Q: I am a single parent. I will soon be debt-free and then I can set aside a little money for my daughter's college. Should I put it in a savings account or are there better options? I will only have four years to save.
A: Four years is not a long time horizon; however, you still need to be willing to take on some investment risk in order to grow your money.
A savings account will earn very little income at these low interest rates and you will owe tax on that interest income. But a well-diversified portfolio in a 529 plan offers better upside potential. And your earnings would grow tax free, and withdrawals would be tax free when used for college expenses.
In addition to federal tax benefits, many states offer tax deductions for 529 plan contributions. But some of the states are considering reducing or eliminating the tax deduction as they grapple with mounting budget deficits. Investors need to be very careful in choosing their own state's 529 plan solely on the basis of a state tax deduction that may or may not be there in the future.
It's wise to shop around before you choose a 529 plan. One of the best sites to compare and contrast plans is http://www.savingforcollege.com/. It provides a 5-Cap rating for each state's 529 plans, based on such things as performance and risk. A 1-Cap rating is the worst and 5-Cap is the best.
That four-year time horizon makes your asset allocation challenging. It requires you to look more at the investment markets and be willing to make investment choices that might go against popular logic.
For example, you would naturally consider an age-based portfolio option or bonds and cash as your most conservative options. However, with interest rates at record lows and the possibility that they will rise over the next four years, you would be investing in bonds at exactly the wrong time, because bond prices fall when interest rates go up.
And an age-based portfolio for an 18-year-old would be weighted heavily in bonds and cash. Given the real possibility that interest rates will rise, you might need to put more of your 529 plan into stocks to avoid the interest-rate risk in bonds.
You could place it in stable value funds, but your returns would be meager over that time horizon. Stocks, given all the volatility, have produced the best long-term total returns, but it requires taking a bit of risk.
If your daughter goes to a four-year college, you could continue to invest inside the 529 plan while she attends college, so presumably your time horizon is longer than just the four years she has until she begins college. In addition, many kids take a gap year after high school to travel and save money for college, which may give you an additional year to grow your investments.
John Gugle, NAPFA -registered financial adviser
Alpha Financial Advisors, Charlotte
Stimulus money boosts Florida reef restoration - Palm Beach Post
The Associated Press
Updated: 12:36 p.m. Saturday, June 2, 2012
Posted: 10:51 a.m. Saturday, June 2, 2012
KEY LARGO, Fla. — Coral reef restoration along Florida's shores has been getting a boost from federal stimulus money.
The American Recovery and Restoration Act of 2009 provided $3.3 million to grow about 30,000 threatened staghorn and elkhorn coral colonies in underwater nurseries. About 10,000 of the fast-growing corals are being transplanted in eight areas along a 300-mile reef tract from Broward County to the Florida Keys, and in the U.S. Virgin Islands.
The goal of the transplants is to spawn tens of thousands more coral colonies.
"We're just giving them a jump start," said The Nature Conservancy's James Byrne, the marine biologist overseeing the three-year project.
"Now, if they can successfully reproduce, it will blow away anything we can do," he told The Miami Herald (http://hrld.us/JCwSEm).
The money was part of $167 million given to coastline restoration projects; the entire stimulus package totaled $831 billion. The funding, which created or supported 56 jobs, ends in December.
"Before, most coral restoration efforts focused on places with large (vessel) groundings," said Sean Morton, superintendent of the Florida Keys National Marine Sanctuary. "This is the first attempt to do it reef-wide and turn around a long-term trend of coral reef decline."
Scientists say staghorn and elkhorn coral populations have declined by about 90 percent throughout the Caribbean over the last 30 years. Many factors have contributed to the decline, including a die-off of algae-eating spiny sea urchins, disease caused by bleaching from rising water temperatures, ocean acidification, water pollution and hurricanes.
"If you went snorkeling or diving anywhere in the Caribbean in the early '80s, you'd see corals everywhere," Byrne said. "Staghorn used to be the dominant one on the reef, providing almost all the habitat for small juvenile fish to go into. And elkhorn dominated the top of the reef, building big reef crests that waves break on."
