My Final Post

Going into school, my net worth has dipped -4% to $42,305. Did not meet my goal, but not abysmal. I officially gave up $4,000 in unvested retirement savings and $80,000 in tuition credit to make what I feel confident is the right decision for my future to move out of the Midwest and follow a better career progression. I feel lucky I can be this financially foolish.

But at this point in my life, I have to cling to the adage for business school students everywhere: It’s about the time, not the money.

That is definitely how I feel and I’m ready to plunge headlong into this next two years of TIME. The money will come. I’ve decided that although I will keep up with my monthly budget and net worth check-in’s privately, I will not continue to publish them here on this blog. I’m officially going dormant – potentially for a full two years. I hope to resume after I’m done and reinstated into the real world – either here or at another name.

I have absolutely loved this experience and thanks to all of you who commented – publicly and privately. I have been so enriched by you.

Blogging for the Sake of Learning (and/or Getting a Job?)

Thinking even more about giving up the blog, I realize that I do still LOVE and believe in the idea of devoting significant time to a public forum to house thoughts, reflections, and more than anything a slow climbing path towards being an expert on some discrete finite topic. It is very much in line with Malcolm Gladwell’s ideas in Outliers on effort – similar to the "10,000 hour rule" espoused by a lot of writers at the New Yorker and various publications.

You can only become truly knowledgeable… or, phrased more positively….. you can actually become an EXPERT with just really hard work and time in front of you. Which provokes me to ask myself, what do I really want to perfect within myself? What could I become an expert in, and where could I develop myself through practice and effort and time?

I’ve had so many side interests – while I love writing and want to maintain that with a certain level of ferocity, I find that too private to actually blog about. I started getting really interested in wine and really would love to take advantage of opportunities to learn more. I have a good start on a tracker of my tasting notes… but then, I would post on that more sporadically, and there are SO many wine blogs out there, that mine would be, once again, the least knowledgeable and interesting voice out there!

I COULD use it as a professional opportunity to start practicing for case interviews, since I've determined I may want to break into management consulting after grad school. A case interview a day! That actually has the potential to create a real following, based on the lack of real, free resources or forums out there. Another sort of more general business school blog could be lumped into that as well – which would actually be FUN to maintain.

I think we’ve got some changes afoot....

Loan Research - Check, School Info - Eagerly Awaiting

By now I have done a lot of great research on available and highest-rated loans, and I think I have narrowed to a few lead options: the Discover Private Loans, NorthStar Total Education Higher Loan and the WellsFargo Grad Loan. From all the research I’ve done, it seems like I might be able to get approved for a loan fairly quickly, barring any unforeseen circumstances. But the one unknown is any preferred process or protocol from my school. Problem is, they don’t even release all of their financial aid forms and information until August 1st. So I suppose I am in a wait and see, poised and ready to go phase until then.

On a side note, does anyone have other details/background on the loan institutions I prioritized?

Incomus Minimus Breakdownus Maximus

Sorry I have been absentee these last few weeks, but a LOT has been going on:

+ I officially said “No thanks, you can keep your $100K in tuition money” to my employer, thereby relinquishing myself from the three-year post-MBA time commitment I would’ve had to fulfill, and pretty much banishing myself from the grand virtual halls of personal finance bloggers.
+ My brother graduated from college and immediately re-enrolled in a Master’s program for Accounting. As part of his graduation gift, I sent him a little 10-page handwritten tutorial on personal finance principles and ideas
+ I finished up a class at a local community college and officially completed all of my pre-matriculation studies and requirements in Excel and Calculus. Stanford HAS to let me in now.
+ I recently decided to pursue a certificate in Public Management while I’m at school – with a focus on either Government or Socially Responsible Business. I’m super psyched about the program.
+ Took a budget roadtrip to Wisconsin – two nights, gas for a 15 passenger van, all meals, and a baseball game at Miller Park, all for the grand total of $150 per person. Amazing.

Other than being generally busy-ish, the only thing that’s keeping me from posting and thinking more about my finances? The soon-to-be income-free student reality is beginning to hit me. The mountain of debt I am about to absorb is overwhelming, and while I haven’t questioned the direction I’m heading or the decision I’ve made, the logistical “How am I going to do this?” keeps coming back to me. How will I manage my expenses, when I don’t have any assets or income? How will I organize my loan money so that I have the right amount at the right time, when I need it? I know a budget will be more important than ever – but how will I stick to it when I’m already SO far in the red? And the things I would normally want to write about seem more and more irrelevant – yes, would love to create a new goal to invest in a CD, but can’t even think about that right now. The Future of ETF’s? Who cares when I will barely be able to keep up the Roth.

