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APTA Member Benefit Education Finance Program Administered by: MEDebt Solutions/EAS Group, LLC Informed Solutions For Student Loans, Debt, Money & Beyond.

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Presentation on theme: "APTA Member Benefit Education Finance Program Administered by: MEDebt Solutions/EAS Group, LLC Informed Solutions For Student Loans, Debt, Money & Beyond."— Presentation transcript:

1 APTA Member Benefit Education Finance Program Administered by: MEDebt Solutions/EAS Group, LLC Informed Solutions For Student Loans, Debt, Money & Beyond Protecting the Value of Your Prime Assets: Your Physical Therapy Degree and Career Earnings! “ Uninformed and Improperly Managed Debt May Be the Most Harmful and Devastating Threat to the Success of Physical Therapy Students and Graduates ” Leon Johnson, Jr., MBA, DEd President & CEO EAS Group, LLC/MEDebt Solutions APTA National Student Conclave Hyatt Regency Miami – Miami, FL 3:00 PM – 4:00 PM Saturday, October 31, 2009 Copyright © 2009 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.

2 APTA Member Benefit Education Finance Program Administered by: MEDebt Solutions/EAS Group, LLC For a copy of this presentation or more information on a personalized MEDebt Solutions Debt Evaluation & Budget Affordability Assessment & Planner your request Please reference APTA - NSC Copyright © 2009 MEDebt Solutions/Education Association Services (EAS) Group, LLC. No reproduction, in whole or in part, without written permission.

3 Prologue  Before we can discuss protecting the value of your physical therapy education investment, debt and techniques to better manage debt and the stress of debt we must change the conventional conception and financial understanding of money, debt, credit and related behaviors.

4 Prologue  The way you spend reflects your values and what you think is important in the world.  Carrying an ongoing credit card balance is an indicator that you cannot afford your life. APTA – Member Benefit Education Finance Program

5 If you must borrow  If you must borrow most of the cost of your education, “Don't forget you're poor!"  If loans make it possible for you to attend school, you need to remember that “Your life is a ‘Financial Illusion’ and that in reality you're broke.”  Because you're broke, you should act like you’re broke and not spend and act like it's all paid for from lottery winnings.

6 Congratulations!!

7 Money is a finite resource Money is a finite resource for each of us, different amounts but finite. By its very nature, we constantly make choices about our money and our choices determine our experiences in life. Informed choices makes for better experiences.

8 “Money & Debt are Life Skill Tools!” MEDebt Solutions/EAS Group, LLC

9 Money, Debt, Wealth and Happiness  Money and debt are “Tools” to be used to accomplish things - build wealth and support goals, not merely to buy things.  Like any tool you must hone your skills, practice and take control/action if the tools are to work for you and become productive, efficient and effective! MEDebt Solutions/EAS Group

10 Is education worth the money?  Many economists say borrowing for any kind of higher education is generally a smart idea.  “College is a very good investment, and most students take out too few loans, not too many.” says Caroline M. Hoxby, a professor of economics at Stanford University.  Anthony P. Carnevale, director of Georgetown University’s Center on Education and the Workforce, agrees. “From an economist’s point of view, debt is the very best way to pay for education because you’ll shifting the cost forward until you’ll be earning more money,” he says. “you borrow cheap money. It’s really a very good bargain.”  Patrick M. Callan, president of the National Center of Public Policy and Higher Education, is not as sanguine about the value of borrow. Still, “the only thing worse than borrowing,” he says, “is not borrowing and not going to college at all.” Source: The Chronicle of Higher Education, May 22, 2009, Volume 55, Issue 37, Page A1

11  Money is an intense personal issue, often difficult to acknowledge and usually unspoken – the last taboo.  We all see money in the relative, relative to our own money experienced, rather than absolute terms.  People, most students and many professionals, who feel they should know about money but don’t, find it less embarrassing not dealing with the issue. APTA – Member Benefit Education Finance Program

12  Money is never just about money.  Money and our relationship with money is an emotional issue.  Money and our relationship with money are about power, dependency, control, communication, conflict, resolution, status, ego, comfort, security, fantasy, escape, anxiety and freedom.  Money is even about happiness.  Money cannot buy happiness, but it plays a critical role.

13 Money & Debt Aptitude + Attitude = Success! The rich know that wealth, economic security, financial stability, assets and most financial obligations are build on the savvy use of “good” debt, debt which is leveraged, hedged and manageable when given access to favorable rates. Good debt is the informed intelligent use of Other People’s Money (OPM) at favorable rates to buy value at today’s prices and pay with tomorrow’s dollars.

14 “ Money & Debt Are Life Skill Tools! ” Because “Money & Debt are Life Skill Tools” you need informed, accurate and reliable “money- wise” debt management information, strategies, options and solutions for your student loans, debt, money & future beyond graduation. MEDebt Solutions - Informed Solutions For Student Loans, Debt, Money & Beyond

15 To properly manage your debt you need to know that  Due to the failure of most educational institutions to teach financial history, literacy and personal money and debt management we allow innocent financially inexperienced students borrowers to enter into student loan agreements without a clear understanding of the debt they are incurring.  Schools, banks and government give every indication that they lack a clear understanding or real interest understanding the lifelong impact unsustainable educational debt. APTA – Member Benefit Education Finance Program / MEDebt Solutions

16 State of American Financial Literacy  A study done by the National Council of Economic Education found that one-third of Americans are illiterate when it comes to personal financial concepts and the status of the economy.  41 percent of U.S. adults, or more than 92 million people living in America, gave themselves a grade of C, D, or F on their knowledge of personal finance. Source: National Foundation for Credit Counseling, 2009 Financial Literacy Survey, April 2009 MEDebt Solutions - Informed Solutions For Student Loans, Debt, Money & Beyond

17 Student loans are a unique form of debt  Education debt is unlike other debt in that excessive amounts of loan money is available to pay for higher education to almost everyone and it only requires demonstrated “financial need.” - Just complete a FAFSA!  To receive student loans you do not have to demonstrate “financial affordability” - the ability to repay the loan; a job, proof of income, collateral, credit history, credit score or an acceptable debt-to-income ratio.  It is important that students and graduates understand and know how to evaluate and assess the risk of their debt and develop informed money management skills, behaviors and habits in order to repay the debt.

18 Student loans are a unique form of debt  Student loans are very different than consumer revolving and installment loans.  Student loans have more and different nuisances, complexities and regulations that have changed several times within the last decade.  Education debt has now also been made more complicated by the national and global financial and credit crisis.

19 Hint: It’s about financial aid! Higher Education’s Dirty Little Secrets?

20 Dirty little secrets “It’s too easy for students to borrow the maximum loan amount and too many students treat their financial aid like lottery winnings”

21 Dirty little secrets  Too many students think a job will make all their financial problems disappear. They're wrong.  Too many students have an unrealistic idea of how much money they'll make when they enter the work force.  Too many students forget that a healthy percentage of their pay will be taken out for taxes, health insurance, Medicare, Social Security and other deductions.  Too many students let their loans become an afterthought with no idea of how much they borrowed and how they are going to pay it back.  An overpriced degree can be financial suicide. APTA – Member Benefit Education Finance Program

22 Dirty little secrets  The former U.S. secretary of education, Margaret Spellings called the financial aid system a "fundamentally flawed" system.

23 Most students and graduates don’t have  Very few indebted students, graduates or early career physical therapist and health professionals in general have the background, training, experience or expertise to thoroughly understand their debt and its enduring implications.  Very few schools address the management of debt in a personalized, comprehensive “finance and economics oriented” manner thus leaving the vast majority of students and graduates to their own most often ill-informed, untrained, inexperienced intuitive, perceptive decision making.  This is like sending a recreational swimmer with no training and no coaches or other support to the Olympics; the results would be disastrous.

24 Dirty little secrets  Schools have insufficient incentive to keep the cost of education down thus with increasing cost comes increasing levels of borrowing.  Without institutional or government intervention student unknowingly become responsible for figuring out whether they can afford their student loans. APTA – Member Benefit Education Finance Program

25 Dirty little secrets  Short of paying them off, all student loans, federally guaranteed or not, are extremely hard to get rid of in bankruptcy proceedings, more so than credit card or other debt.  The financial aid system and process pays much less attention to what happens to students after they borrow because loans guaranteed by the federal government can garnish can garnish up to 15 percent of wages of borrowers who have defaulted on federally guaranteed loans, withhold tax returns, suspend payments or participation from other federal payment programs - tools unavailable to the collection of other kinds of unsecured consumer debts.

26 Dirty little secrets  Debtors can shed credit card debt and other unsecured obligations through bankruptcy but can get out of student loans only if they can show “undue hardship.” That term is not defined by the bankruptcy code and, lawyers have said, judges often take a narrow view of its meaning.  “The cases are so harsh in measuring what an undue hardship is that anybody who is working and maintaining any kind of home life has very little chance of discharging these things in bankruptcy,” said Cathleen Cooper Moran, a bankruptcy lawyer in Palo Alto, Calif.