In 2006, elkhorn and staghorn were the first corals to be put on the threatened list under the Endangered Species Act.
"Staghorn is a thinner branching colony that looks like the thin antlers of a young stag," said Erich Bartels, coral science manager at Mote Marine Laboratory. "Elkhorn looks like big moose antlers that go out in a big fan shape."
Both corals are important to Florida's ecosystem and economy, scientists say.
"This is restoring nature for people's sake. These habitats are nature's infrastructure," said Rob Brumbaugh, The Nature Conservancy's director of global marine restoration. "We're making fish. When you make fish, you make jobs. It's a good investment."
___
June 02, 2012 12:36 PM EDT
Copyright 2012, The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Money and passports: Is George Zimmerman's plight racial? - HULIQ.com
Shouts of injustice may calm some down now that Travyon Martin’s shooter George Zimmerman has to report to jail in the next two days.
A judge has given Zimmerman 48 hours to surrender. The judge also revoked Zimmerman's $150,000 bond.
Zimmerman failed to report $200,000 raised and stored inside his PayPal account. He and his wife discussed the evasion during jail phone calls. The two used a special code to deceive listeners and discuss the funds.
A Florida judge ruled that Zimmerman’s deceit merits revocation of his bond. Furthermore, Zimmerman’s second passport was discovered.
Some argue that his $200,000 should not be included as personal finances because that money goes to his attorneys. Others say that Zimmerman’s lie, or attempted cover-up, really harms Zimmerman’s chances at trial. They asked how can a jury believe a man who hasn’t been honest with the courts?
Others have defended Zimmerman’s two passports, explaining that he likely lost the first and ordered a second. Still, wisdom, based in logic and the law not race, dictates that if Zimmerman’s second passport was needed because he lost the first, then an honest man would have reported recovering the first lost passport.
Zimmerman’s last name, particularly European, and Trayvon’s first name, particularly African American, have set off a string of events that have pit race and parties against each other.
Many older members of the African American community believe George Zimmerman wasn’t charged with murder immediately because his victim was black. A number of African Americans and lawyers for Trayvon Martin have stated over and over that had Martin been the shooter, Martin would be in jail.
Those on the opposite end of the race spectrum, those who believe Zimmerman is a white victim, are also prominent debaters in the Trayvon Martin shooting. Many argue that Zimmerman’s hope rests with Republicans and gun lobbyists who believe in Stand Your Ground and the right to bear arms in this country as long as the owner has a legal right (permit) to carry the weapon.
Others point to an African American President who has made only one comment on the Trayvon Martin shooting. Weeks after the murder and about a week after Trayvon Martin’s death saturated cable news, President Obama told the world that if he had a son, his son would look like Trayvon. These “others’ argue that Zimmerman’s become part of a federal “witch hunt”--a sly reference to Department of Justice Deputy Eric Holder, also African American.
Communities, black, white and other, have all cried “Justice for Trayvon” thus shunning any and all notions that they’ve gathered in Trayvon’s Martin name to race bait. For many, Zimmerman’s trial is about justice, not race.
Zimmerman shot an unarmed African American 17-year-old. His lawyers will argue self-defense. The 17-year-old had THC in his system. Zimmerman had been on a prescription drug that warns of upset to the psyche, particularly with moods that cater anxiety and aggression.
What his trial and the what the law mean to George Zimmerman isn’t clear. Past behaviors, inc luding a scuffle with police that merited a mug shot and criminal record suggest that Zimmerman has had problems with authority in his past. Lying about his finances has cast an old light on Zimmerman. A light that suggests Zimmerman owns a certain disrespect and casual disregard for the American Justice System
passport cover photo credit: Wikipedia
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Money may be factor in walking-horse ‘soring’ - Tucson Citizen
Source: USA TODAY
A blue-ribbon Tennessee walking horse stallion might be worth $1 million or more when put up for sale, but it can earn that money back for a new owner in a year through stud fees as others try to cash in on his champion bloodline.
That’s part of what makes the walking-horse industry so lucrative for top breeders, trainers and owners, and what critics say drives a few unscrupulous horsemen to acts of “soring” to create high-stepping animals that appear to have a true champion’s talent, muscle and style.