I think deep down part of my nagging concern is even more esoteric than that… who can ever picture what the next stage of life is going to look like, and feel like? I was just as worried about this whole “real world” thing when I was graduating from college, and now hear I am running my life with complete measured control. I still remember the small rush of paying my own bills, taking care of my own oil changes and meal planning and everything else. And soon I will be embracing a whole new set of stages in one: the blur of two years of grad school and the new reality of student loans as one more line item on the Suzy comma Adult dossier.

Q Day Rant

Q-Day: When are you quitting work before leaving for school?

At work, now that most folks know I’m going back to school this Fall, I find myself facing this question from all of my co-workers, and EVERYONE has suggestions about how I should spend the in-between time. Mostly travel. To Europe, to South America, to Iceland, Australia, maybe a round the world ticket? I now have endless ideas about how to spend my time. I get it, they’re fantasizing vicariously. But most of these folks already have their MBA’s and when I’ve asked them what they did prior to going back to school, it’s always “Oh, me? Nothing!”

That’s right all you hypocrites. You didn’t do anything either. Why? You – like me – had to worry about an unlimited supply of funds, no income for the next two years, and a mountain of debt coming your way. You also had logistical details to concern yourself with, like finding an apartment in a new city from hundreds of miles away, buying a bike, packing up all of your stuff and moving. And maybe you – like me – also had to take significant others into the equation.

So yes, while I would love to quit work right this second, I am not going to make that choice. And yes, I realize I will never have this particular period of time again, but I am going to have time to travel in my life and take extended periods of time off from work. So, yes, I still have three months to go. And that is my RANT of the week!

Studying up on my Student Loan Options

One of my 2009 annual goals – given the fact that I’m going back to school this Fall was to become an expert on student loans and secure a really great package. Based on my financial aid package, I will have to secure between $12,000 and $30,000 in additional private loans in addition to the federal loan package I already received from Stanford. While the approval process will generally be short for private loans (between 48 hours and a week), the becoming-an-expert process will take a lot longer. I will probably wait a little later in the summer to understand if Stanford has preferred lenders set up and if I will want to simply pursue additional funding from the same institution that my GradPlus Loans will be coming from, but in the meantime, I have narrowed down a list of 14 other private options to explore (with the help of finaid.org) – whew. I have a heard the most about CitiAssist and US Bank’s No Fee Loan, but I want to do lots more research to understand which might have the best terms and most competitive rate. And in the meantime I got to refresh myself on what the LIBOR acronym stands for. Good fun for a Monday afternoon!

a LOT ahead of me.

Since it's officially Stanford, I have a long to-do list ahead of me. Item one: loan research for next year!

GOOD NEWS: Stanford gave me $32,979 in grant/fellowship money!

BAD NEWS: The remainder of the year's estimated cost is $53,120, which I will have to cover in loans. Here's the breakdown:

$3,000 in a Federal Perkins Loan (5%)
$8,500 in a Federal Stafford Loan (subsidized through school)
$12,000 in a Federal Unsubsidized Stafford Loan (6.8%)
$29,620 in GradPLUS or Private Loans (7.9-8.5% or dependent on my credit rating)

All for one year of my life! Whew. My to-do list: finding out more about Stanford preferred lenders, if there are any, and if not - immersion in GradPLUS.

How do you set a budget when you *technically* have no income?

So, I know I need to set a new, realistic budget for when I'm in school. A lot of things will be different. The main one = no income.

So how do you set a budget when you don’t have any money coming in? A lot of financial aid and federal loans will cover a good deal of the straight tuition part of my expenses. But then I expect I will also have one big lump of funds from loans I take out. I will still need a budget so I prevent myself from burning through all of my loan money too quickly, but I know it’s going to look and feel a lot differently than my current financial planning. A couple of the different dynamics to note:

One, I won’t be amassing savings – so I will need to stop all automatic deductions for my current accounts and maintain only my cash-value life insurance and my Roth from my loan money.

Two, very limited capital - there is a limited amount of loans I can take out, as restricted by the “Student Budget” that Stanford has calculated. I won’t be able to take out any more money than they have determined it costs. For me, that total is $53,000 for each year, of which, $28,000 has to be devoted to school costs and $25,000 is for everything else. I literally can’t spend beyond $25,000 each year, or I will have to dip into my paltry savings or incur – gasp – credit card debt.

Three, invisible expenses - there are a lot of “mandatory” items that are not included in that student budget – like, flights for all of the job interviews and all of the special study trips that you HAVE to take advantage of – otherwise, why go to school full-time?

