The Green

David J. Albahary, CFP ®, CCPS – College Planning Connections, LLC

RE: Acceptance Letters

Well, it is that time of the year again when families anxiously await college acceptance letters.  And, so often, assuming your child gets good news from a college or university that he or she is applying to in the form of a financial aid award letter, there is a lot of confusion as to what is a “free” ride as opposed to what is actually not so “free”.  Some colleges make it look like everything is paid for when in reality a lot of it is fluff filled with unsubsidized student and PLUS loans.  With interest rates ranging from 6.8% to 7.9% on these loans this is hardly a “free” ride.  In fact, some might call it plain, old, capitalistic thievery.  Be smart about what are the best options for your family by exploring all of your families’ possibilities when it comes to replying back to these acceptance letters.  A truly good financial aid award letter should include the following:  Cost of Attendance, Scholarships and Grants, Loans and Loan types, Net Amount to Pay, and EFC (Federal and Institutional).  If you are still confused about what it is actually going to cost you, both now and later, consult a professional in your area for help.


March 27, 2013 Posted by | The Green News | Leave a comment

Good News for 529’s in 2013

Tax-advantaged college investment accounts, or more commonly known as 529 plans, will reap some more benefits in 2013 as there are three significant changes parents should be aware of in the new year.  To begin with you can now gift up to $14,000 annually before the there is any gift tax.  What makes a 529 plan so unique is that you are able to gift up to a five-year time span all in one lump sum.  As a result each parent can gift to his or her child up to $70,000 or both parents can gift a total of $140,000.  In addition to larger gifting amounts, only $13,000 per year per parent in 2012, the new laws have expanded what is considered a “qualified” expense.  Now families can include laptops, iPads, internet service, and software to the list of “qualified” expenses.  And finally, mutual fund management fees for  529 plans have been declining in light of tougher state regulations and more competitive bidding among plan management companies.

David J. Albahary, CFP®, CCPS founded College Planning Connections, LLC in 2012 to help make college more affordable for families. 

David is a Registered Investment Advisor with over a decade of experience in the financial service industry. He is a Certified Financial Planner™ and a Certified College Planning Specialist. In addition to being a member of the Financial Planning Association (FPA) and the National Institute of Certified College Planners (NICCP), he is a member of the National College Advocacy Group (NCAG) which is a non-profit organization responding to challenges facing college bound students and their families.

For more info on College Planning Connections:

March 11, 2013 Posted by | The Green News | Leave a comment

The Sequestrat​ion of College

Just when you thought things couldn’t get any worse for college students, as well as the schools themselves, most families will have to deal with the effects of newly imposed “sequestration” beginning this week.  According to officials the across-the-board budget cuts will impact colleges and universities mainly in two ways: financial aid and research.  The White House warned of the dire consequences sequestration will have on higher education earlier this week.  There will be reductions to some federal work-study programs and cuts to millions of student loan borrowers.   Research assistants and research faculty and their staff, who rely on the federal government for funding, in part or wholly through grants, will also feel the pinch.  The devil, however, is in the details, but there is one thing you can count on; the rising cost of college will continue to get worse as it continues to place more of a burden on middle and lower class family incomes.

David J. Albahary, CFP®, CCPS founded College Planning Connections, LLC in 2012 to help make college more affordable for families.

David is a Registered Investment Advisor with over a decade of experience in the financial service industry. He is a Certified Financial Planner™ and a Certified College Planning Specialist. In addition to being a member of the Financial Planning Association (FPA) and the National Institute of Certified College Planners (NICCP), he is a member of the National College Advocacy Group (NCAG) which is a non-profit organization responding to challenges facing college bound students and their families.

For more info on College Planning Connections:


March 2, 2013 Posted by | The Green News | 1 Comment

Rhinebeck Blogger David Albahary & the Green about “game the system” multiple deposits to more than one college.

