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Students learn to hold onto money
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by Logan Jaffe
Wednesday, November 28, 2007
The University of Wisconsin's College Republicans sponsored a financial planning speaker Tuesday night to help students understand how to save money after college.
UW alumnus Todd Bramson of the North Star Resource Group said most college students graduate feeling they are in debt. However, he says there are numerous ways to accumulate net worth.
"Chances are you'll graduate with a negative net worth," Bramsom admitted, but said zero net worth is not necessarily bad for recent graduates.
By recalculating one’s assets, Bramson said one may have more worth than they previously thought. Through Bramson's "Pyramid of Financial Needs," students can see their options once their net worth increases.
"People always say they're fiscally responsible, but no one really knows what that means," College Republicans Vice Chair Mattie Duppler said. "So many students feel like they're just set with their credit cards, but there are other ways to understand how to keep and store your money."
The pyramid displays basic financial processes — emergency reserves, debt and risk management — at the bottom, which students would first become familiar with. Toward the top of the pyramid is speculation and "potential wealth success," which tells students when their income levels are high enough to take risks with their money, Bramson said.
"A lot of college students are also always focused on the here and now, but [this lecture] was very futuristic thinking and directed at us," Duppler said. "It's really good exposure to economics, especially for those graduating this year."
To provide a simplified explanation of tax forms, Bramson consolidated a 40-page tax form to one page. He also emphasized the importance of understanding tax brackets so students can save the most money.
"You need to know how much your dollars are being taxed at," Bramson said. "All it takes is one dollar from an account your parents set up when you were 4, and you're in the upper tax bracket."
Bramsom also encouraged students to put money in Roth IRA accounts to ensure tax-free growth. He also advised against investing short-term money in the stock market, and suggested using money market mutual funds instead.
"A common mistake among college students is their short-term money is invested too aggressively and their long-term money too conservatively," Bramsom said. "[Money market mutual funds] are completely liquid and completely safe."
According to College Republicans Chair Sara Mikolajczak, the club has been meaning to discuss fiscal responsibility for a while. Recent UW graduate Ryan Keshemberg, who works for North Star, asked Mikolajczak to arrange the presentation, and she agreed.
"A lot of people around campus focus only on social issues and not so much the financial aspect, so it's a good idea to learn about something we didn't know that much about," Mikolajczak said. "It's a real-world advantage and responsibility."
Anonymous (November 28, 2007 @ 7:53am):
I'm waiting for someone to make a crack at the College Republicans for bringing in a financial planner. I think it's a good idea for everyone to get this training, however. Americans are woefully uneducated in financial issues.
Anonymous (November 28, 2007 @ 12:42pm):
Is this really news? So what if 20 people showed up for a student org meeting? Why can't you print stories from groups other than ASM, College Dems/Reps, and WISPERG. WASB did this 2 years ago and drew 300 students and it didn't make the papers.
BH - you really need to improve your outreach! I am sick of this political garbage.
Todd Bramson (November 28, 2007 @ 2:43pm):
As the speaker, I need to clarify a mistake in the article. Another dollar of interest won't jump you into the highest tax bracket. It will be taxed at whatever bracket your taxable income is at.
We're very motivated to help all UW students and grads make smart financial decisions and welcome the opportunity to speak to any group that is serious about bringing these important ideas to their members.
Carl Slicer (November 29, 2007 @ 10:03am):
I think these classes can be expanded upon into several sessions.
#1) Respect: What I did not see mentioned here is the word "Respect". When you have respect for your own property you can focus on your goals.
#2)OPM: Some college could do a paper on
"OPM", Other Peoples Money. When it comes time to sit around & vote away OPM, one call always find a justification for doing it. IE: What school board has not used the term "But this will help the children". How different is this from Eminent Domain possesion ? Isn't money considered property just like a home or car is ?
#3) Time: Time is just as important as funds are. IE: Let's say the state of Kansas has a new lottery game. $1 million dollars. But the payout is $1.00 for 1 million years. Oh. now Time becomes very important. For instance, why not take the Mega Power Ball lottery. Why not make each person a winner of $1 million dollars as the payout. Why would someone need $7 million or $61 million. If you left a estate worth $ 6 million to 6 children, wouldnt you give away $1 million to each child ?
#4) Taxes: What collge teaches Taxes other than a CPA class ? The Powerball winner from Conn that won $15 million elected the lump sum & took home $7 million. What the Heck did the government do to deserve $8 million in taxes ? Just becuase is not an excuse.
"It's not how much you have, it's how far you have to fall"
Carl Slicer, Vernon, CT, blog editor, www.VernonGop.com, "Who's in your wallet ?"
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