Four, extreme temptation- I think it is going to be hard to stay in the mode of reducing expenses or keeping expenses low, because business school is this very finite period of time when you are going to be surrounded by the most amazing set of people and experiences yet. Who wants to think about keeping to the bare necessities as the backdrop for THAT? Any tips?

Risky Renting in Palo Alto

Pretty much the craziest real estate market in California. It’s even more expensive than living in San Francisco if you have certain base standards of living. One of the options that the Guy* and I originally considering was to rent a BIG 5-6 bedroom house and live with several other people. We heard that it’s fairly common for Stanford students to do that, so it was originally enticing. It’s a matter of trade-offs – a little bit of privacy for having all of the amenities we’re used to and a lot more space! But I think the more we think about it, we’re tossing out that idea… it’s just too risky, and I can see it causing too many potential arguments and frustrations. So, back to the more predictable search for a one or two-bedroom apartment in and around Stanford. So far, the neighborhoods we’ve got our eyes on are Downtown Palo Alto, Downtown Menlo Park and College Terrace (which is essentially right next to Stanford). Rents vary pretty widely but it looks like I can get something in the $2200 range… if Andy and I split, that’s $1100, really only $100 more than what I pay now. So I will try to keep my budget to that, knowing that all of the utilities will likely be more in the end.

In my initial Craigs List searches, it seems like for that budget, we’ll either be able to get a really nice (i.e. what we’re used to) 1BR, or slightly less updated 2BR. Scarily enough, most properties are rented within a month of the move-in date, so I can’t start my serious searches for quite some time. Sigh.


*Footnote: Yes, you deduced correctly… the plan is for the Guy to move out to Cali with me. Yes, that’s right, the plan is actually for him to quit his job and find a new one (he hopes in a different industry) in this market. Right, I know, more evidence of my/our craziness. But he won’t quit his job until he finds another one, and if it doesn’t work out right away… we’ll do distance and be patient!

And the Winner (of all my money for the foreseeable future) is...

.... Stanford.

Looks like I’m headed to Palo Alto next year. Who knew a ticket back to the coast would be worth thousands of dollars in loans! (I mean I know it's the right decision for me long term, but you really just have to keep laughing about it…)

So, yes, sorry for the minor blogging hiatus, but have been stressed about making this decision and now that it's finally made I'm looking back over the last week realizing I did some damage on myself. My skin and nails look horrible, haven't worked out and have been eating horribly so my body looks and feels terrible... have gotten minimal sleep. It's time to normalize for a bit... or at least for the weekend. Whew.

Blog Poll: What is Sicker?

I recently netflix’d Sicko and was highly entertained by Michael Moore’s playful rant. It is amazing that what seems normal to us, is pretty off-kilter by the rest of the world’s standards. And no matter how one-sided people say Moore’s films are – you can’t argue with facts like these: the United States health care system ranks 37th, just ahead of Slovenia and Cuba. Then this weekend, I attended a Financial Aid Information Session at Harvard Business School… once the brief slides were scrolled through and the floor was opened for Q&A, the first three questions were not about financial aid or about the loan terms or interest rates or about the hundreds of thousands of dollars in debt those of us in the room would be taking on – the first three questions were about health care. It’s clear what makes us most panicked in this country is not debt, but health care.

So yes, what’s sicker… panic among reasonably well-to-do prospective MBA’s over student health care and the exact day it begins and what it includes… or the fact that I will have to take on a minimum of $98,000 in loans to attend school this fall. ARE YOU SERIOUS??? But that’s the base loan package – i.e. what the poorest of candidates would be expected to take on. Insane.

My EFC Pronouncement is Back...

This is my first time dealing with the whole FAFSA / loan process arrangement, so I’m still puzzling through what my EFC (Estimated Family Contribution) will actually mean in reality. My Estimated Family Contribution – ie. what the government has determined I can afford to give towards my education - turns out to be $22,508. Which I’m assuming means that I should be prepared to seek at least that much in loans. Gulp.

Starting Salary Figures Can be Deceiving

Some new Payscale research just emerged about post-MBA salaries. According to Business Week, who released the findings along with a handy table comparing schools, a lot of MBA programs highlight starting salaries, which are only one part of the picture. Equally, if not more important, is the salary range throughout your lifetime. They try to give you a sense of the ROI of your investment in going back to school. It’s a little deceiving as it only includes base salary (not stocks/options/benefits you could receive), but it’s still interesting to compare. For the two schools I’m deciding between it seems like Harvard is a better bet on every metric… but money’s not the ONLY motivator for me, clearly.