Are you trying to “game the system” by placing multiple deposits after being accepted to more than one college?  This is called “double dipping” and it is highly unethical.  So, why would do some families do this?  We all know the pressures of the application process can be very daunting and stressful to say the least.  It can cause some families, in order to beat the system, to act inappropriately and operate unethically when it comes to college admissions.  In most cases the normal deadline to reply to an offer of acceptance is May 1st.  At that time you’ll need to decide which school you will be attending in the fall with a down payment to secure your spot.  By putting down more than one down payment you have essentially delayed your decision until the fall. 

This practice is deceitful and unfair to both the colleges and other applicants.  And, if it continues, some colleges will be forced to increase their waiting lists or deposit amounts  in order to more accurately predict incoming class size.  The only time this practice is appropriate is when your child is wait-listed at his or first choice and accepted at another one.  Remember, some colleges reserve the right to rescind an offer of admission if they discover that your child has double dipped.  

David J. Albahary, CFP®, CCPS founded College Planning Connections, LLC in 2012 to help make college more affordable for families. 

David is a Registered Investment Advisor with over a decade of experience in the financial service industry. He is a Certified Financial Planner™ and a Certified College Planning Specialist. In addition to being a member of the Financial Planning Association (FPA) and the National Institute of Certified College Planners (NICCP), he is a member of the National College Advocacy Group (NCAG) which is a non-profit organization responding to challenges facing college bound students and their families.

For more info on College Planning Connections:

January 30, 2013 Posted by | The Green News | 1 Comment

The debt ceiling debate lingers on. (See my blog post on January 9th 2011.)

 The political train wreck is less than one month away and counting….For the first time in its history the U.S. might have to default on its debt.  Or does it?

There has been some discussion recently about the possibility of the President having the Constitutional right to by-pass Congress and fix the crises.  Some people believe President Obama could declare the debt ceiling unconstitutional by invoking section four of the 14th Amendment:

          “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”

If the Aug. 2 deadline passes without an agreement, then President Obama could conclude—statutory debt ceiling or not — that he is constitutionally required to order the Treasury to continue paying its bills.

Whether or not this is a correct interpretation of the U.S. Constitution is a matter for the Supreme Court to decide.  We can only hope we never get to that point and a bi-partisan agreement can be reached for the country’s sake and well as its markets.

July 7, 2011 Posted by | The Green News | Leave a comment

The Greek Debt Crises….

The markets are assuming a happy ending to the Greek debt crises.  The Dow Jones Industrial average is up nearly 150 points today or an increase of 1.25%.

Greece needed a loan from the EU to pay off its sovereign debt maturing sometime in August.  The Greek Parliament passed legislation to approve a $142 billion bailout from the European Union.  Greece will need 6.6 billion to roughly cover its August deadline.

Greece’s debts are quite massive.  For the past few years the nation has been involved in one of the most complex sovereign debt problems as it is tied to a major multi-national currency with many parties involved and no unified European view.

As Greece meets it debt obligations for the month of August there will be even more pressure on the EU nation to pay its bills in the future.  Unfortunately, the math does not add up when you consider the amount of debt it has to pay back verses how much the country can produce in terms of GDP.  The bailout is only a temporary reprieve.

The rules of Econ 101 state that every debt is either repaid fully or it ends up in default. Greece will never be able to fully repay its debt.  “When” is the only uncertainty now surrounding the next Greek crises.

July 6, 2011 Posted by | The Green News | 1 Comment

The Flood of Oil….

What’s with the flood of oil in the markets these days?  Are the markets now a wash with black gold?  What will happen to oil prices?

On June 23rd the IEA, International Energy Agency, announced that it would release 60 million barrels of oil held in strategic government reserves over the next 30 days.  This equates to approximately two million barrels a day.  The world consumes roughly 90 million barrels per day.

The purpose of the Strategic Petroleum Reserves is to insure that we have enough oil held in storage in the event of an emergency or supply disruption.  The IEA requires its 23 member countries to hold enough oil reserves to last 90 days.  In addition, many of those countries have agreements to share those reserves. 