Many believe that soring — painful cutting and chemical treatments on the animals’ legs to force the prized “Big Lick” high step that wins shows — is rampant in the industry. Some critics even say that no horse trained naturally, without abuse, could walk that way.
“It’s all about money,” said Dr. Gordon Lawler, an Indiana veterinarian who has owned walking horses for 40 years and sits on the board of the Franklin, Ky.-based National Walking Horse Association rival group to Shelbyville’s industry. “An owner will tell a trainer, ‘If you can’t do it, I’ll give my horse to another trainer.’ “
Others say money doesn’t motivate the true sportsmen in the walking horse industry.
“They’re in it for the love of the animal,” said Chad Williams, a longtime professional trainer whose stables north of here are used to train walking horses for top events like the annual Walking Horse National Celebration that put this city of about 20,000 on the equine map.
“Some of the owners whose horses I train bought this farm just to have a place to come to five or six times a year, and we have horses brought to us from as far away as Minnesota,” Williams said.
While most walking horses that Williams trains to compete in shows sell for $30,000 to $100,000, he has seen them fetch as much as $1.6 million.
He has one animal in his stables now — he won’t divulge the name to protect the owner’s confidentiality — that sold for $50,000 as a 2-year-old but went four years later for $150,000 with a string of blue ribbons to its credit.
Stud fees for champion stallions can run as high as $4,000 per mate, though horse owners say fees typically average about $2,500. But a stallion that nets $4,000 to sire a colt can be used perhaps 250 times a year, bringing in $1 million in stud money.
But whether those champions could win blue ribbons and command high prices — and big stud fees — without being subjected to the controversial practice of soring remains a controversial question.
Critics’ claim that every walking horse must be the product of mistreatment is ” just not true,” Williams says. “The horse doesn’t have to be miserable to step like that. We don’t abuse our horses, and anybody can walk into our barn and watch us ride these horses.”
Lawler, who has been around the industry for decades as an animal doctor and horse owner, scoffs at the notion that soring has been wiped out.
“I believe 90% or more are sored or pressure-shoed, or they can’t compete,” Lawler says. “They just can’t do the high leg kick without soring.”
The financial pressure is intense on trainers to prepare horses that can compete in shows such as The National Celebration, the top annual event held here in late August every year, Lawler says.
But horses in the Shelbyville celebration and related events — considered the pre-eminent ones in the sport — and those sanctioned by the rival Franklin, Ky., association in which Lawler participates have vastly different rules.
While the Shelbyville shows allow walking horses to compete wearing padded front shoes, the Kentucky group doesn’t permit that, requiring all horses in its competitions to perform flat-shod.
Formed in 1998 as a response to the growing criticism of the Shelbyville style of walking horse competition, the Kentucky association believes that even the padded shoes and the associated chains that the horses wear on their ankles are a form of abuse.
“We started out with padded shoes also but elected to eliminate that because too much can be concealed between the pad and the bottom of the foot, such as golf balls or pieces of metal to cause pain,” Lawler said.
Gap in prices
There is a big difference in prices — and stud fees that can be commanded — between high-stepping walking horses with padded shoes and the flat-shod ones that the Kentucky association favors.
“The top price for our horses is about $15,000, and most good ones sell for about $7,500,” Lawler said. “And the average stud fee is about $500. I have two that I get $200 for the stud fee.”
He says the big difference in costs — and expectations — is fueled by rich owners in the Shelbyville-style horse industry.
“It’s a total culture,” Lawler said. “You have rich owners who only come to show their horses to compete for a blue ribbon. Now, I’m not against anybody being rich. It’s a free country. But for them, it’s all about the glory. I don’t have enough money (to compete on that level).”
Lawler says soring is used to take horses with less natural talent and make them into competitors, thereby boosting their value on the open market for sales and stud.
But there’s really no way to turn an inferior horse into a champion, argues Bill Coleman of Shelbyville, a volunteer inspector for the industry — known as a designated qualified person, or DQP. Coleman works for the organization known as SHOW, which checks horses in competitions such as the Celebration.
