I was away hosting a conference this past Wednesday so asked Ed Moore, CFP® to guest lecture to my students in the Personal Financial Planning course we’re teaching at @RowanUniversity's new School of Financial Planning. Ed is my dear friend and was my #1 at Edelman Financial Engines for nearly four decades- most of them as my president - and there’s no better financial advisor or leader in the wealth management field. So, you can imagine what how great it was for my class to hear from him! Ed spend much of the time sharing career advice, and they were so enthralled that even though class ended at 4:45, Ed didn’t leave until 5:30! And he’s already had several requests for 1:1 follow-up conversations! Funny, I’ve not been asked to hang around til 5:30…maybe I should get Ed to teach the rest of the course!😀 Today's class is devoted to buying an auto - there’s hardly any topic of more relevance to (or interest by) college seniors! #CFP #college #education #financialplanning #buyingacar #autoleasing #autoloan

I made an unsettling discovery in my undergraduate class on financial planning last week. While explaining mortgages, I asked my 38 students this question: if you buy a $400,000 house and pay 20% in cash towards the purchase, what will be the amount that you finance? Not a single student could tell me the answer. Despite the fact that they are all juniors and seniors majoring in business. I added more questions: what is 30 percent of 80? 60 percent of 90? They didn’t know. The closest they got was when one student said, in response to my query of “40% of 70”, that “I know it’s 4 times 7 but I don’t remember what that is.” Another student helpfully added, “28.” They explained to me why they couldn’t answer these math questions: they were never taught multiplication tables, percentages or fractions during their K-12 schooling. Instead, they were taught how to use a calculator. Without one, they are not able to do basic arithmetic. I later asked the dean about this, and he lamented that this isn’t a thing just for our university’s students; it’s a thing for their entire generation, nationwide. When I was in K-12, the fierce debate among parents and educators was whether to allow calculators in class. The calculators won. Today, the debate is about AI. And like before, the tech will win. But will that truly be a victory? Rowan University #college #math #loans #CFP #financialplanning

Completed the second of two classes on taxes in my Personal Financial Planning course yesterday. This one was devoted to strategies that lower/defer/avoid taxes on estates and investment gains, and we covered everything from gifting to tax-loss harvesting. Also dove deep into annuities (explaining - with my disclosed bias of generally hating annuities - why these overly complex products need to be avoided) and municipal bonds (explaining why almost no investor should buy them, other than retirees who spend the interest monthly). It's not what you earn that matters, I taught my students, but what you keep - and I introduced them to the famous 1934 quote from Judge Learned Hand that no one has a patriotic obligation to pay any more in tax than the law requires. They found this point both surprising and reassuring! Monday: their first exam. They're nervous, but I'm confident they'll do well. Meantime, I'm still grading their last homework assignment. @RowanUniversity #CFP #taxes #estatetax #capitalgainstax #education #college #financialplanning

Did the first of two classes Monday on taxes in my Personal Financial Planning course at @RowanUniversity's new School of Financial Planning. Monday was devoted to reducing taxable income. Almost all of my 38 students work part-time as W-2 workers, but none of them have filed a 1040 yet. I explained such ideas as deferring income and accelerating deductions, but the biggest item they struggled to digest pertained to W-9 withholdings. They all listed zero dependents, and I explained that, as a result, they are likely to have far too much money withheld from each paycheck. To fix it, I said, they should file a new W-9 and claim far more dependents. They didn't understand how they could do this since they are unmarried with no children. I explained that the form has nothing to do with truth, and instead is focused on accuracy; the goal is to not get a big refund in April (and not to owe money, either) - and you achieve this goal by claiming the "right" (meaning, accurate) number of dependents. Falsify a federal tax form? They struggled with this notion. I told them that they won't be falsifying anything, and that this is a standard tactic. Go visit a CPA, their HR department at work, or even an IRS office, for help on this, I told them. Just a small example of how bizarre our tax system is, and how ordinary consumers struggle to manage their tax planning effectively. Millions of Americans give the IRS an interest-free loan because of this! Tomorrow, I'll give them strategies to lower taxes on their investments (yeah, I know, they don't have any investments yet, but they will one day - and their parents already do). So, tomorrow will be a great conversation. #CFP #taxes #CPA #college #financialplanning