27 Dirty little secrets “ At the time that people graduate from school, almost everybody is technically eligible for bankruptcy because they have debts that exceed their assets.” Shelly Repp, general counsel at the National Council for Higher Education Loan Programs

28 Most students and graduates don’t have  Very few indebted students, graduates or early career physical therapist and health professionals in general have the background, training, experience or expertise to thoroughly understand their debt and its enduring implications.  Very few schools address the management of debt in a personalized, comprehensive “finance and economics oriented” manner thus leaving the vast majority of students and graduates to their own most often ill-informed, untrained, inexperienced intuitive, perceptive decision making.  This is like sending a recreational swimmer with no training and no coaches or other support to the Olympics; the results would be disastrous.

29 Most students and graduates don’t have People extrapolate from their experiences and perceptions and translate into a reality that they may not understand and isn’t necessarily true. For example, should you be more fearful of being attacked and killed by:  1. Sharks  2. Elephants  3. Hippo  4. Vending machine

30 Perception vs. Reality  Only a few people are killed by sharks each year with a max of 10. Over the past decade there were a total of six recorded shark attack fatalities in the U.S., for an average of.6 deaths per year.  According to the U.S. Consumer Product Safety Commission there were 37 known vending machine fatalities between 1978 and 1995, for an average of 2.18 deaths per year. Barring a drastic reduction in the frequency of vending machine accidents since 1995, vending machines are indeed more deadly than sharks by a factor of almost four.  According to the National Geographic Channel documentary Elephant Rage, some 500 people are killed by elephant, the world's largest vegetarians. Across the world, elephants kill more people than do sharks.  Hippos kill more people than elephants do. The reason most people think sharks are the most deadly is because of the hype and influence of media. “JAWS” creates a perception that laypersons give credibility and minimum to non-existent news from places in the world with large populations of elephants and hippos.

31 Dirty little secrets Unless you are one of the very fortunate grads who will complete your PT education debt free or with minimum debt – You will join one of the fastest growing groups in America – financial disabled young adults, with Negative Net Worth who are Virtually Bankrupt and don’t know it.

32 To properly manage your debt you need  An in-depth grasp and/or access to experienced professionals with expertise in economics, finance, financial strategies, financial planning, risk, the psychology of money, spending, saving, investing as well as federal and private student loans, credit and debt are all critical ingredients to success and in a huge degree, personal and professional significance and happiness. MEDebt Solutions - Informed Solutions For Student Loans, Debt, Money & Beyond

33 Have a plan and be informed  To protect the value of your education investment you must keep your student loan debt manageable.  To keep your student loan debt manageable you must comprehensively understand your situation, in detail, preferably before you agree to it. This seldom happens.  Don’t be insulated from your loans; know what you are borrowing: (type of loan, name of loan, amounts, interest rates, terms, repayment options) and what resources and options you will have to manage your loans. MEDebt Solutions - Informed Solutions For Student Loans, Debt, Money & Beyond

34 Have a plan and be informed  Your first defense against unmanageable debt is having a plan – a comprehensive informed financial plan which is in harmony with your goals, incorporates living within your means, preferably below your means and emphasizes saving and investing that begins no later than with the first post-grad pay check ;  Your plan begins with a clear articulation of your goals and an informed counseled understanding/assessment of affordability – not need.

35 Have a plan and be informed  Your plan must include an affordability assessment which will give you guidance in knowing the future implications of borrowing, how much you should or are willing to borrow, what sort of payback your borrowing will entail, and just how little or how much your expenses will be covered after saving/investing.

36 Uninformed decisions  Intuitive financial decisions for virtually all indebted professional school students and graduates, makes you vulnerable to life-long financial stress and instability because uninformed financial decisions severely lessen the value of the degree by reducing the amount of earnings you get to keep and use as you would like and need over a 30 year or more career.  As such, new graduate’s precious and limited money is most often being used inefficiently and ineffectively.

37 Basic Blueprint to Successful Debt Management! “Optimize Debt” Long-term financial success is enhanced when you choose to “ Optimize ” debt especially the financing of your education because it most likely will be the largest debt you have at graduation, one of the five single largest debts in your lifetime and only significant debt you incur without meeting “ affordability ” criteria. Optimizing Optimizing debt requires that you: Identify your goals – write them out and refer to them often, they are your targets for success; Know how much you will really pay and what it will really cost to attend and graduate from your program; Have an informed financial plan which utilizes a budget that compatible and reflects your priority goals.

38 Optimizing Debt Understand that living within and preferably below your means will mean there will be things that you want and can buy but cannot afford and will not buy until you can afford it; Consistently monitor & execute your plan; Start savings early – to take full advantage of and completely utilize “TIME” the ultimate and most powerful wealth creation force know to man, to build the assets side of your net worth balance sheet via compounding and interest accrual. See Bob & Hazel comparison.

39 Optimizing Debt Establish at least $500 in an emergency savings fund with a goal of $3,000 by graduation; As a graduate save to create an emergency fund of at least 3 months and 6 – 8 months or more depending upon employment stability. Intelligent management of student loan and other debt will require graduates to simultaneously manage the liability of “good debt” in a manner that is not risky, overleveraged or turns “good debt” into “bad debt.”

40 Optimizing Debt Improve your Money IQ - c ritically think about and educate yourself about how Money, Debt and Deferred Gratification will effect your goals; Be comprehensive in your approach and understanding of Money & Debt as common denominator success tools; Borrow less and only what you need for the basics for survival - not “ Lifestyle ” at least not until you have a comfortable level of positive net worth and then limit debt for depreciating items; Research and make an informed projection of how much graduates in your specialty are paid in their first post- grad job and for the next 5 – 10 years post graduation;

41 Optimizing Debt Smartly utilize expert professionals and money saving strategies and tools to save, invest, budget and repay and manage all debt especially student loans by using extended repayment, consolidation, principal payment, income sensitive, income contingent, income based repayment, deferment and forbearance; Select the most advantageous means to pay for your purchases; Understand and know your money personality, habits and behavior; Live below your means, budget deficits are unacceptable; Spend, save, borrow ( “ for good debt only ” ), eat, exercise, rest and invest intelligently; START NOW!

42 Managing Debt Is Complicated but Simple or Simple but Complicated?  understanding money  understanding who you are  understanding who you want to be  understanding your money relationships  understanding your level of money & credit information & knowledge  understanding your attitude about money  understanding your money behavior and habits (saving & spending)  personal discipline  ability to defer gratification  being comfortable with living below your means  saving/investing for things you want in the future more than things you would like now  your identity - self image (desire to keep up with “the Jones”)  your tolerance for and understanding for debt  having a Money Support System & professional advice

43 Financial Fact! An early accumulation of funds is more important than interest rate and can be used to help finance some of your most important and expensive goals such as a home, a business/practice, retirement, kid’s education and philanthropic endeavors.

44 Start Saving Early  Hazel and Bob both save $1,000 per year ($83.33 per month or $19.23 per week – something everyone here can do).  The money each saves earns 10% interest per year.  Hazel starts at age 22 and stops at age 30 (8-years).  Bob starts at age 30 and stops at age 65 (35-years).

45 AgeHazel Invests GrowthBob Invests Growth 221,0001, ,0002, ,0003, ,0005, ,0006, ,0008, ,00010, ,00012,57900 Start Saving Early

46 30013,8371,0001, ,2211,0002, ,7431,0003, ,4181,0005, ,2591,0006, ,2851,0008, ,5141,00010, ,9651,00012, ,6621,00014, ,6281,00017, ,8911,00020,384 AgeHazel Invests GrowthBob Invests Growth

47 AgeHazel Invests GrowthBob Invests Growth Start Saving Early 40035,8911,00020, ,4801,00023, ,4281,00026, ,7711,00030, ,5481,00034, ,8021,00039, ,5831,00044, ,9411,00050, ,9351,00056, ,6281,00063, ,0911,00070,403

48 Start Saving Early AgeHazel Invests GrowthBob Invests Growth ,4001,00078, ,6401,00087, ,9041,00097, ,2951,000108, ,9241,000120, ,9171,000133, ,4091,000147, ,5491,000163, ,5041,000180, ,4551,000200,138

49 Start Saving Early AgeHazel Invests GrowthBob Invests Growth ,6001,000221, ,1601,000244, ,3761,000270, ,5141,000298, ,8651,000329,039 Value at Retirement $388,865 Value At Retirement $329,039 Less Total Contributions $(8,000) Less Total Contributions $(35,000) Net Earnings $380,865 Net Earnings $294,039 Hazel invested $8,000 total. Bob invested $35,000 Total - $27,000 more than Hazel...and Bob never catches up. Hazel has $27,000 more than Bob to use for other important priorities and goals. Hazel has also net earning of $86,862 (26.53%) more than Bob.