The news last week caught the oil markets by surprise, pushing the price of crude oil downward almost five percent to $90/barrel.

Initially, this move should help keep a lid on oil prices until the end of the summer.  The extra two million barrels of oil released will help smooth out some of the disruptions especially in Europe caused by the civil war in Libya.  Oil prices near term should remain relatively flat barring any unforeseen political or catastrophic event.  However, in the intermediate or longer-term, this news is extremely bullish for the price of crude oil.

The global oil markets have very little spare capacity to be brought on stream.  Saudi Arabia is the only oil country in OPEC with significant and dependable spare capacity.  There is approximately four million barrels per day of spare capacity that could be brought on line to help control crude prices.  The supply-demand balance is extremely tight when you consider the growth of the emerging markets in this world, especially in China and in India.  The International Energy Agency predicted last Thursday average world oil demand could rise by 1.1 million barrels a day to 95.3 million by 2016.  In other words, despite tepid economic growth estimates in the U.S., which consumes nearly one-quarter of the world’s oil, the IEA is estimating a daily increase of 1.5 million barrels a day each year over the next four years.  The use of less nuclear power by countries like Japan and Germany should also put more pressure on these estimates.

The ramifications of injecting more oil into the system will eventually create more consumption in the economy and increase additional demand on an already tight supply-demand balance.

The release of the Strategic Petroleum Reserves over the next 30 days has more to do with politics than anything else.  It is an attempt in the short-term to control the price of oil in a very fragile domestic economy as the U.S. attempts to dig itself out from the recession.  The price of crude oil, ultimately though, will be dictated by supply and demand metrics.  Look for oil prices as a consequence to rise significantly by the end of 2011.

June 27, 2011 Posted by | The Green News | 1 Comment

A Sign of the times

 College degrees no longer guarantee great jobs. In 2009, for example, 2 out of 3 Harvard graduates did not have a job at graduation. What does it all mean? Simply put, students must do more than “just graduate” to stand out in a global economy with millions of college graduates looking for work

June 16, 2011 Posted by | Uncategorized | Leave a comment

“Sell in May and go away”

The old adage to “sell in May and go away” could tempt investors even more this year to make some irrational decisions in their portfolios. 

With the Dow Jones Industrial Average down more than 3% since the beginning of May it probably makes even more sense to walk away and get back in October.  After all, we know Goldman Sachs advised their institutional clients nearly six weeks ago to sell their investments in commodities.  And, like clockwork, nearly three weeks later, the market for commodities began to implode as margin requirements for silver were raised causing a huge sell-off.  The price of oil dropped over 10% in one week.  You would have thought the sky was falling.   Get Out!  Be smart!  Don’t be like the foolish investors who stuck around for over 8% pummeling last May.  If only it were that easy to time the markets we would all be rich.

A more prudent strategy would be to make investments decisions based on your own individual goals and risk tolerance.  Yes, I realize this concept is not as exciting as preaching the world is coming to an end, but it actually makes for a better investor.  Let’s face it.  If we could all time the market none of us would have been caught up in the crash of 2008. 

Still thinking about selling all of your commodities in your portfolio?

Well, now we understand Goldman Sachs is reversing its bearish call in April.  According to report in “Seeking Alpha” on May 24th, Goldman Sachs suggested buying oil, copper and zinc, reversing last month’s call to sell commodities. ‘The risk/reward once again favors being long commodities,’ Jeffrey Currie, head of commodities research at Goldman Sachs in London, wrote in an e-mail.

Goldman Sachs’ reversal on commodities is good news for all of those investors who didn’t follow the herd.

Whether “selling in May and going away” until October is just some silly superstition or a real factor for investors is debatable.  What is not debatable is to figure out what makes sense for you individually and to invest accordingly.

