Posts Tagged ‘investing’

Law School Tuition: USA Today Article: Investing won’t get you to law school; saving will

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June 21, 2010 USA Today: Investing won’t get you to law school; saving will – USATODAY.com. The author providing the advice is very frank, even if you INVESTED the $2500, there’s no reasonable way that the return on the stock investment will cover the costs of attending law schools. A gamble won’t cover a different gamble! Here’s the piece:

Q: What can I invest in that will turn my $2,500 savings into enough to pay for law school? A: We are often told that the stock market can richly reward patient investors. And that is true. But what you’re asking goes beyond what can be reasonably expected. You mean that the average person starting law school cannot afford to pay for it by investing or saving whatever money they have? Doesn’t that just force them into Sallie Mae’s prickly embrace? Oh, they just can decide NOT to go as an option as well.

Let me explain. You’re probably hoping I’ll rattle off a few amazing stocks that will rocket in value to turn your $2,500 into law school money. The odds of picking a couple of stocks that will do that are tiny.

Let’s first consider how much money you’ll need. The median tuition for one year of law school in 2008 was $16,836, according to the American Bar Association. And tuition has been rising about 9% a year.

That means if you enrolled in 2010, the price of the first year of law school would likely be $20,003. And that’s just the first year three. Your total tab would be somewhere around $65,572.

So, you’re hoping to turn $2,500 into $65,572. Let’s assume you’d want to have this happen in two years. For this incredible increase in wealth to occur, you would need a stock that rises 2,522%, or 412% on average for two straight years.

The reality: Stocks, on average, return about 10% a year. And lately, stocks haven’t even been doing that. Stocks aren’t the only thing not returning an investment.

If there were any stocks that could generate the kind of return you are looking for, they would come with such gut-wrenching risk you could also completely decimate your original $2,500 investment in the process. Like attending law school in the first place.

Don’t just take my word for it. Parallel comment: just read the blogs.

Over the past two years, not a single stock in the Standard & Poor’s 1500 index, which includes stocks of all sizes, rose 2,500% or more, according to Standard & Poor’s Capital IQ. In fact, not a single stock rose more than 2,000%. Over the past ten years law school tuition rose, while law graduates unemployment increased, so the actual product decreased in intrinsic value though it is still being sold based on its tradition and prestige.

To be more precise, the best-performing stock rose less than 400% the past two years. So even if you picked the best stock in the S&P 1500 universe, not an easy feat, your $2,500 would have been worth $12,500, a far cry from what you need to pay for law school.   Parallel comment: Not all law schools are the same, should you even choose to attend the best, what you invest will still not get you to the goal of being employed and paying off those student loans.

What’s the moral of this story? Don’t look to the stock market to pay for your law school, especially when you’re starting with $2,500. You’ll need to invest, yes, but more important, you’ll need to save more, and consider grants, scholarships and other financial aid. [emphasis mine].People are willing to do any thing for a chance to attend law school, instead this financial advisor states that the only way the writer will be able to afford to attend law school is through financial aid=student loans=Sallie Mae; who is not as benevolent as she sounds.

Smart investing can accomplish great things, but what you’re looking for goes beyond what an investor could hope for in his or her wildest dreams. In other words, it’s neither wise to invest in a bad stock market or that other type of investment “law school.”

Black Unemployment: “I Have Mine and You Have Yours to Get”

“I Have Mine and You Have Yours to Get.” This is the mentality of many Americans, but I find it significant among black Americans. Excluding the black upperclass, I notice a difference in the recruiting, networking and effort of minorities to help one another. This is likely due to several factors: 1) as in previous posts, “Blacks” have been disproportionately excluded from advancement in this country: municipal slavery, Black Codes, Jim Crow, institutionalized racism, ebbs and flow in the overall economy, difficulty in assimilating despite education advancement; 2) Blacks are reluctant to help one another, many are of the persuasion that they worked so hard to advance that if they recommend the wrong black person their job/job prospects will be damaged 3) Wealth: Those blacks who are wealthy see no purpose in helping middle class blacks, as it is ‘not their problem,’ so long as they can attend their 100 Black Men Meetings, Links Club meetings, send their children to ‘Jack and Jill’ and boat the existence of their fellow human beings suffering is of no consequence. As many of these wealthy blacks embody this mentality, on the rare, such as the former owner Bob Johnson who sold BET several years ago as he was satiated with the stereotype and redundancy of the music business. He started BJI Industries with the portfolio of seeking highly skilled black businessmen and women.

As various persons (Congressional Black Caucus, lawmakers) mail the U.S. President for resolution to the hardest hit population of the current economic crisis-Black Americans, it is a mystery whether an answer will be in the affirmative. The following are more stories concerning black unemployment:

Obama lobbied on black unemployment, immigration, March 11, 2010, http://www.reuters.com/article/idUSTRE62A5OO20100311

DR. BOYCE: Obama Needs To Fix The Black Jobs Situation,  April 5, 2010, News One http://newsone.com/nation/boycewatkins/dr-boyce-obama-needs-to-fix-the-black-jobs-situation/

Obama ignores black joblessness at his own peril, April 06, 2010, http://www.istockanalyst.com/article/viewiStockNews/articleid/4004812
White Unemployment Goes Down as Black Unemployment Goes Up: Experts Explain Why, April 7, 2010, The Seattle Medium: http://www.seattlemedium.com/news/Article/Article.asp?NewsID=102405&sID=3&ItemSource=L
Was the recession more difficult for state’s people of color?, April 7, 2010, http://www.clarionledger.com/article/20100407/COL0412/4070313/1171/OPINION
This may be an opportunity for professional blacks to do what working class blacks did in the early 1900s when shut out of the greater society, create one’s one opportunities and reciprocate for the fellow man who suffers from the same trial.