50 Your Debt What are your feelings about debt? Do you embrace debt or abhor it? How much debt are you going to incur?  For your education?  For your home?  For your next car?  In a lifetime?  How much debt is too much debt for you?

51 Student loans are a unique form of debt  Education debt is unlike other debt in that excessive amounts of loan money is available to pay for higher education to almost everyone and it only requires demonstrated “financial need.” - Just complete a FAFSA!  To receive student loans you do not have to demonstrate “financial affordability” - the ability to repay the loan; a job, proof of income, collateral, credit history, credit score or an acceptable debt-to-income ratio.  It is important that students and graduates understand and know how to evaluate and assess the risk of their debt and develop informed money management skills, behaviors and habits in order to repay the debt.

52 Student loans are a unique form of debt  Student loans are very different than consumer revolving and installment loans.  Student loans have more and different nuisances, complexities and regulations that have changed several times within the last decade.  Education debt has now also been made more complicated by the national and global financial and credit crisis.

53 Too Much Debt?  Too much debt is where the borrower is over- leveraged and payments cannot be reasonably made when due and borrower's goals, ambitions and perceptions are altered based upon money issues and concerns.  It is unfortunate and shameful that the financial aid and student loan process, including the institutions, student and graduate's financial naiveté and student schedules and pressures do not make it easy for students to recognize, calculate and comprehend the critical importance of understanding and managing money and debt, particularly in the early years of their education and independent adult professional lives.

54 Congratulations Graduates!!

55 It’s not mission impossible  Properly understood and addressed with expert consultation, an overleveraged and financially unstable situation can often be reconciled or restructured.  The key to financial success and goal achievement is being financially informed and responsible with an affordable debt and money management strategy and plan in place.  A strategy and plan which provides for simultaneous debt management and building financial assets through saving and investing.  Maintaining and strengthening credit status is also a priority.

56 Your debt is more important than you think  Given our new economic environment and excluding health and perhaps only second to obtaining your degree, understanding debt, making it affordable and protecting the value of your biggest financial assets; Your education, your degree, training, career and the value of 20, 30 and perhaps 40 years of future earnings is the prime requisite for physical therapy students and graduates.

57 Break-Even Point (BEP)  When deciding upon a financial purchase that will lead to an expected greater efficiency (lower cost and/or increased value) or return on investment but requires an upfront expense the Break-Even Point (BEP) for the upfront expense is generally analyzed.  The break-even point is one of the simplest yet least used analytical tools in management. It helps to provide a dynamic view of the relationships between costs (cost of education) and profits (earnings less the cost of education). MEDebt Solutions/EAS Group

58 Break-Even Point (BEP)  In economics and business the BEP is the point at which there is no net loss or gain, no profit and no loss has not been made, the capital investment has "broken even."  Therefore, going forward with all other things equal, the investor (student/graduate) has paid for the use of capital (student loans) and retains/benefits from the savings generated from the improved efficiency/increased value which translates directly into profits.  For individuals more discretionary dollars are kept in their pockets than they had before the investment. MEDebt Solutions/EAS Group

59 BEP for a PT School Grad  A physical therapist graduate who averages $60,000 per year will break-even (recoup the $235,000 student loan expense - 6.8%) in 3 years and 11 months.  In other words, in economic terms after just under 4 years all earnings can be considered as profit of about $1.56 million for a 30 year career (30 year career – 4 years BEP = 26 years x $60,000 = $1.56 million).

60 BEP for a PT School Grad  This analysis does not include “Opportunity Cost” which is the loss of income that would have been made if the graduate would have been employed instead of enrolling in a physical therapy program.  Assuming earning of $40,000 per year following undergraduate school the net profit would be reduced by $120,000 and still total $1.44 million.

61 Debt as an investment  It is very difficult to characterize a $1.56 million dollar return on a $235,000 investment that breaks even in basically 4 years as too much debt.  This is the same as paying $235,000 (including interest) for a house and later selling it for $1.8 million; it is a spectacular return on a financial investment.  If the same amount of debt is not understood or improperly managed, including the management of all other debt, it can become a nightmare disguised as ever increasing monthly payments on increasingly larger loan balances to cover cash flow shortfalls, lowering credit scores resulting in higher borrowing expense for all other loans.

62 Debt as an investment  For indebted physical therapy students, taking on additional unnecessary debt above the “pure basics ‘I am talking survival’ needs” during PT school or early on following graduation or during the early (7 – 10) practice years, even for what is generally thought of as “good” debt like a house (still available today for with little or no money down but with higher or variable interest rates) substantially changes the financial profile, balance sheet/net worth, break-even point and long- term financial status and stability.

63 Debt as an investment  Adding a $140,000 house at a low 4.8 percent interest will mean adding $264,000 in total payment obligations (including interest) to the $235,000 of student loans payment obligations.  This creates a total debt liability of $499,000.  Given the same income scenario of $60,000/year post-graduation income over the next 30-years the PT’s BEP becomes 8 years and 4 months and will net $1,301,000 after paying off student loans and the mortgage (30-years career – 8 years 4 months BEP = 21-years 8 months x $60,000 = $1,301,000).

64 Debt as an investment  Although it takes nearly 4.5-years and $270,000 in earnings more to break even, this is still not a bad return.  However, taking on early additional debt reduces the net return to $43,400 per year and $3,600 per month.  $8,800 (17 percent) less per year and $750 less per month than if the house debt was not added at graduation.  With the house debt, there is $750 less discretionary net income available each month.

65 Debt as an investment  The $750 difference would be worth nearly $40,000 if deposited in an account earning 5 percent after four years.  Nearly $72,246 after seven year.  Over $116,642 in 10 years.  If the selling price of the house appreciates at 3 percent a year costing $182,000 in 10 years; the PT would be able to put a 20 percent down payment of $36,400 gaining instant equity and still have over $145,6000 in cash assets. MEDebt Solutions/EAS Group

66 Debt as an investment  With the 20 percent down payment and cash assets a higher credit score would be most likely thus generating a very good competitive interest rate and terms on a mortgage then available right after graduation.  If the $145,600 was left in the account with no additional deposits for another 20 years at the same rate, the account would total nearly $395,000.  If the $750 contributions were continued the account would total nearly $703,000 in 20 years.  Assuming the house continued to appreciate at 3 percent a year, it would be valued at $294,200.

67 Debt as an investment  The equity in the home for the graduate who buys the house after graduation would depend mostly upon the appreciation if any in the property value less non-home value expenses such as closing cost, escrows and maintenance.  Do remember that the early years of mortgage payments are applied almost exclusively to interest payment.  In addition, the graduate who buys the house shortly after graduation forfeited the use of putting $750 per month plus compounding and accruing interest to work for them.  Hence, the graduate is largely dependent upon the appreciation of the value of their house to increase the assets side of their net worth.  In order to access equity value you would have to either sell the home or borrow using the home as collateral.

68 BEP for a PT Grad Buying a House  This analysis does not include opportunity cost loss (loss of income that would have been made if the graduate would have worked instead of going to).  Assuming earning of $40,000 per year following undergraduate school the net profit would be reduced by $120,000 and total $1,140,000.

69 Deferred gratification Graduation:  House $140K  Down Payment - $0  4.8% - 30-yrs.  $735/month  Total Payments - $265K  Appreciates 3%/yr.  20-year equity - $154K  30-year equity - $266k  Total Interest Pd $124K House 10-Yrs. Post Graduation:  House $182K – 2019  Down Payment - $36K  4.8% - 20 yrs.  $947/month  Total Payments - $227K  Appreciates 3%/yr.  10-year equity - $146K  20-year equity - $291K  Total Interest Pd $81K

70 BEP for a Physical Therapy Grad Buying a House  The BEP calculations readily suggest that taking on additional debt above and beyond student debt early in one’s post-graduation career can substantially change the value of the education/ degree as well as profitability, financial status, economic stability profile, quality of life and ability to finance personal and professional goals.

