Blyth (BTH) calls itself a ?home expressions company?. Most people call it a candle company. Neither description is entirely accurate.
Blyth can rightly be called the world?s largest scented candle company, because larger competitors like S.C. Johnson and Sara Lee (SLE) are primarily engaged in other businesses. Like its smaller rival The Yankee Candle Company (YCC), Blyth is primarily a scented candle company. However, unlike the Yankee Candle Company, Blyth has substantial non-candle related operations ? hence the ?home expressions? designation.
I?m not sure what a home expression is; but I?m pretty sure coffee doesn?t qualify. From that fact alone we can safely say Blyth isn?t really a home expressions company (last year, Blyth acquired Boca Java, an online retailer of coffee, tea, and hot chocolate). Blyth may not be a pure play scented candle company or a pure play ?home expressions? company; but, that doesn?t mean it?s merely a hodgepodge of unrelated businesses.
There is a method to Blyth?s madness. From the manufacturer?s perspective, candles, ceramics, frames, vases, coffee, and gourmet food are very different products. But, from the customer?s perspective, they serve a similar purpose. Essentially, Blyth sells personal indulgences to women at affordable prices. That?s a big business in the U.S., Canada, and Europe. It also happens to be a good business.
Profitability
Since 1998, Blyth has had an average return on assets of 10.33% and an average return on equity of 18.55%. One of the best ways to measure the inherent profitability of a business (independent of its current capitalization structure) is to use the pre-tax return on non-cash assets (PTRONCA). Over the past decade, Blyth has had a PTRONCA of about 19.21%, which is very good ? although far from great.
To put that 19.21% PTRONCA into perspective, think of it this way: independent of its capitalization structure, Blyth generated a little over nineteen cents for every dollar invested in the business (before taxes).
Essentially, this means that if Blyth hadn?t utilized any debt whatsoever it would have had a return on equity of roughly 12% (after taxes). Although a 12% return on equity doesn?t sound all that impressive, achieving a 12% ROE without using any debt would actually represent a solid performance for most public companies under most economic conditions.
Of course, over the last decade Blyth actually averaged a much higher return on equity (18.55%). During this period, Blyth utilized a material (but far from egregious) amount of debt. As a result, the company surpassed its own stated goal of achieving a 15% annual return on equity.
Based on Blyth?s past ROA and PTRONCA, it appears to be a good business. If we put aside GAAP accounting for a moment and look at the economic earnings of the business, we?ll see that Blyth has actually performed a bit better than its reported net income figures suggest.
Cash Flow
Blyth?s free cash flow margin was excellent in each of the last several years. For the past five years, the company?s FCF margin has ranged from 5% to 12%. Many businesses would be satisfied with a 5% free cash flow margin. So, even when Blyth was at the bottom of this range, it was generating plenty of free cash flow.
Blyth?s free cash flow has been very high relative to its reported net income. Over the past ten years, Blyth had an average reported net income of $70.2 million versus an average free cash flow of $79.5 million.
Unfortunately, this gap would be entirely erased if free cash flow was reduced by the amount Blyth has spent on acquisitions. From a shareholder?s perspective, such a reduction is appropriate. Acquisitions eat up cash in exactly the same way an investment in a new plant does.
However, it?s worth considering the two lines separately, because it?s much easier to match cash outflows with specific acquisitions than it is to match cash outflows with specific investments in an existing business. This is especially true when looking at a company like Blyth, because some of the acquisitions are in different businesses (and different geographic locations).
Blyth has been able to consistently generate quite a bit of free cash flow. Over the past ten years, cash flow from operations (CFFO) has averaged $93.65 million. The latter half of the past decade has been even better as a result of sales growth. During the past five years, Blyth?s CFFO has averaged $142.64 million.
During that same period, free cash flow averaged $125.18 million before acquisitions but only $60.52 million after acquisitions ? which is even less than the company?s average reported net income of $72.16 million during the same period.
What does all this mean? For one, it means Blyth?s free cash flow has grown far more than its net income over the past ten years. This isn?t surprising, considering Blyth invested much more heavily in cap-ex from 1997-2001 than it did from 2002-2006. That?s normally a good sign, but there are a few problems here.