May 27, 2011 Posted by | The Green News | 1 Comment

The two sentence bill, and I’ll have a Big Mac

What can be accomplished in this world in two sentences?  Most people would agree that very little can be done.  You can’t even place an order at McDonalds without using more than two sentences.  However, the Congressional Republicans have tried to repeal the health-care law in a two-sentence bill on January 26th 2011.  The repeal passed 245-189 — with only three Democrats voting in favor of it. But the Senate, still controlled by Democrats, will not allow it to pass into law.

The two sentence bill, if it ever became law, would do the following:

  1. Add 230 billion to the deficit by 2021 according the Congressional Budget Office.
  2. Reduce the number of Americans with health insurance by an estimated 32 million.
  3. Allow for health insurers to deny coverage for those individuals who have pre-existing conditions.
  4. Deny parents from keeping their children’s coverage up to the age of 26.

By using fewer words than ordering a Big Mac and fries House Republicans are trying to do away with a two-year debate in which both parties invested lots of emotional capital–capital that most Americans, according to the latest poles, do not want spend anymore.  Most Americans want to move forward and end the debate.

The real issue for most Americans is how we can honestly reduce costs while protecting patients’ rights.  These right now include banning health plans from rescinding coverage, eliminating annual coverage limits and lifetime limits, and preventing plans from turning down children with pre-existing conditions.

Moreover, a report released by the US Public Interest Research Group, earlier this month, states that “repeal would strip tax credits from over four million small businesses” and drive up the costs of the individual market by 20% by 2016, leaving 57 million American’s with pre-existing conditions to face coverage denials and price discriminations.  The report estimates that by the end of the decade nearly 4.5 million jobs could be lost due to rising employer health care costs.

No one can really predict what will happen over the next decade in the health care industry.  To repeal the new health-care law after all of the debate that went on in this country isn’t right.  Rather, it seems more advantageous for us to build upon the new law and refine it wherever necessary.  No law is perfect.  So, let’s not dismiss it with a two-sentence bill that requires as little thought as ordering a Happy Meal.

January 27, 2011 Posted by | The Green News | 1 Comment

The Politics of Not Raising the National Debt Limit

Recently, Speaker of the House John Boehner reiterated his party’s intention not to raise the limit on our nation’s national debt.   Boehner called for action to “cut spending and end the job-killing spending binge in Washington.” in effort to distract the American people from what got us in the predicament in the first place, mainly the fleecing of our economy by U.S. banks.  These banks were over-leveraged and under-regulated by all rational accounts.

So what happens if the Republicans get their way and refuse to raise the debt ceiling?  Senator Lindsey Graham, who is straying from his ilk on this issue, told CNN point-blank, “Let me tell you what’s involved if we don’t lift the debt ceiling: financial collapse and calamity throughout the world. That’s not lost upon me.”

A letter sent by Secretary of the Treasury, Tim Geithner, to the new Congress outlined the urgency to lift the debt ceiling.  Failure to do so would force the Treasury to default on legal obligations and payments to bondholders here and abroad “causing catastrophic damage to the economy,” Mr. Geithner said.  Stopping payment on the debt would threatened many federal benefits from military salaries to Social Security and Medicare.

“Given the gravity of the challenges facing the U.S. and world economies, the world’s confidence in our creditworthiness is even more critical today,” Mr. Geithner said.

Currently, the U.S. is approximately $335 billion from its authorized debt ceiling of $14.29 trillion. The debt ceiling would need to be raised by the end of March and no later than by mid-May to skirt default.  Like the recession of 2008, the worst since the Great Depression of 1929, missing a debt payment is unprecedented in our country’s history.

One of the first actions taken by the new Congress was to approve new rules, thus making it harder to pass a debt-limit increase. No longer will an increase be automatic with passage of a budget resolution; it will have to be voted on separately.

Is not lifting the debt ceiling just a political ploy by the new Congress to make us think that all of this spending has led this country to 9.4% unemployment rate?  When in reality we know what really happened.