71 Debt as an investment  Understanding and managing education school debt in financial terms gives students and graduates insight, options and the ability to foresee and create his/her desired future with less stress, a personalized financial baseline, a financial roadmap for goals, a more comprehensive understanding of lifestyle expectations, outcomes and far greater happiness and satisfaction.  It is critically important that physical therapy students and graduates understand and abide by "affordability" concepts and principals of financial planning, whether via MEDebt Solutions or some other education and consultative vehicle. MEDebt Solutions/EAS Group

72 Debt as an investment  As the scenarios demonstrated, the most questionable and potentially financially threatening move an indebted new graduate, early career practitioner or a student can make is to take on any additional debt Too Soon.  Do not take on any additionally debt beyond what is absolutely necessary to graduate, become licensed and meet ‘basic’ living needs/expenses – Too Soon.  Students and graduates need to know how to rationally assess their situation and know the exact parameters of what they can afford to spend, buy and most importantly need to save and invest.  Or have access to experience trained professionals that can help them assess their situation. MEDebt Solutions/EAS Group

73 Age Old Wisdom - Portrait of Benjamin Franklin Engraved by J. Thomson, From an Original Picture by J.A. Duplessis “For age and want, save while you may; no morning sun lasts a whole day.” -Benjamin Franklin

74 New Age Wisdom Keep your mind on your money and your money on your mind Snoop Dogg Calvin Cordozar Broadus, Jr.

75 Debt – Is a Physical Therapy Education Worth the Money? It depends? It depends on your goals, what you know about finance & student loans, your tolerance for debt, the expertise and experience of the professionals who you work with, your attitude and discipline to live below your means and defer gratification in order to build you assets/net worth via saving and investing. MEDebt Solutions/EAS Group

76 Your Future Begins Now! MEDebt Solutions/EAS Group

77 Taking Control of Your Debt The financial decisions you make as students makes going forward as PTAs, PTs and DPTs, particularly regarding the use and repayment of credit cards, student loans and salary will have a huge impact and influence on your quality of life for many years to come. By understanding money management, money behavior, money habits, money decisions and money attitudes you will be better prepared to take control and make money change things for the outcomes you want.

78 Physical Therapist Debt PT students are graduating with accumulated education debt of $50,000 to $100,000 and more.

79 A MEDebt Solutions Examination & Assessment of Financial Viability Jennifer & Agnes

80 DPT Program - COST OF EDUCATION - BUDGET TEXT Tuition & FeesLiving Expenses*Total 1st Year$22,500.00$15,551.00$ 38, nd Year$22,500.00$15,551.00$ 38, rd Year$22,500.00$16,018.00$ 38, Total$67,500.00$63,138.00$114, * 12 month school estimated budget

81 Monthly Living Expense & Lifestyle/Budget Choices – DPT Program TEXT JenniferAgnes Housing: One Bedroom (500 sq. ft.) $ Share Two Bedroom (1000sq.ft.)$ Utilities$ 75.00$ Food: Basic Food/Groceries/Dine In$100.00$ Nonessential Food/Dine Out$225.00$ Personal$ 75.00$ Recreation/Entertainment$100.00$ Car Payments/Transportation/Related Expenses$325.00$ Insurances/Apartment -$15.00 Childcare Phone - $ $50.00 Cont. on Next Chart

82 Monthly Living Expense & Lifestyle/Budget Choices – DPT Program TEXT JenniferAgnes Other: Cable TV/Internet Presents/Gifts Vacation/Travel Memberships/Subscriptions Credit Card: $ $ $ $ $25.00 $8,000 $ $2,000-$43.00 Savings/Invest/Retirement:-- Savings-$15.00 IRA-$20.00 Student Loans: In school deferment Federal Stafford’s- - Private- - Total$ 2,198.00$ 1,263.00

83 Sampling from a MEDebt Solutions Debt Evaluation & Budget Affordability Assessment For Students

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86 Jennifer & Agnes  Just a $22.00 per month difference!

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88 MEDebt Solutions Students Affordability Rules of Thumb Index Student Loan Payments are considered manageable when kept to no more than 12% of Gross Monthly Income and preferably below 9%. Monthly Committed Expenses should be 50% - 70% of total remaining income/financial aid (after all payments due school have been deducted). Monthly Selected Wants should be 10% - 30% of total remaining income/financial aid (after all payments due school have been deducted). Savings/Investment Goals should be $ % of total remaining income/financial aid (after all payments due school have been deducted).

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90 MEDebt Solutions Students Affordability Rules of Thumb Index Home Debt, rent/mortgage payments, related taxes and insurances, and other related cost should be kept to no more than 32% of total remaining income/financial aid (after all payments due school have been deducted). Total Debt, home debt, credit card debt, auto loans and any other money owed should not climb above 40% of total remaining income/financial aid (after all payments due school have been deducted).

91 Every Student is Unique When it Comes to Affordability Rules of Thumb Index  Each individual can and should decide how they wish to divide up their Monthly Committed Expenses and Monthly Selected Wants. Decide how to allocate your available funds (income Less Total Deductions & Expenses Due the School) by percentages and then work out the details. It is critically important that you borrow as little as possible, do not run a deficit and have at least a $500 cushion as an emergency fund.  The key to student financial success and goal achievement is being financially informed and responsible with an affordable debt and money management strategy and plan in place for simultaneous debt repayment and building financial assets through saving and investing. Maintaining and strengthening credit history and credit scores is also a priority.

92 Every Student is Unique When it Comes to Affordability Rules of Thumb Index  Successful goal achievement is the result of informed intelligent borrowing – borrowing less, at low rates and only to pay for “basic education and living necessities” and proficient credit management. Borrowing too much, which is far too easy to do via financial aid and credit cards, can easily turn an excellent investments like your education into an unmanageable over-leveraged (not enough income to meet debt payments), over-priced “bad” investment that will consume excessive amounts of future income that would be better used for more productive purposes like saving and investing for your goals.  As a very wise financial planner often said, “As a student, live like a student so you will not have to live like a student when you are a 45- year old professional and your own kids are students.”

93 Jennifer & Agnes Debt – Three Years Later at Graduation $ 61, $ 13, Total Stafford $ 41,000.00$ 41, Stafford Unsubsidized $ 53, $ 61, Private Student Loans $ 20, Stafford Subsidized DPT Program: AgnesJennifer Credit Cards $ 52, $ 2, TOTAL DEBT $ 127,620.00$115, Stafford 6.8% Private Student 12.0% - 15 years Credit 18.0%

94 Graduation to Employment/Practice Income: Assumed Gross Income 1- 4 years experience$55, Gross Income$55, Less 6% 401 (K)- $(3,300.00) Adjusted Gross Income$55,000.00$51, Less 30% Deductions$(16,500.00)(15,510.00) Net Yearly Income$38,500.00$36, Net Monthly Salary$3, $3, $192/mo difference Jennifer Agnes

95 Lifestyle Expenses - First-Year Employment/Practice UnconsolidatedConsolidated Housing$1, Utilities$ Basic Food/Groceries/Dine In$ Nonessential Food/Dine Out$ Apparel & services$ Recreation/Entertainment$ Transportation & Related Expenses$ Presents/Gifts$ Personal Care$ Health Care$ Vacation/Travel$ Credit Card: $13,000$ Credit Card: $ 3, Cont. Next Chart Jennifer Agnes

96 Lifestyle Expenses - First-Year Employment/Practice Savings/Invest/Gifts:UnconsolidatedConsolidated Savings/Investments --$ Charitable Gifts --$25.00 Roth IRA --$20.00 Student Loans: -- Federal Staffords $ $404.00$340.00*** Private Bal. $53,120 $ Bal. $52,330 $ Payment on Credit Card Principal* --$100.00* Payment on Private Loan Principal** --$ Total $5,206.00$4,902.00$2, Monthly Surplus/(Deficit) $ (1,998.00)$ (1,694.00)$40.00 Agnes Jennifer Balance to be paid off in 1-year, 10-months **Balance to be paid off 3 years, 4 months early-interest savings of $21,599 ***Graduated Plan with 0.25% for ACH

97 Sampling from a MEDebt Solutions Debt Evaluation & Budget Affordability Assessment For Graduates

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101 MEDebt Solutions Affordability Rules of Thumb Index for Graduates Student Loan Payments are considered manageable when kept to no more than 12% of Gross Monthly Income and preferably below 9%. Monthly Committed Expenses should be 40% - 60% of Net Monthly Income. Monthly Selected Wants should be 10% - 30% of Net Monthly Income. Monthly Savings/Investment Goals should be 10% - 20% of Net Monthly Income.

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103 Actual Lifestyle Living Expenses – DPT Program 1 st Year Tuition & Fees $ 22, Living Expenses $ 26, $ 15, nd Year Tuition & Fees $ 22, Living Expense $ 26,376.00$15, rd Year Tuition & Fees $ 22, Living Expenses $ 27,576.00$16, Total $147,828.00$113, Agnes Jennifer $33,998 (23%) Difference

104 Affordability Rules of Thumb Index for Graduates Student Loan Payments are considered manageable when kept to no more than 12% of Gross Monthly Income and preferably below 9%. Home Debt, rent/mortgage payments, related taxes and insurances, and other related cost should be kept to no more than 31% - 35% of Gross Income. Total Debt, home debt, credit card debt, auto loans and any other money owed should not climb above 36% - 43% of Gross Income.