Slowing Sales
Blyth?s sales growth has slowed considerably during the last five years. Before 2001, the company had been growing sales at 20% or more a year ? without a lot of spending on acquisitions. After 2001, sales growth slowed to the mid single digits, despite an increase in the amount of cash being used for acquisitions. Slowing sales growth is clearly a concern. However, it may not be entirely specific to Blyth.
During the early and mid 1990s, the growth in scented candles within the United States was tremendous. By 2000, more than 75% of all candles sold in the U.S. were scented. At that time, Blyth estimated that only 5% of all candles sold in Europe were scented. So, a very large part of the growth in scented candles within the U.S. was simply a one-time migration from non-scented candles to scented candles.
In an August 1999 interview with The Wall Street Transcript, Blyth?s Chairman & CEO, Robert Goergen, illustrated the degree of penetration within the U.S. by citing a study conducted by his company: ?Blyth has done research the last two years that indicates that when asked of women ‘have you purchased candles in the last six months?’ 67% of a random sample will say that yes they have. That percentage ranks with women’s purchases in the last six months very close to lipstick and face makeup, which means that candles are a fairly broad and relatively routine part of everyday life.?
(Transcript)
Once a product has achieved such penetration, it is inevitable that the rate of sales growth will slow. Sales of candles are limited by the number of women in the United States, because men will not buy scented candles (except perhaps as gifts for women).
So, once more than two-thirds of American women say they?ve recently bought a candle and more than three-fourths of all candles sold in the U.S. are scented, the fact that the growth in sales of scented candles is slowing should be seen as inevitable rather than remarkable.
It?s hard to track total sales of scented candles, because they account for a very small part of a great many different retailers? sales. Also, while Blyth and Yankee Candle are public companies, many of their competitors are privately held. The rate of sales growth at both Blyth and Yankee Candle has slowed noticeably in the last few years. So, Blyth?s recent experience is clearly not unique.
Troubled Times
Morningstar?s website lists Blyth?s stock type as ?distressed? ? which strikes me as a tad extreme. However, there?s no denying Blyth is now facing some of the toughest challenges it has had to contend with in many years.
Blyth?s Chairman and CEO began his most recent letter to shareholders as follows:
?Fiscal 2006 was a very challenging year for Blyth ? in many ways, the most challenging in our nearly 30 year history. Sales growth across North America and Europe was difficult to achieve as consumers, faced with record energy prices, had fewer discretionary dollars than in years past. Moreover, the impact of double-digit cost increases in all of our major purchased commodities and freight had a dramatic impact on our financial performance.?
Later in his 2006 letter to shareholders, Mr. Goergen put the increased commodities cost into perspective:
?Let me offer some context on what the doubling in price of a barrel of oil means to Blyth. The cost of paraffin wax, a byproduct of the petroleum refining process, increased approximately 20% over the past year, as strong demand continued while capacity declined following the impact of hurricanes on Gulf refineries. Approximately 100 basis points of Blyth?s fiscal year 2006 gross margin decline resulted from higher paraffin, freight, and other commodity costs.?
Blyth has three stated long-term corporate goals:
- 5-10% annual sales and earnings growth
- 10-12% operating margins
- 15%+ return on equity
For the year, Blyth experienced a slight decline in sales and a steep decline in earnings. The company?s operating margin was 3.6% (well shy of the 10-12% goal). Blyth?s return on equity also plunged, falling from 17.42% to 4.90%. In other words, the company fell far short of each of its three goals during fiscal year 2005.
Second Quarter
During the current fiscal year, Blyth?s results have only worsened. On August 31, 2006, the company reported a second quarter operating loss of $27.7 million compared to a $16.9 million operating profit in the year ago period. All of last quarter?s operating loss (and most of the difference between this year?s results and last year?s) was attributable to a non-cash goodwill impairment charge of $36.8 million.
Last year?s second quarter was also helped by a $5.5 million reserve reversal. Excluding these items, second quarter operating profit was $9.0 million in the second quarter of this year versus $11.4 million in the second quarter of last year.
