Jason and Sharon discuss the ballooning student loan situation in the U.S. and whether a college education is still as valuable as it once was. Sharon feels that it has to do with a standard, an expectation in our society, and students today can look at alternative ways of attending college to avoid the need for large student loans, such as scholarships or employers who assist with college expenses. The Thrive Time for Teens game deals with this issue, as well as educating youth about investing, real estate, and how to obtain good credit to open doors of opportunity.
A life-long education advocate, Sharon Lechter is the founder of Pay Your Family First, a financial education organization, and YOUTHpreneur, an innovative new way to spark the entrepreneurial spirit in our children. In 2009 Sharon was appointed to the National CPA Financial Literacy Commission as a national spokesperson on the topic of financial literacy. In 2008 Sharon was appointed to the first President’s Advisory Council on Financial Literacy. The Council served both President Bush and President Obama advising them on the need for financial literacy education.

Sharon is an entrepreneur, author, philanthropist, educator, international speaker, licensed CPA and mother. She has been a pioneer in developing new technologies, programs and products to bring education into children’s lives in ways that are innovative, challenging and fun, and remains committed to education – particularly financial literacy. In 1989 she joined forces with the inventor of the first electronic ‘talking book’ and helped him expand the electronic book industry to a multi-million dollar international market. Since 1992, she has dedicated her professional life and directed her entrepreneurial efforts in the creation and distribution of financial education books, games and other experiential learning products. In cooperation with the Women’s Presidents Organization, Sharon has held events across the country to teach young girls financial lessons through interactive games. In 2009 this event launched her new financial literacy board game THRIVE TIME for Teens, an innovative experiential and fun life and money reality game which has gained recognition with coveted awards including the GOLD Mom’s Choice Award, Creative Child Magazine’s 2010 Game of The Year, Dr. Toy’s Best Vacation Product and a five-star rating from WTS Toy Reviews. Recognized as an expert on the topics of financial education for children and entrepreneurship, Sharon has been featured in top national media outlets including CNN, Forbes.com, MSN Money and The Chicago Tribune. Sharon has authored Think and Grow Rich – Three Feet from Gold in cooperation with the Napoleon Hill Foundation and Greg Reid which was released in October 2009 and has ranked as a BusinessWeek and Wall Street Journal best-seller. Sharon’s most recent book project is Outwitting the Devil by Napoleon Hill-a manuscript hidden for over 70 years updated by Lechter for the modern reader. Future projects with the Foundation include Think and Grow Rich titles for Women and Children.

Katie Kieffer is a national columnist and political commentator. Her multimedia website is KatieKieffer.com.  She writes a column for TownHall.com every Monday. Katie has a background in journalism, multimedia entrepreneurship, public speaking and commercial real estate. Due to her diverse experiences, Katie is a popular public speaker for college campuses and professional conferences across the country. Katie is a frequent guest on local and national radio shows to discuss her viewpoints on young professionals. Katie graduated Summa Cum Laude from the University of St. Thomas. As a college freshman, she wrote an opinion column for the St. Paul Pioneer Press. During her sophomore year of college, Katie founded, edited and published a nationally recognized student journal of thought and opinion called the St. Thomas Standard. Katie also developed a comprehensive website for the newspaper so that all of the articles were available online. Katie has over six years of experience in commercial real estate. Before launching into multimedia, Katie worked for NorthMarq Real Estate Services. She chaired a National NAIOP Young Professionals Forum of rising stars in commercial real estate and traveled across the country learning about different geographic business climates and development trends. Katie also chaired the NAIOP Minnesota Developing Leaders and was recognized as NAIOP’s Volunteer of the Year in 2007.

Katie is a LEED Accredited Professional through the U.S. Green Building Council (USGBC). Katie balances conservation and profitability considerations when discussing sustainability. Katie has traveled abroad and she currently researches the needs and challenges that young professionals face across the globe. Katie conducts interviews of both experienced and young professionals and showcases these on her website to inspire other young people to think innovatively, whether they work within a large corporation or are interested in starting their own ventures.

To Kyle, a ‘red paperclip’ is more of a symbolic thing, an idea that you’re ready to launch. A new project about to happen. That spark of insight or inspiration. The most important thing about an idea is to do something with it. Today, Kyle lives in Montreal with his wife and does speaking engagement, photography, art projects, and “Who are These Guys?” to name a few of the projects he has embarked on.