Harvard
Starting Salary (medians): $134,000
5 Years Out: $150,000
10 Years Out: $184,000
15 Years Out: $227,000
20 Years Out: $230,000

Stanford
Starting Salary: $128,000
5 Years Out: $139,000
10 Years Out: $148,000
15 Years Out: $179,000
20 Years Out: $202,000

How to Plan for Pre-School Expenses

So, as I’m getting more and more excited about school and getting buried in the difficult decision about which coast I’m going to head towards, I’m also realizing that there will be a LOT of expenses even before I grab up the loans and go into debt. I guess I could throw up my hands and say “Oh well, it’s all going to be negative pretty soon anyway,” but I am promising myself that I WON’T have that mentality. I have plenty of negative networth role models out there that have maintained responsible personal finance

I’m also dealing with the not exactly unexpected, but still rather unpredictable expenses associated with enrolling - $25 processing fee for financial aid with the CSS profile, $1,000 deposit due in March, $350 flights out for admit weekend, $300 for hotels at two weekends, required pre-reading and courses, and probably tons of other stuff I’m not thinking of!

For now, I’m trying to keep spending down in every other area I can control, knowing that lots more is going to pop up. I also added a budget line item called “Unexpected”. Any other budgeting techniques for unexpected expenses??

Double YES....

In awe.

Also got the 10:22 pm call from Anonymous Caller, aka Dean of Admissions at the Stanford GSB last night....

I'm in.

And thus begins the really tough decision-making period....

YES....

I can't believe it. I got into Harvard Business School.... :)

Mountains of debt, here I come...

The Waiting Game

This is it. First Round Decision Week. This is the week when I find out if I get into business school, and my whole life will change. The next two years of my life could be decided by this Thursday. Kind of insane. I’m going to need lots of distractions this week.

Profile on Peer to Peer Lending in the Credit Crisis

In the special “Education Life” insert in the Sunday Times today there was an article on alternative ways to find money for college “Loans in the Time of Facebook”. It sounds remarkably appealing, but I’m less familiar with “social” or “Peer to Peer Lending” as it’s called, so I checked out a few of the sites advertised.

Virginmoneyus.com: Manages money between family and friends. If I were so lucky, this would be a great way to authenticate a loan through a third-party site.

Fynanz.com: Peer to Peer lending with a 5% bonus for lenders. You can search by school or state as well so you can see where other students are seeking to borrow.

GreenNote.com: This was the most inspiring of the sites in my opinion. Positioned as receiving a loan from someone who believes in you. Low 6.8% Fixed Rate

Prosper.com: The most established of the PTP lending resources I’ve found with the tagline “Let’s Bank on Each Other.” Similar, personal interst small loans.

It seemed that the fundamental problem highlighted in the article about all of these sites were that there are quite obviously too many interested borrowers and not enough lenders. For me, too, I think it’s just the uncertainty in the market, but I guess I would be a little skittish using these less-established resources… of course, we’ll see how the loan process goes for me, and I may be reinvestigating.

Grad School Financial Aid Action Plan... and GO!

After culling all of the best ideas from fellow pf bloggers, I’ve devised an action plan for financial aid. Some good ‘ole generic discipline is in order.

+ Reference Websites of 3 Schools I’m applying to…. CHECK.
+ Investigate two outside scholarships from Columbia…. THIS WEEKEND.
+ Subscribe to all Financial Aid blogs/updates….. NEXT WEEK.
+ Cull list of all potential scholarships / sources of funds…. NEXT 3 WEEKS.
+ Work on & Complete 1 Scholarship Fund etc. per 3-wks…. BEG. DEC. 1
+ Meet with Financial Adviser… MID-DEC.

Later… fill out a FAFSA form, fill out a CSS Profile Application, i.e. doing all the fun government stuff.

Any other big advice or secret hints?

Life Updates - Argentina & Grad School Apps

We had a brain trust session last night - with myself, the Guy and the other couple we're going to Argentina with this Fall. And I think we have the perfect plan... it seems like we're on the same page with expenses too, which is nice. The only problem - most of the hotels we're trying to find are already booked. Guess it's a popular trip for November.... we'll keep trying! Here's the itinerary for lodging and entertainment:

Buenos Aires - renting an apartment, $200/night, split between 4 people
A ferry to Uruguay - $40
Boca Juniors soccer game - $100
Flight to Mendoza $200
Staying at a winery $150/night, split between 2 people
Trek into the Andes on a guided tour $250
Overnight bus to Iguazu Falls $120 (also saves a night at a hotel)
Hotel in Iguazu Falls - FREE, on Starwood points!

So there's some splurges and some skrimping. And that of course doesn't count all of the food and fine wine I'll be tasting throughout the week. Now all I have to do before I go is finish all of my business school essays and applications. ONE MONTH LEFT. Scary stuff!