Blyth also took a $68.6 million loss on the discontinued operations of its European wholesale business. In all, Blyth reported a net loss of $89.4 million during the second quarter of this year versus net income of $4.2 million during the year ago period.
Net sales for the last six months were essentially flat. Sales for the first half of the fiscal year fell by 0.40%, dropping from $545.1 million a year ago to $542.9 million this year.
The Good News
The company is in much better shape than these recent earnings reports suggest. Blyth?s Restructuring efforts have obscured its relatively normal operating results. Excluding the restructuring, Blyth?s performance has still been far weaker recently than it had been from 1997-2001.
However, the company will not continue to report losses for years to come. Even over the last twelve months, Blyth has generated nearly $100 million in cash from operations and over $80 million in free cash flow. So, the net loss is actually somewhat deceptive when considering the company on a continuing basis. These losses will not continue.
The Bad News
Blyth does face real challenges ? and not just the short-term challenges presented by higher commodity costs.
Blyth also faces the prospect of declining direct selling revenue within the U.S. Over the last year, the number of independent sales consultants in the company?s U.S. PartyLite business fell by more than 7%. There were approximately 24,000 independent consultants this year versus 26,000 a year ago.
This decline in the number of active independent sales consultants caused a 5% decline in sales for the company?s U.S. direct selling operations. While the number of consultants in Canada was flat and the number of consultants in Europe was actually up this year, no one would be surprised by a continuing trend towards fewer active independent consultants and thus lower sales within the direct selling business as a whole and the U.S. segment in particular.
Direct Selling
Blyth has long been involved in the direct selling business. The company acquired PartyLite in 1990. That was four years before Blyth?s 1994 IPO; so, PartyLite has been a part of Blyth for the entirety of that company?s history as a public company.
Direct Selling accounts for approximately 44.7% of Blyth?s total revenues. The company?s PartyLite subsidiary has more than 45,000 active independent consultants selling in the U.S., Germany, Canada, the U.K, Austria, France, Switzerland, Finland, Australia, and Mexico. Approximately 24,000 of these 45,000 consultants sell within the United States. These consultants sell scented candles and other accessories via the party plan method of in-home selling.
In addition to its PartyLite subsidiary, Blyth now owns two other party plan marketers: Two Sisters Gourmet and Purple Tree. Two Sisters Gourmet is a gourmet food company. Purple Tree is a crafts oriented business. At present, these businesses incur multi-million dollar operating losses as Blyth invests to grow them into larger, more profitable businesses.
Regardless of their current operating performance, these businesses do seem to be a good fit with Blyth?s existing PartyLite business and appropriate new ventures for the company to pursue. Of course, only time will tell if any of these ventures develops into the kind of larger, more profitable direct selling business Blyth is hoping for.
Valuation
Blyth?s current price-to-earnings, EV/EBIT, and other such ratios are meaningless, because of the company?s recent losses.
During the last ten years, Blyth has had an average EBIT of $113.47 million. During the last five years, Blyth?s EBIT has averaged $113.77 million ? essentially the same as the company?s ten year average EBIT.
Blyth?s current enterprise value-to-EBIT ratio is very high, because the company only reported $32.03 million in earnings before interest and taxes during fiscal 2006.
Blyth?s EV/EBIT ratio would be much more reasonable if computed using the average EBIT from past years. Depending on exactly how you calculate both the company?s current enterprise value and its average EBIT from past years the ratio will vary slightly. Regardless, this ?normalized? EV/EBIT ratio would be around 8.7.
That?s a fairly low EV/EBIT ratio, but not an absurdly low one. To put it in perspective, invert the ratio to get the EBIT/EV yield (essentially a pre-tax earnings yield comparable to the yield on a taxable bond). An EV/EBIT ratio of 8.7 translates into an EBIT/EV yield of 11.49%. Obviously, that?s a good yield ? especially in the current low yield investment environment. However, there are better yields out there.
To be fair, the average EBIT numbers I gave may be unduly conservative as normalized numbers, because they include Blyth?s abysmal EBIT of $32.03 million in 2006.