105 Graduates Affordability Rules of Thumb Index  Each individual can and should decide how they wish to divide up their Monthly Committed Expenses and Monthly Selected Wants.  However the key to financial success, economical security and goal achievement is the long term consistent commitment to saving/investing $500 to 15% - 20% of household income.  The remaining 80% can be used as you see fit as long as it does not involve the accumulation of high interest, unmanageable and/or over-leveraged "bad" debt for depreciating or over-priced good, services or products.

106 Lifestyle Expenses - First-Year Employment/Practice Repayment Strategy Option:  Agnes can opt for two years of forbearance on her consolidation and apply the full $340 monthly payment to the principal of her private loan.  In doing so she will pay off the 15-year private loan early by 5-years, 8-months and save nearly $25,000 of 12% interest ($35,804 vs. $60,719).

107 Personal Financial Strength/Assets - Jennifer TEXT Jennifer Consolidated Year 1 (deficit + CC bal. $13k)$ (33,328.00) Year 2 (cut deficit ½ + CC bal. $13k)$ (23,164.00) Year 3 (cut deficit ½ + CC bal. $13k)$ (18,082.00) Year 4 (cut deficit ½ + CC bal. $13k)$ (15,541.00) Year 10 (deficit & CC bal. eliminated)$ (4,456.00) Begin Contributions = to Fed. Loan Pay. Year 15 (Add Private Loan pay. contrib.)$0.00 Year 20$48, Year 25$123, %

108 Personal Financial Strength/Assets - Agnes 7.0% Roth 9.0% 401 Total Year 1$1,239.00$ $ 6, $ 8, Year 2$2,568.00$ $ 14, $ 17, Year 3$3,993.00$ $ 22, $ 27, Year 4$7,56600$ 1,15000$ 32, $ 41, Year 10$35,128.00$ 3,870.00$ 112, $ 151, Year 13 begin contributions with pri. loan, CC + additional principal payments = $1004 Year 15 $ 98, $ 7, $ 227, $ 333, Year 20 $ 211, $ 13, $ 417, $ 642, Year 25 $ 371, $ 22, $ 729,758.00$ 1,123, Agnes – Consolidated

109 Maximizing Resources Borrow Responsibly “ A s life closes in on someone who has borrowed far too much money on the strength of far too little income, there are no fire escapes.” - John Kenneth Galbraith (1908 – 2006) most famous economist of the second half of the 21 st century (File photo/Harvard News Office)

110 Moral to the Story – Leverage Your Debt  In this Jennifer and Agnes example, the financially rewarding strategy is to leverage debt by living “student like” for a few years.  During this time you are working to aggressively reduce your outstanding “bad debt,” manage your “good debt,” limit your intake of any new debt, and balance these actions with the accumulation of appreciating/working assets which will improve your debt-to-income ratio and net worth,

111 Moral to the Story – Leverage Your Debt  During this time you should also work to maintain and improve your credit history/score, increase your income and strive for the abundant fulfilling life and goals you have set for yourself while fostering economic stability and security.  This will not happen overnight but it will happen sooner than you can now imagine and certainly before you reach your peak experience earning years if you do right by your plan.

112 Moral to the Story – Leverage Your Debt  Otherwise you will experience “student like” sensations, frustrations and angst well into your experienced peak earning years where your resources will be fully committed with little flexibility for you to just be you.  This scenario also suggest that for those who are planning to start their own company that they understand their financial position and work diligently to build their assets, net worth and credit rating.

113 Standard Repayment Plan - Agnes Monthly Payment Total Interest Interest Rate Repayment Plan # Years $ 2,580$ 85, %10 Years $ 14*$ %10 Years $ 2, % of Gross $ 85,979 Standard Payment Plan - Jennifer Monthly Payment Total Interest Interest Rate Repayment Plan # Years $ 2,580$ 85, %10 Years $ 248$ 9, %10 Years $ 2, % of Gross $ 95,169 Federal Loans Repayment Options for Jennifer & Agnes MEDebt Solutions/EAS Group *Minimum payment $50/month.

114 Extended Repayment Plan - Agnes Monthly Payment Total Interest Interest Rate Repayment Plan # Years $ 1,556$ 242, %25 Years $ 9*$ 1, %25 Years $ 1, % of Gross $ 244,278 Extended Payment Plan - Jennifer Monthly Payment Total Interest Interest Rate Repayment Plan # Years $ 1,556$ 242, %25 Years $ 161$ 28, %25 Years $ 1, % of Gross $ 270,947 Federal Loans Repayment Options for Jennifer & Agnes MEDebt Solutions/EAS Group *Minimum payment $50/month.

115 Separate Repayment Plan - Agnes Monthly Payment Total Interest Interest Rate Repayment Plan # Years $ 1,556$ 242, %25 Years $ 9*$ 1, %25 Years $ 1, % of Gross $ 244,278 Separate Payment Plan - Jennifer Monthly Payment Total Interest Interest Rate Repayment Plan # Years $ 1,473$ 306, %30 Years $ 170$ 20, %20 Years $ 1, % of Gross $ 326,920 Federal Loans Repayment Options for Jennifer & Agnes MEDebt Solutions/EAS Group *Minimum payment $50/month.

116 Separate Consolidation - Jennifer Monthly Payment Total Interest Interest Rate Repayment Plan # Years $ 1,625$ 340,6817 %30 Years 35.46% of Gross Combined Consolidation - Agnes Monthly Payment Total Interest Repayment Plan Years & Rate $ 1,480$ 307,60630 Years 6.875% 32.30% of Gross Federal Loans Repayment Options for Jennifer & Agnes MEDebt Solutions/EAS Group

117 Private Loans Repayment Options for Jennifer MEDebt Solutions/EAS Group Standard Repayment Plan - Jennifer Monthly Payment Total Interest Interest Rate Repayment Plan # Years $ 135$ 8,8167 %15 Years Extended Repayment Plan - Jennifer Monthly Payment Total Interest Interest Rate Repayment Plan # Years $ 98$ 19,7977 %30 Years Consolidation Plan - Jennifer Monthly Payment Total Interest Interest Rate Repayment Plan # Years $ 130$ 23,5569 %25 Years

118 What a Difference a Roommate & a Few Other Expenses Make Jennifer  Total Monthly Payments = $1,760  $280/mo. Difference  $3,360/yr. Difference  $100,800 Over 30 yrs.  $163,166 if Deposited at 3.0% for 30 yrs. Agnes  Total Monthly Payments = $1,480

119 Keep Money In Its Place People who say they value money highly report that they are less happy in life than those who care more about love and friends. Source: September 2007 MONEY Magazine

120 Changing Reality & Taking Control Real change occurs most easily when there is an emotional connection made, a new relationship with someone or a group that inspires and reinforces that change. Source: Change or Die by Alan Deutschman

121 Learn More…. Research is fairly strong in noting that the people around you affect how you approach and value important decisions such as education, family and consumption; all determinates of the ability to manage money and create wealth. MONEY magazine research reported 64% of wealthy individual reported networking helped them succeed. Form A Money Support Group (MSG) or Investment Club MEDebt Solutions/EAS Group

122  Professional Financial Adviser/Planner  Attorney  Professional Accountant (CPA)  Banker  Professional Insurance Advisor  MEDebt Solutions Advisor/Coach  Financial Aid Professional while in school Build Your Financial Team MEDebt Solutions/EAS Group

123 Richer and Happier! Adopting good money management habits rather than poor ones can make you feel as much as 50 percent richer and happier. – Jean Chatzky, Today Show, October 2, 2003

124 MEDebt Solutions/EAS Group, LLC Where to Get Help:

125 Help and Information

126 Tax Tip  Buried in the October legislation includes benefits for 2008 and beyond, as well as extension of last year’s breaks is that you can once again deduct up to $4,000 of school tuition if your adjusted gross income is $80,000 or less for singles ($160,000 for joint filers).

127 Personal Finance Resources: Books The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich by David Bach The Millionaire Next Door: The Surprising Secrets of America’s Wealthy by Thomas J. Stanley and William D. Danko The Wealthy Barber by David Chilton The Richest Man in Babylon by George S. Clason Making the Most of Your Money by Jane Bryant Quinn Personal Finance for Dummies by Eric Tyson

128 Personal Finance Resources: Magazines Smart Money Money Kiplinger’s Personal Finance Medical Economics

129 Personal Finance Resources: MONEY ATTITUDE AND BEHAVIOR BOOKS Psychology and Consumer Culture Edited by Tim Kasser, PhD, and Allen D. Kanner, PhD. - provides an in-depth psychological analysis of consumerism that draws from a wide range of theoretical, clinical, and methodological approaches. The contributors to this edited volume demonstrate that consumerism and the culture that surrounds it exert profound and often undesirable effects on both people's individual lives and on society as a whole. Far from being distant influences, advertising, consumption, materialism, and the capitalistic economic system affect personal, social, and ecological well being on many levels. Authors address consumerism's effect on everything from culture, ethnicity, and childhood development to consciousness, gender roles, identity, work stress, and psychopathology. Contributors provide a variety of potential interventions for counteracting the negative influence of consumerism on individuals and on society. The book makes a strong case that, despite psychology's past reticence to investigate issues related to consumerism, such topics are crucial to understanding human life in the contemporary age.

