accept one another as we are. Oh sure, we disagree on things, but that makes our conversations more interesting.  We have different political views, different careers, and even different parenting styles.  None of our differences matter because we have a mutual respect for one another.  Our history and our stories bind us together.  There really is comfort and peace in knowing that no matter what, our tribe will stand together.

Knowing Who Your People Are

My tribe is entering the second half of life.  A lot will  hopefully stay the same, but a lot will have to change.  For example, children are going to graduate high school and leave the nest.  This seems horribly frightening to me.  I’m grateful to have friends a couple of steps ahead of me. They will pave the way for doing this well.  I know they will encourage me and hold my hand when it’s my turn to launch my kids into the world.  I pray that my kids will also find their own tribe of friends one day.

My encouragement to you today, no matter what stage of life you’re in, is to be a friend to others. The best way to have good friends is to be a friend someone else would want. Choose friends who can both celebrate your victories and dry your tears when a dream has been shattered.  Taking the time to build lasting friendships is one of the best investments you can make in your life.

Please remember that the journey of building a tribe never has to end.  You can build many tribes of friends over a lifetime.  I now have other tribes of friends made up of mothers and fathers from my children’s schools.  We are in the trenches together raising kids side by side.  I also have friends from work, friends from church, and even precious neighbor friends who happen to live and do life with me on a daily basis. My life is so much richer for the friends I have made.  I never want to be exclusive and think that my friend circle cannot enlarge. There is an old saying that says: Make New Friends But Keep the Old, One is Silver and the Other is Gold.  I think there is a lot of truth in that old rhyme.  Friends truly are a precious commodity.  #FaithfulFinance