A better normalized figure would probably be Blyth?s average EBIT from 1999 ? 2005. Those seven years may be the most representative, because they neither penalize Blyth for its extraordinarily poor 2006 performance nor for its far lower total sales prior to 1999 (remember, Blyth had once been quite the growth story).
During the seven year period beginning in fiscal year 1999 and continuing through fiscal year 2005, Blyth?s average EBIT was $134.40 million. If this average were used as Blyth?s normalized EBIT, Blyth?s EV/EBIT ratio would come in a bit lower at 7.34. That translates into an EBIT/EV yield of approximately 13.63%.
Buying a Company vs. Buying a Stock
As a business, Blyth is clearly underpriced. If I were drawing up a list of businesses selling for less than they?re worth, Blyth would be near the top.
If you could buy the entire business by merely paying the current enterprise value, you?d have yourself a very nice deal. But, you can?t. You can only buy small pieces of the business via the stock market.
No one could buy the entire business at the price at which each piece is selling in the open market. So, in that respect, you?re actually getting a better bargain than you would if you had to acquire the entire business.
Unfortunately, there?s a downside. Buying the entire business is an attractive opportunity, because the acquirer could use the company?s cash flow as he saw fit. Buying a small piece of Blyth in the stock market doesn?t offer this kind of control over the allocation of capital. That?s potentially a very big problem, because cash can be squandered.
Has Blyth squandered cash in the past? Not really. While it has acquired other companies (and so far has little to show for some of those acquisitions), it has generally made these deals at reasonable if not rock bottom prices. There are many other public companies guilty of paying far more for far less.
On the other hand, from the perspective of a 100% owner, Blyth?s free cash flow has not been successfully reinvested in the business during the last several years. The returns produced by additional capital (in the form of acquisitions financed with free cash flow) have been meager at best ? at least in terms of creating additional free cash flow.
Over the last five years, Blyth spent $323 million on acquisitions, $230 million on share repurchases, $86 million on dividends, and $66 million on capital expenditures.
Right now, the best use of cash would certainly be to buy back stock. At these prices, investing in Blyth makes a lot more sense than investing in another business via an acquisition. Hopefully, Blyth?s management recognizes that fact and will act accordingly.
Conclusion
But, should you invest in Blyth? As always, that?s ultimately a personal decision. A lot of people don?t want to invest in companies in the midst of such upheaval. That?s fine.
However, failing to see the value in Blyth, simply because of its most recent reported results is not fine. In fact, it?s a very common and very costly mistake.
You will always overweight the last datum in a series. It?s nearly impossible not to. Just as it?s nearly impossible not to believe the current economic cycle will be different from all the rest.
If Blyth?s most recent results occurred five years ago, you would see them for what they are ? an aberration. But, because they are the company?s most recent results (and the very last bit of information you have to go on) you?ll likely see them as the beginning of a new and terrible trend.
Human history favors the interpretation that years of past data are more informative than a single year of ?current? data. Unfortunately, human history also favors the interpretation that this fact will only be obvious in hindsight.
Future operating results will determine whether Blyth is a good buy today. I don?t know what those operating results will be. However, I do know they don?t have to be particularly good to justify buying the stock at its current price.
Considering how great Blyth?s cash generating ability is relative to its current enterprise value, an average operating performance from Blyth will lead to above-average returns for the company?s shares.
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Geoff Gannon writes a daily value investing blog and produces a twice weekly (half hour) value investing podcast at =>http://www.gannononinvesting.com
On Monday, Sumner Redstone fired Viacom?s CEO, Tom Freston. Yesterday, Viacom announced that its Board of Directors had appointed Philippe Dauman President and CEO and Thomas Dooley Senior Executive V.P. and Chief Administrative Officer (a newly created position). Mr. Dooley?s role is expected to be similar to that of a Chief Operating Officer.
Both Dauman and Dooley are members of Viacom?s Board of Directors. They served in key positions within the previous incarnation of Viacom, which was split into two separate public corporations, Viacom (VIA) and CBS (CBS), approximately eight months ago. Sumner Redstone is the Chairman of each company. Viacom?s new CEO, Philippe Dauman, will report to Mr. Redstone. Thomas Dooley will report to Mr. Dauman.