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.@RowanUniversity's support and enthusiasm for the new School of Financial Planning has far exceeded my expectations. They've created an entire suite for SFP on the 3rd floor of the Rohrer College of Business at Rowan University: it has a large reception area, conference room that holds 12 (which I've already been using for lots of meetings), a catering kitchen, 4 offices and a very large configurable meeting/event space complete with workstations that students are already using. Just last week, Edelman Financial Engines held a 2-day offsite there with management and a dozen financial advisors (topped off with a private showing at the Ric & Jean Edelman Planetarium). They assigned me Office 305E (the others in the suite will be filled by the faculty we're busy hiring) and outfitted it perfectly with all essential furniture and gear. I'm pretty much living in it Mondays-Wednesdays each week. And they just installed the name plate outside my door, identifying my residency. So, I'm official! I just can't express my thanks sufficiently to the entire Rowan team who have been so thoughtful and helpful. And that's why I haven't said anything to anyone about the name plate. Mistakes happen - and the best ones are both ironic and funny. So, I love my door plate - it helps keep my ego in check! Go Profs! #college #CFP #financialplanning #proofreading #typos

Wednesday's class on insurance was fun. I gave my students lots of mind-blowing content, including: insurance (not stocks! not AI! not crypto!) offers the best ROI potential (because a 20yo who buys a 500k life policy for $300 and dies the next day earns a 166,000% return - with only one small detail, of course😆); that even college students need life insurance (because the average funeral costs 8k - do they really want to saddle their low-income parents with that burden on top of their grief?); that 1 in 4 students will incur a disability lasting 90+ days prior to age 65; that the more expensive a policy is, the more likely it is you'll file a claim (meaning: don't avoid policies merely because of the cost); that they need to buy LTC insurance on their parents (because it's better to spend 7k/yr on premiums than 10k/mo on a nursing home); that Batman doesn't need life insurance (despite the fact he engages in high-risk activities, Bruce Wayne with no spouse or children - and Ward Dick Grayson and faithful butler Alfred will share his gazillion-dollar estate) but guess who does need life insurance? Homer Simpson! Because Marge is a stay-at-home parent raising 3 young kids - meaning insurance is all about need; that P&C agents and L&H agents hate each other's businesses (explaining why they do what they do and not what the other does. It's dumb, but it's true) and a lot more - on auto, homeowners/renters, umbrella liability, Officers & Directors, and even K&R (the biggest mind-blow of the class). Yep, there really is a thing called Kidnap & Ransom Insurance!😳. My Personal Financial Planning course in the School of Financial Planning at @RowanUniversity is moving along nicely, I'm relieved to say. #CFP #college #financialplanning #insurance #lifeinsurance

Monday’s class yesterday was devoted to crypto. In a prior post, I told you that all my students are juniors and seniors majoring in business, and that nearly every one of my 38 students have a brokerage account (most commonly at Robinhood) But I learned yesterday that only 4 of them own bitcoin! So, they were all brand new to blockchain technology, despite claims I’ve long heard that today’s youth are most interested in crypto than the stock market. In class, I explained why crypto is such a big deal, and introduced them to the four key subjects: store of value, stablecoins, programmable money, and tokenization. Also showed them how adding crypto to a diversified portfolio historically improved the MPT statistics: improving returns while reducing risks. I also covered crypto fraud and emphasized DYOR (do your own research) - a phrase they already knew (to my relief!). Next up in tomorrow’s Personal Financial Planning class here at @RowanUniversity ’s new School of Financial Planning: Insurance - arguably the most important topic in the entire course. #college #CFP #financialplanning #bitcoin #crypto Digital Assets Council of Financial Professionals