Approach 1
Use put options as a trading strategy to generate profits.

Approach 2
Implement put option positions as a hedge against drastic market moves against your stock holdings.

Put Options Basics
Options that are traded on exchanges are a different beast than those issued as part of an employee compensation program. Normally the latter are good for years, plus you don’t have to pay anything to get them. The type of put option strategy we’re talking about is much shorter term in nature – they will likely expire in a few months – and you have to pay something to get them, just as if you were buying stock. A single put option contract allows you the right to buy 100 shares of the underlying stock at a certain price within a certain time frame. Terms like strike price, premium, expiration date, in the money, at the money, and out of the money are good to know.

Premium — The price of the option; the price the buyer pays and the seller receives. The premium can be broken down into two parts: The intrinsic value and the time value.

Strike Price — The price at which the put owner has the right to sell the underlying stock.

Expiration — The last date the option is a valid contract. Technically, options expire on the Saturday
following the third Friday of the month. But the last day to trade them is the third Friday of the expiration month. Many index options will expire one day earlier on Thursday. You can describe an option in one of three ways, depending on the relationship between its strike price and the value of the underlying stock …

In the money: When the strike price of a put option is higher than the price of the underlying instrument, the option is in the money.

At the money: When the strike price is essentially equal to the price of the underlying instrument, the put option is at the money. When expiration day arrives, options that are in the money have value and you can sell them at a price that’s very close to that in-the-money value. Before expiration, you also can capture any remaining time value in the options.

Out of the money: When the strike price of a put option is lower than the price of the underlying, then
the option is out of the money. When expiration day arrives, options that are out of the money expire
without value.

But why do investors like options, when they could just as easily buy the underlying stock? Here are 5 reasons: Let’s ask Mike Larson who explained it quite well in his report, The Great American Apocalypse of 2011 – 2012.

Advantage #1. Leverage. Even a modest move in an underlying stock can result in a significant change in the value of your options.

Advantage #2. Limited risk. With the simple purchase of options (as long as the options are not exercised), you can never lose a penny more than you invest plus commissions. That means you always know how much money you have at risk.

Advantage #3. Low cost. You can find options with excellent potential that cost as little as $50 or $100 per contract, although some options may cost $1,000 or more per contract.

Advantage #4. Listed on exchanges. Thousands of options are listed on regulated exchanges. You don’t need to venture into so-called over-the-counter options to generate substantial profits in the Great American Apocalypse of 2011-2012.

Advantage #5. An excellent vehicle for protective “hedges” against market declines. As we mentioned above, options can be used as a kind of insurance policy or hedge.
As you should know if you’ve been around the block a time or two, few things in this life come only with advantages and no disadvantages. Such is the case with a put option strategy. Here are four potential drawbacks listed by Larson.

Disadvantage #1. Options are wasting assets. That’s because when you buy an option, you are buying time. So if the market remains unchanged, the value of the option will naturally decline as time
goes by.

Disadvantage #2. Limited time. This follows from the first disadvantage. The expected market move has to take place — or at least get underway — before the option expires. Otherwise, the option can expire worthless and you will lose the entire amount you invested in that option. That’s why it’s important to buy an option with enough time for your trade to work out.

Disadvantage #3. Volatility. Investors who buy options and just forget about them often miss out on
opportunities to take large profits. Sometimes the option’s value will spike upward, and then, before
you know it, plunge back downward again.

Disadvantage #4. Occasional low liquidity. There are many options with plenty of liquidity. But there are also some that are not so liquid. In other words, the number that change hands in a given day (the volume) is low and the total amount held by investors (the open interest) is small. These options tend to have wider spreads, or differences between the bid and ask prices. That can result in you getting poor execution on your trades — paying more than you should to buy and getting less than you deserve when it’s time to sell.

Buying or selling a put option outright without owning the underlying stock is a pure speculation play, much the same as if you had simply bought the stock. EXCEPT the very nature of options means that leverage works in your favor, allowing you to control more value with less money. On the other hand, if you implement a put option strategy merely to hedge your stock positions, consider the premium you pay as the cost of insurance, because that’s basically what it is. Hopefully, the market never moves against your stock positions and the options expire worthless.