Although The Financial Times went with the no nonsense headline ?Freston Removed as Chief of Viacom?, I fear The Wall Street Journal may have had the more accurate headline: ?Ouster of Viacom Chief Reflects Redstone?s Impatience for Results?. In fact, I couldn?t have said it better myself. Of course, I was planning on writing more of a personal opinion piece than a front page article (the story made the front page of both the FT and the WSJ). Still, I can?t fault The Wall Street Journal for putting the painfully obvious in big print.
The Journal article (which is a good outline of the whole affair) won?t encourage faith in Sumner Redstone among Viacom?s shareholders. It begins by quoting Mr. Redstone?s assurance (given just six weeks before) that he could imagine ?no circumstance? under which he would fire Mr. Freston. Cut to Monday, at Sumner?s estate, where Tom Freston, a 26 year company veteran, is told he has managed to lose his job, just eight months after being given the helm of the new (CBS-less) Viacom.
The most obvious objection to Mr. Freston?s firing is simply that he wasn?t given enough time. There are billions of people on this planet and it took more than eight months to produce the majority of them; so, I imagine doing something truly remarkable, like steering a media company through troubled, transitional waters, takes quite a bit longer.
The other objection is that Freston had already proved himself a capable executive. He may not have been able to answer the question ?What have you done for me lately??. But, he had built up quite a reputation at MTV. Recent results have taken some of the shine off that golden boy (the channel, not Freston, who is no golden boy at age 60).
Actually, MTV is more than a golden boy; it?s Viacom?s crown jewel ? accounting for about 70% of the company?s revenue and nearly all of its profits. The aforementioned Journal article fears ?Mr. Freston?s departure could lead to a wider shake-up at the company, particularly within MTV networks, much of whose management has been with the company for years and is intensely loyal to Mr. Freston.?
Those fears are rational. Any time an executive this connected to a particular division is lost there is a danger others may follow ? especially when such an unceremonious exit is forced upon a company vet by the powers that be. In this case, the (perceived) motives of those powers is also a cause for concern.
There?s no doubt many at Viacom now see the long, decrepit arm of Sumner Redstone reaching out from his Beverley Hills estate and reasserting his grip on the cable properties that were once buried deep within his corporate behemoth.
At the time of the CBS / Viacom split, I knew Viacom would trade at a price that would keep it well off my investment radar. If anything, I thought CBS would be the more likely opportunity. Right now, I?m not tempted in the least by either stock. But, I have found myself much more interested in Viacom as a business.
The one really exciting aspect of the CBS / Viacom split was the idea that an MTV native would be running the new company. Viacom?s properties are very different from those owned by CBS. There was (and still is) an opportunity here for Viacom to become a content focused company.
CBS really isn?t content focused ? and it shouldn?t be. That company?s biggest competitive advantage is owning a U.S. TV network. There are only a handful of such networks and each is a franchise (albeit a waning one).
Simply controlling a network, regardless of the quality of its current programming, has value. The situation is analogous to owning a Major League Baseball team, which has some value regardless of the quality of the players currently under contact.
Broadcast networks are in a very different position from cable properties, where excluding a handful of properties (e.g., ESPN, Discovery, and the Food Network) competitors have no real advantage in attracting good programming. Many large media companies are built around delivery (though they have managed to delude themselves into thinking otherwise).
Content and delivery are two very different businesses that owe their marriage more to the egos of media moguls and the capital of the investors who buy their securities (both equity and debt) rather than to any natural economic synergy.
The origin of good content is always a choke point; the delivery of such content almost never is. It takes only two competing buyers to make a market. I?ve never been convinced that serving thousands of small customers is really a safer and more profitable business than serving a few big ones (except in high volume, low margin businesses where a large customer playing hardball can force you to eat your unused capacity). In cases where the product is unique and the right to use that product is exclusive (as is often the case in the media business), the number of different owners of the various delivery systems becomes an unimportant point.
The broadcast networks are an exception ? a living relic of a bygone era. They have a competitive advantage that isn?t derived solely from controlling content. They have an established network, which acts much like a large installed base by providing a beachhead of access and familiarity from which an offensive of solid programming can be launched into millions of American homes.