The horse industry hires the inspectors to screen for compliance with federal and state regulations against soring.
Coleman said he has been around horses most of his life and decided to become an inspector because he got tired of abuse.
He believes the industry has cleaned itself up significantly since his organization was formed in 2009 and that owners and trainers now mostly try to do the right thing.
“A champion horse, trained and ridden without artificial aids, will still make it to the top,” he said.
Still, Coleman said his regular business as a homebuilder has suffered since he started inspecting horses because the rules checkups remain unpopular among people in the walking horse industry.
Bloodlines credited
The Shelbyville area’s biggest breeder, Waterfall Farms, has seven champion studs in residence and four stables mares waiting to be bred or give birth to their colts.
“I can tell you from my years of experience that soring is not going to make an inferior colt any better,” said operations manager David Williams, who said he is not related to trainer Chad Williams.
Soring isn’t in the genes, so an average horse sored to blue ribbons won’t be of much value as a stud, he said.
“Soring is like putting a beautiful dress on an ugly girl,” David Williams said. “The only way to raise a superior horse is to breed a superior horse. We study bloodlines and try to keep our success rate high.”
Waterfall Farms has some of the most-recognized walking horse champions available for stud service, including He’s Puttin’ on the Ritz, which Williams called “the Secretariat of the walking horse world,” a reference to the Triple Crown-winning thoroughbred of the early 1970s.
Lawler takes a harsher stance but sees reason for hope. He said recent publicity and court action against soring “will be the best thing that’s ever happened to the walking horse.”
“It doesn’t mean the (Shelbyville) Celebration has to come to an end. It just means they will finally have to play by the rules. And I will commend them if they can do that,” Lawler said.
Copyright © 2012 USA TODAY, a division of Gannett Co. Inc.
Money market fund assets rise to $2.572 trillion - Yahoo Finance
NEW YORK (AP) -- Total U.S. money market mutual fund assets rose by $7.87 billion to $2.572 trillion for the week that ended Wednesday, the Investment Company Institute said Thursday.
Assets of the nation's retail money market mutual funds fell by $4.27 billion to $887.46 billion, the Washington-based mutual fund trade group said. Assets of taxable money market funds in the retail category fell $2.93 billion to $701.97 billion. Tax-exempt retail fund assets fell $1.33 billion to $185.49 billion.
Meanwhile, assets of institutional money market funds rose $12.13 billion to $1.685 trillion. Among institutional funds, taxable money market fund assets rose $12.73 billion to $1.599 trillion; assets of tax-exempt funds fell $600 million to $86.37 billion.
The seven-day average yield on money market mutual funds was 0.03 percent in the week that ended Tuesday, unchanged from the previous week, said Money Fund Report, a service of iMoneyNet Inc. in Westborough, Mass.
The 30-day average yield was also unchanged from last week at 0.03 percent. The seven-day compounded yield was flat at 0.03 percent. The 30-day compounded yield was unchanged at 0.03 percent, Money Fund Report said.
The average maturity of portfolios held by money market mutual funds fell to 45 day from 46 days in the previous week.
The online service Bankrate.com said its survey of 100 leading commercial banks, savings and loan associations and savings banks in the nation's 10 largest markets showed the annual percentage yield available on money market accounts was unchanged from last week at 0.13 percent.
The North Palm Beach, Fla.-based unit of Bankrate Inc. said the annual percentage yield available on interest-bearing checking accounts was unchanged from the week before at 0.06 percent.
Bankrate.com said the annual percentage yield on six-month certificates of deposit was also unchanged at 21 percent from the previous week. The yield on one-year CDs was unchanged at 0.33 percent. It fell to 0.52 from 0.53 percent on two-and-a-half-year CDs. It was flat at 1.12 percent on five-year CDs.
Money test ahead for teens - AZCentral.com
Roughly 3 million students are graduating from high school this year. Do they know enough to manage their money effectively?
Some signs suggest that teens and young adults, like Americans generally, still have a lot to learn. High-school students who this year took a government-sponsored test of money issues, known as the National Financial Capability Challenge, got only 69 percent of the questions correct on average. Arizona students did worse, notching an average score of 67 percent.
