Selling a piece of your future
And more of the week's best financial advice
Here are three of the week's top pieces of financial advice, gathered from around the web:
Selling a piece of your future
Some college students are electing to hand over a cut of their future earnings rather than take out a student loan, said Claire Boston at Bloomberg Businessweek. "A new kind of financial instrument called an income-sharing agreement, or ISA," allows students to fund part of the cost of tuition. The loan is repaid with a set percentage of their salary after graduation; the terms vary by major. At Purdue University, an English major who borrowed $10,000 would pay 4.5 percent of income for an English degree for a little under 10 years. A grad with a degree in computer science would pay 2.57 percent for about seven years. "The last big ISA experiment — at Yale University in the 1970s — ended up as a cautionary tale" after many students defaulted and others were left on the hook for far more than they expected. But students will have "more protection under newer plans," which are managed by investment firms, not schools.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
What makes a 'super saver'
Housing costs are the biggest difference maker for those who save a lot of money versus those who don't, said Catey Hill at MarketWatch. According to new research from TD Ameritrade, "super savers spent just 14 percent of their incomes on housing, while regular folks dropped 23 percent." It's true that some people pay more for housing to get into a better school district or a safer area. "But there's plenty of room to downsize": New homes "on average have 1,000 more square feet than they did in the 1970s." And you probably don't need that extra space. One family in Colorado downsized from a three-story condo to an 845-square-foot apartment, saving $7,300 a year.
Investors avoid a Millennial fund
An investment fund that focuses specifically on companies that target Millennials has struggled to generate interest despite very strong returns, said Simon Constable at The Wall Street Journal. The Global X Millennials Thematic ETF has gained 60 percent since its launch in 2016. The theory is that Millennials' purchasing power will increase over the next few decades, providing a lift for the "companies that cater to them." But assets under management totaled just $35.2 million — "on Wall Street, that's considered paltry" — and one analyst believes the use of the term "Millennial" has limited its appeal. "If we'd called it a 'new consumer fund,' the reaction would have been different," the analyst said.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
-
Today's political cartoons - December 8, 2024
Cartoons Sunday's cartoons - pardon me, consumer gloom, and more
By The Week US Published
-
5 inexcusably funny cartoons about Hunter Biden's pardon
Cartoons Artists take on nomination qualification, absolute turkey, and more
By The Week US Published
-
What Donald Trump owes the Christian Right
The Explainer Conservative Christians played an important role in Trump’s re-election, and he has promised them great political influence
By The Week UK Published