Cable properties can?t emulate the networks. But, they can build finite competitive advantages through bits of good content that can be milked for a time. Changes in technology will never eliminate the choke point that accompanies good content. It will exist online and offline just as it has existed in print and pictures.
Maybe Viacom?s new management will be focused on providing good content ? but, I doubt that. Somehow I suspect they will be more interested in doing deals and selling Wall Street on Viacom?s future prospects. Such actions would be consistent with both their own backgrounds and with Sumner Redstone?s expressed tendencies.
A Financial Times article entitled ?Jumping Jack Crash: Digital Kills the Video Star? ends with a quote from Mr. Redstone: ?We will seek out every sensible deal ? whether in the digital space or otherwise?And?we are determined not to let it get out of our hands.?
Those are scary words for investors who have entrusted their capital to Viacom. When a public company convinces itself it can?t afford not to do a deal, it usually gets the deal ? and shareholders pay the price.
There are real problems at MTV ? and real challenges at Viacom. Both The Financial Times and The Wall Street Journal noted that ratings for the MTV Video Music Awards were down 30% this year. That?s on top of a decline in ratings the year before. The internet also presents challenges (and opportunities) for Viacom. But, are Dauman and Dooley really any better equipped to tackle these problems than Tom Freston was? It?s difficult to imagine anyone better suited to run the new Viacom than Tom Freston was.
This is a big step backwards for Viacom. The benefits of autonomy that might have been reaped under Mr. Freston are unlikely to flourish under Dauman and Dooley, who are, by all accounts, legates of Chairman Redstone. The leash has been tightened.
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Geoff Gannon writes a daily value investing blog and produces a twice weekly (half hour) value investing podcast at:
http://www.gannononinvesting.com
February 5, 2008
Trading the FOREX market is considered one of the riskiest forms of investment. As volatility is the name of the game, and because margins are huge (up to 200x), the only way to protect your trading capital is to employ a coherent Risk Management strategy.
While the trading desks of hedge funds and investment banks have to take into account several portfolio optimization procedures, as an individual operator, trading just one currency pair is often the best approach.
Thanks to strong correlation between different currency pairs, be it positive or negative, it only makes sense to focus both attention and resources on just one pair. Among other important advantages, the trader can become familiar with certain habits of a currency pair, as daily range, best time of day to trade it, or main actors.
As the primary objective of a professional FOREX operator is the protection of his or her trading capital, and not the profit, each trading decision must be accompanied by a comprehensive plan to protect this capital.
You have to deal with this term, protection, from a trader?s perspective, as opposed to the general understanding. In trading terms, by protecting your capital means offering you as many chances as possible to stay in the game, to live to fight another day, without being forced to close down the business. This means that you are going to lose money, as cost of business, but you have to do it in a way to continue it as long as possible.
The following example is eloquent.
We will consider an initial trading capital of 10,000 USD. As each trade has an intrinsic risk, we will use two levels here, the first at 50% and the second at 1% out of the total trading capital of 10,000 USD. This means that in the first case the operator risks to lose 5,000 USD, while in the second case, his or her risk is limited to 100 USD.
Simply put, you will never lose more than a certain percentage of your trading capital in just one trade. Be aware that even if you trade heavily margined, the percentage must refer to your trading capital and not to the position. If you open a 100,000 USD (10x) with a 10,000 USD capital, then the percentage must be applied to your 10,000 USD.
By using obvious extremes, it is quite easy to comprehend the advantages of a percentage risk management. If you lose half of the capital in just one trade and you keep this way of trading, just one more mistake will put you out of business.
On the other hand, a 1% loss is by no means dangerous for your trading capital. In addition, this gives you time to err, time to learn from your mistakes while you progress on your way of becoming proficient in this business.
The percentage varies from trader to trader, according to their ?risk tolerance?. Some trade with 2%, others prefer a more aggressive 5%, but the overwhelming majority NEVER risks more than 10% in just one trade.
Along with a trading plan with specific entry and exit levels, both for profit as well as loss and maximum time in a trade, this percentage rule is a powerful tool for protecting your trading capital.