It makes sense for a new investor to spend a bit of time understanding the option market. There’s a good chance you’ll find yourself unavoidably drawn to it at some point in your investing career. Maybe you’ll give it a fling and move on to another type of investing that fits your personality better, or maybe you’ll fall in love with the whole ‘magnification of profits through leverage’ thing. Either way, DO NOT jump into option trading until you actually understand what is going on. From personal experience we know that you can get your head handed to you on a silver platter.

The Young Wealth Team

(Flickr / Doc Trader)

“We can no longer simply talk at this generation,” said Charles Schwab Foundation president Carrie Schwab-Pomerantz. “Social media isn’t just a place where young adults spend their time, but it’s also a place that allows for a two-way conversation.”

Strong words indeed for a company that has always chosen to talk AT its audience rather than engage in actual conversation. Schwab’s Twitter assault, which is not likely to set the world on fire all at once, is part of a larger effort by the company to access young investors on the own turf and try to educate them about money, investing, and finances.

At Young Wealth, we have to say we think any education at all aimed at young people and understanding finances is a step in the right direction, especially in light of the woeful job that most public school systems do in this area. Understanding how money works is the first step towards learning how to generate more of it through savvy investing. We’d love to see each and every one of our readers reach the land of financial independence and if it takes Charles Schwab strutting their stuff in the happenin’ world of social media – you go, Chuck.

Remember, though, that Schwab is a stock market company. We would like to suggest that you not get so caught up in the Schwabification of America that you forget that the proven best investment in history is real estate. Not just any old chunk of real estate but the kind that makes you a landlord, collecting passive income every month. We call it income property investing. It’s powerful stuff. The kind of stuff that could lead you to the land of financial independence if you let it.

The Young Wealth Team

(Flickr /  _DaniloRamos)

A Chicago native, at the age of 18, Walsh has amassed great wealth as well as created a personal brand that surpasses most seasoned marketing experts.  As CEO of iSocial Academy, Walsh has created what he calls “iHit17” which is a “17-minute Social Media Hit List”, that allows you to build and easily maintain your personal brand and Social Media network. Austin started his career by developing local bands MySpace pages in the Chicago area, bringing in 200 to 1200 attendants—all without spending a dime and using social media outlets like Facebook, Twitter and YouTube.  After many successful events, Austin’s father’s colleagues took notice and asked him to do the same for them—create a Facebook page that not only increases their followers but also brings in revenue.  The great thing about his concept is that your followers are people who actually want to receive information from you—unlike a mailing list.

Sean is a wunderkind – with the strength and determination to succeed at whatever he does. A young entrepreneur, he was raised in rural poverty and has lifted himself to wealth in the millions through his service, import, and real estate portfolios. The intensity, commitment, and preparation that Sean demonstrates provide practical starting points for anyone who wishes to become wealthy. Though still in his late 30’s, Sean has become successful in business many times over, with accomplishments such as SBA’s Young Entrepreneur of the Year, and the San Francisco Bay Area’s Most Successful Under-40 Recognition. He has sufficient self-awareness and analytical abilities to clearly describe the principles and practices that have contributed to his success, so that others can follow where he has led.

Todd Babbitt grew up in the Washington, D.C. area, in an average middle-class family. He attained the majority of his wealth through real estate, and a smaller portion from the stock market. Nothing he did was complicated or beyond the understanding of an average person. Today, Todd lives the good life in Naples, Florida, with his wife and daughter. He continues to build his net worth through various investments.

Such was the case with Frank Corbin at http://jasonhartmanfoundation.org/articles/young-wealth-show/. When Frank was very young, he had a “hunger”, as he put it, to become wealthy. After moving from Ghana to New York City, he watched his mother constantly struggle to pay the bills. Frank was determined not to get into this same situation. Frank was determined to become wealthy and eliminate money as an issue in his life. As a teenager, Frank worked many different jobs. After graduating from high school, he attended DeVry Institue in Toronto – which loaded him up with student loans and other debts.

In addition to his studies at DeVry, Frank also purchased every real estate course and real estate investment book he could get his hands on. As a result, Frank became convinced that purchasing and holding real estate was the easiest and quickest way to become wealthy.

At the age of 21, Frank purchased his first property – a $241,000 home in Toronto which he picked up for no money down, received $20,000 at closing and the property ended up providing him with $900 per month of positive cash flow. One year later, Frank had attained 4 more properties and was financially free.