130 Personal Finance Resources: MONEY ATTITUDE AND BEHAVIOR BOOKS Money Changes Everything by Elissa Schappell and Jenny Offill – An anthology by 22 writers, tackle the last taboo with tales of sudden windfalls, staggering debts, and other surprising turns of fortune. Although ours is a culture of confession, yet money remains a distinctly taboo subject for most Americans. A host of celebrated writers explore the complicated role money has played in their lives, whether they’re hiding from creditors or hiding a trust fund. This collection will touch a nerve with anyone who’s ever been afraid to reveal their bank balance. In these wide- ranging personal essays, acclaimed authors write with startling candor about how money has strengthened or undermined their closest relationships. Isabel Rose talks about the trials and tribulations of dating as an heiress. Tony Serra explains what led him to take a forty year vow of poverty. September 11 widow Marian Fontana illuminates the heartbreak and moral complexities of victim compensation. Jonathan Dee reveals the debt that nearly did him in. And in paired essays, Fred Leebron and his wife Katherine Rhett discuss the way fights over money have shaken their marriage to the core again and again. As a society, we talk openly about our romantic disasters and family dramas, our problems at work and our battles with addiction. But when it comes to what is or is not in our wallets, we remain determinedly mum. This is the first anthology of its kind—an unflinching and on the-record collection of essays filled with entertaining and enlightening insights into why we spend, save, and steal, ranging from the comic to the harrowing, all revealing the complex, emotionally charged role money plays in our lives by shattering the wall of silence that has long surrounded this topic.

131 Personal Finance Resources: MONEY ATTITUDE AND BEHAVIOR BOOKS Green With Envy: Why Keeping Up With the Joneses Is Keeping Us in Debt by Shira Boss. –Financially stressed Americans are the rule, not the exception with more of our nation's families going through bankruptcy than divorce. This book provides a compelling tell-all about what's really going on with the Joneses, offering a whole new perspective on financial well-being and simple, practical steps for how we can stop trying to keep up once and for all. As the silent struggle with our money is raging across America, each of us is harboring secret financial desires and discontents, but few dare confess. No matter how much we refuse to admit it, our contentment is based not on the size of our bank account but on how we measure up to those around us. Everyone, regardless of income, occupation, or net worth, wants to keep up with the Joneses, even when it means making financial messes and covering them up. In this myth shattering tour of America's mind-set about money, Shira Boss offers a tantalizing mix of hard facts and juicy gossip as she peers into the lives and checkbooks of our neighbors...and exposes the shocking gap between public image and what's really going on behind closed doors.

132 Personal Finance Resources: Web Sites The Financial Planning Association ’ s (FPA ’ s) site finds the names of Certified Financial Planners in specific areas (or call toll-free to ) and National Foundation for Credit Counseling; provides consumer counseling, debt and money management plans

133 Personal Finance Resources: Blogs for Young Adults Blogs have sprung up in recent years taking advantage of Internet anonymity to reveal to strangers fiscal intimacies the authors might not tell their closest friends in the belief that the exposure gives them discipline to reduce their debt. Online swapping tips on saving, investing and avoiding debt as well as commiserating about financial difficulties: Young Professionals Financial Blog – (http://ypfb.blogspot.com/) StopBuyinCrap.com (http://www.stopbuyingcrap.com/) My 1st Million at 33- (http://www.1stmillionat33.com/2006/06/list-of-high- yield-dividendstocks) Free the Drones- (http://www.freethedrones.com/)http://www.freethedrones.com/

134 Personal Finance Resources: Blogs for Young Adults bloggingawaydebt.com Authored by Tricia, 29, does not talk to her family or friends about her finances, and says she is ashamed of her personal debt. She posts intimate details of her financial life, including her net worth, the balance and finance charges on her credit cards, and the amount of debt she has paid down since starting a blog about her debt last year ($15,312). makelovenotdebt.com Make Love, Not Debt is authored by an engaged couple with a negative $70, net worth. The feedback from readers has not always been gentle being appalled by spending $500 on a pair of shoes and their wanting a $25,000 wedding.

135 Personal Finance Resources: Blogs for Young Adults (wereindebt.com) “We’re in Debt” was started by the self proclaimed King and Queen of Debt as a way to talk to each other about their debt. They owed $34, on their credit cards at the time, and an additional $120,000, mostly in student loans. “My wife and I have good communication skills in every avenue of life except finances,” said the King of Debt, insisting on anonymity because, he said, “We don’t want our parents to find out and kill us.” Starting the blog, he said, “was a way to communicate.” thedebtdefier.blogspot.com was started by Tricia after reading the online account of another woman, who said she had paid off her credit card debt of $19, in a little more than a year.

136 Personal Finance Resources: Web Sites Good articles on aspects of mutual fund investing Teaches basics of mutual fund investing and retirement planning Good mix of education about mutual funds, individual stocks and bonds, annuities, and insurance

137 Personal Finance Resources: Web Sites Educational, often humorous, look at the world of investing The National Student Loan Data System (NSLDS) is the U.S. Department of Education's central database for student aid; you can use the Web site to make inquiries about most of your federal loans through their entire cycle, from aid approval through closure Offers an easy-to-use loan calculator, as well as other financial-related calculators and information A resource for consumer information from the federal government

138 Personal Finance Resources: Television/Cable CNN series called “Millionaires in the Making” on CNNmoney.com featuring savers, investors and entrepreneurs, many of whom are 35 or younger.  Melody Hobson, President of Ariel Capital ABC television program "Unbroken: What You Need To Know About Money" is a compelling, practical and entertaining financial education tool that features celebrities like Will Smith, The Jonas Brothers, and others -

139 Information on how individuals can cut costs, consumption, and waste A campaign to raise awareness about the need for more diversity in medicine and an interactive resource to inspire and connect students with key information about getting into medical school Comprehensive annotated collection of information about student financial aid on the Web Personal Finance Resources: Web Sites

140 Comprehensive source for information on credit reports (and ordering your credit report) in addition to general information about many aspects of personal finance (e.g., insurance, loans, etc.) Complete listing of and tips for winning scholarships at the national, local, and college-specific level; college profiles, part-time jobs and internship info (register to use) Online subscription search engine for grants Personal Finance Resources: Web Sites

141 Personal Finance Resources: Free Budgeting Tools And Software Tracking one’s spending for several weeks; preferably a month is instrumental to understanding your hidden money behavior and habits; like what happens to the change when you break a $20 bill. We are all unique financial being and there is no single budgeting/financial planning system that’s universal therefore we often must trick ourselves into budgeting or a least find a way that works specifically for us as individuals. There is of course MS Money and Quicken, which you may or may not have installed on your computer. If not, you will have to pay for these programs. Before doing so, take a look at and try some of the free budgeting tools that are available. What’s important here is that you find something that works for you and that you get started and don’t forget about the old fashion low-tech columned paper and pencil.

142 Personal Finance Resources: Free Budgeting Tools And Software  Moneycenter.yodlee.com – (https://moneycenter.yodlee.com/moneycenter/mfalogin. moneycenter.do?_flowId=mfalogin&c=csit_key%3ACUuTi ndspqBtjyKKbHqaWTCfqd4%3D&l=_flowId:u ) - Initially just an account aggregator, Yodlee now offers spending categories which can be used to help you budget. Tracks bank accounts, credit cards, investments, loans, frequent flier miles, real estate. Compatible with many kinds of accounts and serves up the info in a very direct way. This site is most comprehensive, about the facts. Lacks of eye candy and it’s hard to find the info to help you better manage your finances.https://moneycenter.yodlee.com/moneycenter/mfalogin. moneycenter.do?_flowId=mfalogin&c=csit_key%3ACUuTi ndspqBtjyKKbHqaWTCfqd4%3D&l=_flowId:u Source: Money magazine, December 2008

143 Personal Finance Resources: Free Budgeting Tools And Software  Mint.com – Tracks bank accounts, credit cards, investments and loans. Attractive layout with many ways to display info graphically. The investment tools are comprehensive, comparing personal rates of return with major indexes and display asset allocation. The “way to save” section is thinly veiled advertising. A Money magazine top pick. Source: Money magazine, December 2008

144 Personal Finance Resources: Free Budgeting Tools And Software  QuickenOnline.com – Tracks bank accounts, credit cards, investments and loans. A polished layout with enhanced budget-building features. Quicken has strong customer support but will not allow you to sync with old desktop Quicken software and you’ll have to buy the software ($50 & up) if you want features such as investment analysis. Source: Money magazine, December 2008