Bogdan VASILE
Professional FOREX trader and owner of FOREX education website Forex-Arena.com
www.forex-arena.com
headoffice@forex-arena.com
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Mr. VASILE is the founder and President of VORTEX Capital Management, a seasoned FOREX trader, member of the Securities & Investment Institute in London and author of the revolutionary SyncronDec? training program used in his professional FOREX course. He is also the owner of http://www.forex-arena.com, a professional website, dedicated to FOREX analysis and education.
February 4, 2008
1- Paying For College
Many Boomer’s have High School Juniors in the house and if you are one of them this article can give you some suggestions on how to fund your child’s college education.
If you have Kids already in college some of the scholarship info may be helpful.
If you don’t have anyone in college you can skip this article without missing a thing.
As I’ve said before to many clients(and heard from plenty of parents who disagreed) if you have less than 20 years till your retirement age and have less than $200,000 saved in your pension fund you have no business funding your child’s college education in total. Period!
Do you really want to spend your retirement working to pay off your Child’s college bills while failing to take care of what’s coming at you?
Remember, your child will have over 40 years to pay off those bills and save for their own retirement.
You, on the other hand, will have less than 20 years to pay college bills and save for your own retirement. You simply can’t do both.
That said, let’s get started on how your child can pay for her own college and keep her loans low.
The main thing you need to realize is that tuition for colleges range from unbelievable to very affordable.
George Washington University is one of the highest private colleges in the U.S. with annual tuition of $32,000 per year (housing not included).
One of the most reasonable colleges is San Diego University with annual tuition of only $2936 per year. This applies for resident students but residency is very easy to establish.
My point is that you need to check into colleges and tuition before deciding where to send your child.
Private colleges are good but very expensive. The total cost can be as much as some houses are selling today.
Your student can get the same education at a highly rated public college for a fraction of the cost.
And your student can make just as many important contacts affecting their futures at a public college as at Harvard (though Harvard grads will argue that point).
Helping your student make the best decision can be a tough assignment.
A former college roommates is now Dean of Students at a very well known college and I spent time pumping him for info on what colleges look for in giving out scholarships.
Here’s what he said - it makes for very interesting reading.
First, grades and scholastic scores are important but they are only one of many things most colleges look at. They also look at what a student does outside of school.
Your child gets huge marks if they spend some time volunteering in your community. They also get major points if they have a parttime job.
This shows the college your child’s dedication to something larger than themselves and the drive to pay for part of their own education.
If your child is active in her school it shows a desire to share her time and talents with her classmates.
Generally, these activities are other than sports related. Sports scholarships are something different.
If your child participates in any or all of the above and still maintains a high GPA, it shows any college that she has the talent and ability needed to succeed in school.
Second, decide on a college she will be attending early in her junior year of high school. You want to do this for several reasons.
1- You want to visit the college with your daughter to make sure it has the curricula she needs.
2- It will give her an opportunity to visit with an advisor (pre-appointment strongly suggested).
3- You will be able to spend time with the Financial Aids Department (very important).
According to my former roommate, students who visit a college before they can actually apply can make a huge impression for forward planning and organization.
Staying in touch with the people she meets means that she will be remembered when she finally does apply (especially in the Financial Aids office).
In your community, your child needs to research all the sources that give scholarships to graduating seniors and then start applying early in her senior year.
Fraternal organizations like the Lions, Rotary, Elks and Eagles all give annual scholarships ranging from $100 to $1000/year for 4 years.
Some organizations like your local Chamber of Commerce or FFA give scholarships to qualifying students.
And don’t forget the church you attend regularily. If your child has been an active member she could qualify for any scholarships they may give.
Finally, if your child intends to go to a private college, contact their Alumni Association to find out what kind of aid is available to qualifying students who are going to have trouble paying for college.
Don’t forget the Federally Guaranteed Student Loans either. These are great loans that will tailor a repayment schedule to your child once they graduate.
One final tip that is used by very savvy students. After your child gets to college have your child visit her Financial Aids Counselor before the end of the 1st semester.
Reason? Many scholarships go unclaimed because students figure they may not qualify for them so they don’t apply.
If there are unclaimed scholarships the counselor can point them out to your student and tell her how she can qualify.