After 15 years of buying properties, Frank became bored. He needed a new challenge. Frank saw people struggling financially. He couldn’t understand why people weren’t doing what he was able to do so easily. So he went about creating a course, the Remic Wealth Institute, which teaches his methods for finding and investing in real estate. While putting together the courses within Remic Wealth Institute, Frank identified another need people had that he new he could satisfy – obtaining credit despite having a poor credit history. “The 8 Strategies to Highly Effective Credit” was thus born.

And the smart young investors are using the power of the Internet to multiply their effort. Take Chris Stallman, 21 years old and owner/publisher of the website www.TeenAnalyst.com, which he runs from his University of Michigan dorm room. Or Sarah Harper, who wants to be a CPA when she graduates from Hampton University and runs an investment club she started on campus that now has a 100 members. Harper offers her insight on the topic. “Kids want to know: How can I become a millionaire with just an average salary?”

An interesting tidbit about young investors is that they are graduating from college with more bills and debt than ever before BUT more are also investing earlier than their parents did. Student Monitor, a marketing firm that specializes in young people, found that 23% own savings bonds, 13% individual stocks, 11% bonds, and 7% mutual funds. Hmm, where in all these numbers is the number one return on investment in America, income property? Sigh, guess we still have some work to do when it comes to financial education.

The future may not be so bright we have to wear shades just yet, but it does appear, for the time being, that the younger generation is finally beginning to pick up on the importance of investing. Save early and often and you can set yourself up for an incredible life style later.

Onward and upward!

The Young Wealth Team

Flickr / Schroder+Schombs PR_Brand | Media | Lifestyle

Why does a line like that appeal to young investors? Easy. Because it feeds a very natural human trait called greed; the desire to make something from nothing and do it quick, then head to the beach for the rest of their life. Adults in the 18-25 age group are often especially susceptible to these come-on lines from fraudsters at the very point in their financial development when they should be holding onto what they’ve got with both hands.

Read the following example from YoungMoney.com:

A defendant in Florida, headed an investment fraud business which took in money from more than 1,500 victims throughout the United States and Canada. In 2006, the defendant pled guilty to failing to file a federal income tax return and various mail and wire fraud charges.

The perpetrator and another individual formed Pacific Achievements International (PAI) and used PAI to solicit investment funds, primarily through the internet. Based upon various false promises, investors transferred more than $13 million into PAI bank accounts in Oregon, Washington and Florida.

Individuals were led to believe that for every $5,859 invested, they would see a return of $9,720 within three weeks; and they could earn more than $1 million per month thereafter. As with most investment fraud cases such as this, the perpetrators used a ponzi scheme. They took money from late investors to pay early investors so that it appeared that PAI was successful.

The defendant and another PAI promoter diverted more than $2 million from investors to fund their lavish lifestyle. For his crimes, the defendant was sentenced to six years in prison and ordered to pay over $8.7 million in restitution to the victims.

And this kind of stuff happens every day. Don’t be one of the young investors who falls for this kind of scheme. Stay alert, stay real, and stay in control of your money.

The Young Wealth Team

Flickr / anonymous9000

To succeed, you’ve got to stay alive, financially speaking of course. Before you sink your first dollar into an investment, consider the following three factors that have derailed many a young investor career. Watch out for these sharks and maybe you’ll stay alive long enough to actually make some money.

1.Transaction costs – it’s easy to overlook these when perusing a mutual fund prospectus or calling your broker and telling him to “Sell, sell, sell!” or “Buy, buy, buy!” Pay attention to the transaction costs. If it’s too much, go somewhere else. If all your profit is being eaten up by the broker’s cut, find another broker.

2.Your broker is a crook – sad but true. The stories are out there…Enron…Bernie Madoff. Stay alert for crooks in the financial business because they will always be there. Don’t be the next poor sap to see his nest egg disappear in a poof of chicanery.

3.Your broker is incompetent – crooked dealing isn’t the only way to lose money. Your broker could be straight as an arrow but simply not cut out for the job. Maybe he’s in the wrong field. Maybe he doesn’t have the IQ for the gig. The lesson is don’t trust your future to an obvious incompetent.

While we can’t give you an entire financial education in one blog, keep your eyes open for these three pitfalls and your chances for success just increased astronomically.

The Young Wealth Team

Flickr / rednuht