145 Personal Finance Resources: Free Budgeting Tools And Software  Wesabe.com – Tracks bank accounts and credit cards using simple interface. Wesabe lets you store user names and passwords on your computer (with others, your info is stored on the site’s server). The program can’t track investments (company says that will change soon). User exchange of ideas is a key part, but membership seems to skew young. It’s best for young people who are just starting out. Source: Money magazine, December 2008

146 Personal Finance Resources: Free Budgeting Tools And Software  SimpleD - (http://dsbudget.sourceforge.net/) - An “open source Windows application designed for personal or household financial management.”http://dsbudget.sourceforge.net/  AceMoney Lite - (http://www.mechcad.net/products/acemoney/index_lite.shtml) -http://www.mechcad.net/products/acemoney/index_lite.shtml Freeware version of an offline personal finance management program. It even downloads stock quotes from the internet.  PearBudget - (http://www.pearbudget.com/ ) - An Excel spreadsheet that has definitely had a lot of time put into it.http://www.pearbudget.com/  Microsoft Office Accounting Express (http://ideawins.com/) Seems targeted at business, so this may be overkill for home budgets.http://ideawins.com/  Stackbacks - (http://stackbacks.com/blog/stackbacks-automated-budget- system/ - The “Stackbacks Automated Budget System” is more of a budgeting setup guide than a tool.http://stackbacks.com/blog/stackbacks-automated-budget- system/ Source: My Money Blog – (http://www.mymoneyblog.com/archives/2006/11/big-list-offree-budgeting- toolsand-software.htmlhttp://www.mymoneyblog.com/archives/2006/11/big-list-offree-budgeting- toolsand-software.html

147 Personal Finance Resources: Free Budgeting Tools And Software Buddi - (http://buddi.sourceforge.net/en/) - An open-source personal finance and budgeting program, which will run on any machine with Java installed.http://buddi.sourceforge.net/en/  Budget On Web - (http://www.budgetonweb.com/b.exe/) - Also more business oriented, it is a “free online system that integrates project management with contacts management and financial tools.” Free up to 5mb of storage, that is.http://www.budgetonweb.com/b.exe/  Moneytrack.in - (http://mo.neytrack.in/) - A “free online webapp that allows you to track all your expenses and income.”http://mo.neytrack.in/  Grisbi - (http://www.grisbi.org/) Another offline open-source personal finance app.http://www.grisbi.org/  MySpendingPlan - (http://www.myspendingplan.com/ ) - A free online budgeting software system that works on the ‘”envelope” system.http://www.myspendingplan.com/  PHPFIN - (http://www.phpfin.com/ ) - An open-source personal finance management program. It seems like you have to install it on your own server?http://www.phpfin.com/  GnuCash - (http://www.gnucash.org/ ) “Personal and small-business financial-accounting software, freely licensed under the GNU GPL and available for GNU/Linux, *BSD, Solaris and Mac OS X.” Does OFX and QIF imports.http://www.gnucash.org/  Budget Master - (http://www.gnucash.org/ ) - A free personal budgeting program that offers charts and visual reports.http://www.gnucash.org/ Source: My Money Blog – (http://www.mymoneyblog.com/archives/2006/11/big-list-offree-budgeting-toolsand-software.htmlhttp://www.mymoneyblog.com/archives/2006/11/big-list-offree-budgeting-toolsand-software.html

148 Personal Finance Resources: Free Budgeting Tools And Software FREE UNNAMED “HOMEGROWN” SPREADSHEETS:  Foxway Budget Tracker Spreadsheet - (http://www.foxway.com/tracker.html) – Very simple budgeting spreadsheet. Nothing fancy.http://www.foxway.com/tracker.html  My Money Blog by Neil Rothman -  (http://www.mymoneyblog.com/images/0611/budget_neil.xls) - A bit more advanced with pull down menus and better layout.http://www.mymoneyblog.com/images/0611/budget_neil.xls  Budget and Cash Flow -  (http://www.mymoneyblog.com/images/0611/budget_unknown.xlt ) Another simplistic spreadsheet, author unknown.http://www.mymoneyblog.com/images/0611/budget_unknown.xlt  Budget Worksheet - (http://www.mymoneyblog.com/images/0611/budget_tony.xls)http://www.mymoneyblog.com/images/0611/budget_tony.xls  Submitted by user Tony B. Instructions on use are included. Source: My Money Blog – (http://www.mymoneyblog.com/archives/2006/11/big-list-offree-budgeting- toolsand-software.htmlhttp://www.mymoneyblog.com/archives/2006/11/big-list-offree-budgeting- toolsand-software.html

149 Personal Finance Resources: Free Budgeting Tools And Software CLEAR CHECKBOOK - https://www.clearcheckbook.com/. - Account updating through many mobile services. - Personalized reminders and alerts. - Set spending limits. - Scratch pad for notes, goals, price comparisons, etc. - Simple editing features. GEEZEO - https://www.geezeo.com/. - Geezeo Blog. - Numerous 'learning' resources. - Product marketplace - compare various financial offers. - Provides access/linking to investment accounts as well. - Social network/financial support group. I-EXPENSE ONLINE - - Geared to detail-oriented individuals. - One-click access to features. - Test things with a guest account first. - Tips section can be browsed for budgeting suggestions. - Weekly progress chart. MINT - - Continually offering new and improved features. - No bookkeeping required. - Notifies you of account fees and finance charges. - Provides solutions based upon personal spending patterns. - Secure - uses same encryption banks use for data protection.CLEAR CHECKBOOKhttps://www.clearcheckbook.com/ GEEZEOhttps://www.geezeo.com/ I-EXPENSE ONLINEhttp://www.iexpenseonline.com/ MINThttp://www.mint.com/

150 Personal Finance Resources: Free Credit Score Simulators Below are several free websites that will use various pieces of your provided information in order to assist you in 'simulating' what your credit score is. They claim to be pretty accurate - You be the judge. In no particular order:       https://www.quizzle.com https://www.quizzle.com Source: Dr. Oleson – Financial Tips powered by FeedBlitz, LLC

151 The National Foundation for Consumer Credit Personal Finance Resources

152 Basic Blueprint to Money and Debt as Life Skill Tools! Mastering the art and skill of understanding debt, making it affordable and protecting the value of your education, your degree, training, career and the value of future earnings will allow you to do the unthinkable; Manage Debt, Build Wealth, Achieve your Goals, Be Successful and Happy all at the same time. MEDebt Solutions/EAS Group

153 Take Control of Your Money “ A penny saved is a penny earned. ” Ben Franklin - Portrait of Benjamin Franklin Engraved by J. Thomson, From an Original Picture by J.A. Duplessis

154 Remember! Keep your mind on your money and your money on your mind Calvin Cordozar Broadus, Jr.

155 Because of this presentation, “Protecting the Value of Your Prime Financial Assets: Your Degree and Career Earnings!” I am going to __________________. APTA – Member Benefit Education Finance Program & MEDebtSolutions/EAS Group, LLC

156 Good Luck and Continued Success! APTA – Member Benefit Education Finance Program & MEDebtSolutions/EAS Group, LLC

157 Bonus Material

158 Education debt is often misunderstood  PT school debt is harmful because of what is most often said and believed about it – “it’s too much!”  Such thoughts are a dangerous distraction which obfuscates the real issue; “affordability”.  Now this is not to say that the cost of a PTA, PT, DPT education and the amount of debt being assumed by students is not problematic and requires reform, it does.  Schools need to be held more accountable and transparent in their pricing and fulfillment of their social contracts.

159 To properly manage your debt you need understand your environment  Last year, despite a 2.1 percent decline in the Consumer Price Index from July 2008 to July 2009 four-year public colleges raised tuition and fees by an average of 6.5 percent. Prices at private colleges rose 4.4 percent, according to a report issued (10/20) by the College Board.  Patrick Callan, president of the National Center for Public Policy and Higher Education, called the increases “hugely disappointing. Given the financial hardship of the country, it’s simply astonishing that colleges and universities would have this kind of increases.” Article: The New York Times, October 21, 2009 – College Costs Are on Rise, As Is Concern About Effect by Tamar Lewin MEDebt Solutions - Informed Solutions For Student Loans, Debt, Money & Beyond

160 To properly manage your debt you need understand your environment  Mr. Callan went on to state, “It tells you that higher education is still a seller’s market. The level of debt we’re asking people to undertake is unsustainable. A lot of people think we can solve the problem with more financial aid, but I think we have to have some cost containment. For all the talk about reinventing higher education, I don’t see any results.”  Article: The New York Times, October 21, 2009 – College Costs Are on Rise, As Is Concern About Effect by Tamar Lewin MEDebt Solutions - Informed Solutions For Student Loans, Debt, Money & Beyond

161 Perspective  What is $500,000?  Who can relate to $500,000 – a half of a million dollars?  What does this typical repayment figure for physical therapy graduates really represent?  What can $500,000 do?