Most schools don't routinely offer practical training in financial management, even though most Americans will deal with banks or credit unions, investments, credit cards, taxes, insurance and the like.
The lack of money education is nothing new, but today's crop of teens and young adults faces particularly tough challenges. These include an unusually sluggish job market, a more complex financial landscape, an uncertain future for Social Security and heightened white-collar-theft risks.
Given the obstacles, many experts suggest young adults should do what they can now to get educated, even if it means doing it on their own.
"The mistakes they make can have costly and long-lasting consequences," said Bill Hardekopf, chief executive officer at LowCards.com, in urging today's graduates to start building sound money habits.
Alyssa Coughenour, who graduated from Pinnacle High School in May, might be more prepared than many of her peers. She has been using a debit card and checking account for two years, recently got a credit card and saves money regularly from her summer job.
She also took a course on financial basics through the Boys & Girls Clubs of Greater Scottsdale. The course touches on budgeting, saving and more.
Coughenour, who is 18 and will be heading to Duke University, also credits her parents with serving as helpful role models. "They pounded into my head that you don't want to get too deeply into debt," she said.
Coughenour said she regularly pays off her credit-card balance in full and aims to maintain a balance of at least $500 in her checking account.
John Arnold, a certified financial planner with AXA Advisors in Scottsdale, suggests that young adults build credit, but only if they can do so without maxing out on their available balance, straining to make payments or, worse, defaulting.
A lot of Americans can use a lesson in living on less than they earn.
Step one is drawing up a budget, to see where your money goes. You likely will need to track spending for at least a couple of months to get an accurate picture and to see how certain expenses vary over time. From the budget, you may be able to identify a cash surplus that can be put into savings.
Studies have shown that many Americans are woefully short of savings they can draw on in a pinch -- for that unexpected auto repair or other big expense. "Get in the habit of saving on a regular basis, even if it's only $25 to $50 a month," Arnold advises. "Building good financial habits at a young age is the important thing."
After the emergency fund, try to save for the long haul. The main advantage young adults have is time -- you can grow investments substantially with many years to work with. If feasible and if you have work-related income, set aside money in a Roth IRA, on which you can make tax-free withdrawals decades down the road.
Also, get familiar with credit. Potential lenders already might be monitoring how well you handle financial responsibilities. Your track record with debt shows up in your credit reports, and the information on file in these reports goes into calculating your credit scores.
With good scores, you generally will be able to borrow at low interest rates, while bad scores will hurt. Credit scores are checked when you apply for all types of loans, including credit cards, Hardekopf said. They also could factor in when you apply for insurance, seek to rent an apartment or even apply for a job.
Over your lifetime, you will deal with various types of financial institutions. A good first step is to learn about banks and credit unions. Make sure you can recognize the many types of fees that could apply, from ATM surcharges to overdraft and account-maintenance costs. But also recognize that you might be able to obtain checking accounts and even use credit cards for little or no cost.
Of special note, in this digital age, teens and young adults should heighten their awareness about identity theft. The Internet and social media are great for researching and sharing information, but they also offer more avenues for crooks to get at your money. Don't carelessly reveal personal identifiers such as your birth date, mother's maiden name or Security Security number.
Thieves have been known to raid bank accounts, claim someone else's income-tax return and take out loans while posing as another person. You might be able to mend the financial damage -- many credit-card companies will absorb all fraud losses, for example. But it could take weeks or months, possibly years, to clear your name.
Your financial future also will be easier if you learn basic concepts now. These include the relationship between bond prices and interest rates, income-tax rules, key types of insurance coverages and how compound interest can work -- for or against you. Also, recognize that there's a general link between risk and return -- safe instruments like bank accounts generally deliver the lowest returns while riskier assets such as stocks stand a good chance of generating higher profits if you can accept uncertainty.
The vast majority of today's graduates haven't received many classroom lessons, but the tests will come, sooner or later.
Reach the reporter at russ.wiles@arizonarepublic.com or 602-444-8616.
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