Remember, the worst thing they can say is no - but if your student doesn’t even try these things, they can never say yes, either!
Just make sure she starts applying early in her Senior year and for as many scholarships as she can.
The final prize always goes to the most creative, the earliest and the most persistant.
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Copyright 2006 by Steve Wieland
www.healthylife-longlife.com
January 29, 2008
There are number of theories to any one of these questions, but let us deal with reality and facts. The distribution of wealth comes from the primary belief that wealth, money, is something that can be attained, sustained, and retained. This belief is passed from one generation to the next and continues, which would explain how the wealthy stay wealthy. In contrast, the lack of this belief system is demonstrated among the groups that are maxed out in credit card debt, living paycheck to paycheck, or living at poverty levels. The wealthy ensure their legacy of wealth will be continued for generations to come by educating their family on the importance of having money and respecting their wealth with prudence. They also believe in higher education and prepare for this expense early.
There is an ever growing disparity among the ?haves? and the ?have-nots? in our society; albeit, some groups have shown significant growth in wealth the past twenty years. Not only is education about money and all its intricate components important, but also establishing a consciousness about being wealthy and creating a wealth legacy.
Creating a wealth consciousness can begin to cure the generational disease of being in a state of poverty. Poor is a disease of the mind and it demonstrates itself through behavioral acts such as over-spending, devaluing education, and settling for mediocrity.
The value of money is created by the perception you personally place on it. Money survives on the energy put into it? you either love it or hate it ? your behavior and attitude about money is the tell all. Your focus should be to attain lifelong, generational wealth. Building wealth on the principles of simplicity and benevolence is what secures you, your family, and the welfare of humankind.
Money doesn?t grow on trees, but it does grow. And like the constant gardener, tilling and fertilizing the soil of their most precious blooms, money must be feed with the energy of love and care. It is you, the force behind the desire that creates the wealth. Wealth consciousness is simply the belief that you deserve all that money can provide for you and your family.
We all deserve prosperity, abundance, and wealth. These are three distinct definitions which can only be defined by you. You are the energy behind money. You have the power to decide to have a relationship with it or not. Cultivate a strong relationship and it will provide you with everything you desire for you and your family for generations to come.
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Kim Harris is the recipient of the 2005 SBA Women in Business Champion of the Year. She consults and educates businesses and individuals on creating cash-flow and wealth building strategies. You can visit 7Figure Dream to learn more.
January 27, 2008
Getting a guaranteed approval payday loan is not so difficult using online facility in the Internet these days. Almost everyone needs to have a guaranteed source for a loan when faced with a sudden unexpected expense. If you do not have a good credit history, you need to look for a no credit check payda loan where the lender does not consider credit rating as part of their requirements. Every neighborhood has a lender who deals in such payday loans, which are a fast solution to set you free from a sticky cash situation.
With this type of loan, you can get approval for a loan with no credit check or verification as their credit score is not a matter of concern to the lender. Guaranteed approval payday loan provides financial help when things go wrong and you need instant cash to recover from such situations.
Applying for a Payday Loan
Most approval cash advance lenders guarantee that your loan would be approved. You can visit the lender website and apply online. You complete an application form with your address, telephone number, your employer’s address and contact numbers, and bank account information, among other details.
Depending on the lender, you may need to submit copies of certain documents, such as your driving license, your paycheck stubs, your utility bills, etc. Basically, you have to submit your online application, with all the details similar to the details in the conventional loan application. You receive your approval and the loan is deposited into your account either the same day, or by the next working day.
Payday Loan Repayment
In terms of repayment, you will have to make a repayment for the loan within the period that you specify in the loan application. Most lenders are happy to give you 14-21 days for repayment. If you are unable to make a repayment in the due date you can submit an application for loan extension. The fee for the extension is calculated in the daily basis - something you might have to consider against your financial situation.
In general, payday loans are a great way to overcome unexpected cash emergency when something go wrong. Instead of hassling a relative to borrow money or queuing in the bank to get a loan, you might better off applying for a short-term loan if what you need is only between $100 and $500. You save time and hassle while at the same time resolving your financial issue easily.
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