162 What Will $500,000 Get You?  Samsung - 63" Class / 1080p / 600Hz / Plasma HDTV  $3,799.98

163 What Will $500,000 Get You? 1,111 - Apple iPhone 3G - 16GB, black (AT&T) $450.00

164 What Will $500,000 Get You?  200 – MacBook Pro  17-inch: 2.8GHz  Intel Core 2 Duo4GB Memory500GB hard drive1ExpressCard/34 slot  Built-in 8-hour battery2NVIDIA GeForce 9400M M GT  $2,499.00

165 What Will $500,000 Get You?  1, GB iPod touch  7,000 songs  40 hours of video  $399.00

166 What Will $500,000 Get You?  Mercedes-Benz C-Class  MSRP: $34,650  $676 / month Estimated Payments  Estimated Market Price  Invoice $32,225

167 What Will $500,000 Get You?  Houston –Baytown - Sugar Land, $142,100  $180,100  2 - $248,800  3.6 – $139,500  3.2 – $158,300  2 – $243,200

168 What Will $500,000 Get You?  Mercedes-Benz SL 63 AMG  MSRP: $135,000  AMG-built 6.3L 32-valve V-8 engine  518 6,800 rpm  465 5,200 rpm

169 Money Changes Everything!

170 Money Change Everything! “When money speaks, the truth keeps silent.” Russian Proverb “If you want to know what a man is really like, take notice of how he acts when he loses money.” Simone Weil “With money in you pocket, you are wise and you are handsome and you sing well, too.” Yiddish Proverb “You can't force anyone to love you or lend you money.” Jewish Proverb Famous Quotes About Money

171 Money Changes Everything! Over and over again, studies show that health is linked to wealth. It even matters where a person lives. In a new analysis of Medicare beneficiaries, Stephanie Raymond and Kristen Bronner of Dartmouth College find that the lowest death rates are in the wealthiest places. In San Francisco, with a per capita income of $57,796, just 4.16% of Medicare beneficiaries die each year. But in Tuscaloosa, Alabama, whose per capita income is $24,257, the annual death rate was 5.97% - that’s a 43.5% difference. Source: The New York Times, January 3, 2007, A Surprising Secret to a Long Life: Stay in School by Gina Kolata

172 Money Change Everything! If someone developed cancer, heart disease or lung disease -– the household’s income declined by an average of more that $37,000. And its assets – its wealth - fell by $49,000 over the ensuing eight years, even though out-of-pocket medical expenses were just $4,000. Source: The New York Times, January 3, 2007, A Surprising Secret to a Long Life: Stay in School by Gina Kolata

173 What are your top priority goals for the next 5 – 20 years? List them by year with the amount of money needed to achieve each goal.

174 The rich know that’s It’s human nature and expensive to procrastinate.

175 All Workers Salaries The median salary for all workers in 2006:  $ /week  $ 3,011.67/month  $ 36,140.00/year Source: Parade magazine

176 Physical Therapist Salary By Years Experience Job: Physical Therapist (PT) Country: United States | Currency: USD | Updated: 17 Oct 2009 | Individuals Reporting: 4,703

177 Median Salary by Years Experience - Job: Physical Therapist (United States) Country: United States | Currency: USD | Updated: 17 Oct 2009 | Individuals Reporting: 4,700 Median Salary by Employer Type Job: Physical Therapist (PT)

178 PT Students - Sub-Prime Borrowers?  In increasing numbers this nearly unfettered access to student loans, represents far more money than graduates have the experience or can reasonably understand how to manage and afford.  This scenario is quite similar to the lending debacle to sub-prime borrowers for home mortgages.  The average physical therapy students is in actuality a sub-prime borrowers so the same predictable results of lending - foreclosure - should be expected.  In the case of physical therapy students and graduates it will be the value of the degree and career earnings which will be seized without the tools or protection of quick sales, loan modification, renegotiation or bankruptcy.

179 Specialized expertise and experience necessary  Few students or graduates have sufficient financial expertise or experience to know how to assess financial risk and organize, evaluate and develop an informed financial plan that will allow them to aptly meet life goals, restructure student loan debt, manage student loans payments and successfully meet other future expenses while making their life richer by creating financial security and economic stability. MEDebt Solutions/EAS Group

180 “Money & Debt are Asset Protection Life Skill Tools! ” You need informed, accurate, reliable “money- wise” information, strategies, options and solutions to successfully manage your student loans, consumer debt, money & future before, during and beyond graduation. And this isn’t something you pick up on the way home from school. MEDebt Solutions/EAS Group

181 What is your relationship with money?

182 What’s Your Money Personality  Hoarder - Budgets and saves carefully, hesitates on unplanned purchases.  Spender - Buys spontaneously and impulsively.  Worrier - Talks a lot about money. May be obsessed with it.  Avoider - Hates to deal with money at all.  Money Monk - Thinks money is dirty and corrupting.  Money Amasser - Self-worth depends on how much spent or saved. Take the Money Personality Quiz at: Source: Money Harmony: Resolving Money Conflicts In Your Life and Relationships, by Olivia Mellan

183 What does MONEY mean to you?

184 The Psychology of Money Economics is about rational choices: Spending vs. Saving Now vs. Later Rational vs. Irrational MEDebt Solutions/EAS Group

185 What you money says about you The way you spend money, yours and other people’s money reflects your values and what you think is important in the world.

186 The Psychology of Money  Psychologists and social scientist say our inability to address issues of money and the envy it causes is creating more financial and psychological distress than we can imagine.  We cannot do or have everything we want!

187 The Psychology of Money  Putting a purchase on a credit card, even one with a zero interest rate entices you to be less likely to shop frugally.  Studies suggest that people who pay with plastic spend more and tend to forget how much they spent.  The offer of “FREE” products trigger an emotional reaction that cause consumers to lower their guard and buy things they don’t need in order to qualify. MEDebt Solutions/EAS Group

188 The Psychology of Money  Our nature is being molded powerfully by the media.  We must combat which are packaged to look terrible.  We allow ourselves to be mislead – for example Starbucks offers three sizes: (Ask for a small and you get a Tall which is 12 ounces, not the Short which is 8 ounces and cheaper.  We overspend to keep up with neighbors and friends; take jobs we’re not happy at to keep up a lifestyle we think we should have.

189 The Psychology of Money Sometimes it seems as if we must be doing something wrong because we can’t possibly afford what friends and neighbors can – even if we don’t want it. The accessibility and availability of debt has created a friction that wasn’t there 20 years ago. We don’t have a grip on who can afford what – including education. Your external lifestyle is a lot lower when you're living within your means – you can see extravagance, but not financial security. Source: Shira Boss, author of Green With Envy: Why Keeping Up With the Joneses Is Keeping Us in Debt, Warner Books, 2006.

190 Income and Happyness  Researchers have found that greater income and wealth lead to greater happiness.  However, it is relative to our expectations.  Aspirations grow along with income, and undercut the favorable effect of income growth on happiness.  People think they will be happier in the future because they think their aspirations will be the same while income grows. Source: Income and Happiness: Towards a Unified Theory, Richard A Rasterlin, The Economic Journal, 111 (July), 465 – 484. Royal Economic Society 2001

191 More Money ≠ More Happyness After you cover the basics, being much richer doesn’t make you much happier. 42% of people with incomes of $50k - $89K and 43% of people with incomes of $90k – plus are “VERY HAPPY” Source: September 2007 MONEY Magazine

192 The Pursuit of Happyness  A man or woman earning $500,000 a year is not usually 10 times as happy as a person earning $50,000 a year.  The $50,000 earner still enjoys most of the conveniences of the modern world.  Even if more money makes people happier, it appears to so at a declining rate, which places a natural check on the inequality of happiness. Source: Incomes and Inequality: What the Numbers Don’t Tell Us, Economic Scene, by Tyler Cowen, professor of economics at George Mason University and co-author of a blog at January 25, 2007, The New York Times

193 Better to be upbeat rather than blissful if you want to be rich.  A University of Illinois study where people who rated them selves on a 1-to-10 happiness scale (with 10 being the happiest) found “income did increase alone with happiness, but not at the very top.”  Happy – but not too happy – people are strivers.  Jean Chatzky writes, “They’re (strivers) interested in making the sorts of changes necessary to get ahead in life, including engaging in competition (not always a happy pursuit), obtaining more education and changing their behavior when what they’re doing now isn’t working.”  “The 10’s, on the other hand, “are too complacent to adjust,” Chatzky writes.  Duke University researchers found that “extreme optimists” overspent and accumulated debt. Source; Paul B. Brown, What’s Offline, The New York Times, June 28, 2008


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