Maintaining our economic strength as a country is vital to our prosperity as a people.  It is imperative that we stand behind our debt obligations and signal to the rest of the world the U.S. is still a viable, global economic power.   Let’s not lose sight of what is important.  Let’s cut through all of this political posturing in Washington and do the “right” thing.  Let’s not play around with the”full faith and credit of the U.S. government,” and our country’s future.

January 9, 2011 Posted by | The Green News | 2 Comments

Inside the Obama Proposal

It is estimated that George Steinbrenner’s death this year saved his heirs approximately $500-600 million in estate taxes. The U.S. Government, conversely, has lost an opportunity to fill its coffers due to an unusual clause in the Bush Tax cuts enacted in 2001. In general, the act lowered tax rates and simplified retirement and qualified plan rules. One key provision in the legislation, though, was the extinction of the federal estate tax in 2010.

 Here is a list of some other prominent billionaire’s who died in 2010 free of federal estate taxes courtesy of

Dying Free of the Federal Estate Tax:

Billionaire Deaths in 2010~ Billionaire Fortune Date of Death ~ Estimated Net Worth (from Forbes billionaires, 3/10/10)

Mary Janet Cargill inherited, Cargill Inc. February 5, 2010 $1.7 bil

Dan L. Duncan self made, energy March 28, 2010 $9.0 bil

Walter Shorenstein self made, real estate June 24, 2010 $1.1 bil (with family)

George Steinbrenner self made, Yankees July 13, 2010 $1.1 bil

John Kluge self made, Metromedia September 7, 2010 $6.5 bil

Their deaths should get the attention of our members in Congress and motivate them to act accordingly to close the loophole.

So what does the new compromise negotiated by President Barack Obama and Republicans leaders do to the federal estate tax law? It would bring the estate tax back at a rate of 35 percent, exempting the first $5 million of an individual’s estate and $10 million of a couple’s estate from any taxation.

If you are serious about cutting the federal debt then this new proposal seems to contradict those beliefs. It is just another instance of kicking the “proverbial” can to the next generation to help solve our deficit gap which is currently estimated at 14 trillion dollars.

Here is a brief history of federal estate tax according to The estate tax at a glance:

The modern estate tax was enacted in 1916, imposing a 10 percent tax on the portion of estates above $50,000.

The rate peaked at 77 percent from 1941 to 1976. From 1942 to 1976 it was imposed on estates larger than $60,000.

 By 2003, the top rate was 49 percent, on the portion of estates above $1 million.

In 2003, Congress passed law that gradually decreased the estate tax until it was repealed for 2010.

In 2011, current law brings back the estate tax, with a top rate of 55 percent on the portion of estates that exceeds $1 million.

Most analysts give this new proposal a 50/50 chance of passing through Congress. And who really knows what it will look like after the Congress finishes mucking with it. We should have an answer by the end of the year if unemployment benefits are to continue to nearly 2 million people. Let’s just hope a compromise can be reached without sacrificing the wealth of future generations.

December 11, 2010 Posted by | The Green News | 1 Comment

“Water, Water, Water, Everywhere…”

The Green: “Water, Water, Water, Everywhere…”

After paying $4 for a 16 oz. bottle of water at a spring training baseball game, I thought to myself I had been robbed, or at least, fleeced by the powers that be.  How valuable is that stuff?  Is it really worth $4 a bottle?  I have told you in previous newsletters about oil and natural gas, but what about water?

Peak oil analyst, Matt Simmons, recently proclaimed in a research report called “Twin Threats to Resource Scarcity: Oil & Water” that “without water, we cannot create modern energy.”  Water is used to inject in wells to increase the flow of oil.  As an oil well depletes, it needs more water.  For example, the Saudis pump 2 million barrels per day into their Khuras oil field.  Water is also used to lubricate drills and keep them from overheating.  Modern energy production requires vast amounts of water.  In the U.S. power generation accounts for approximately 40% of our fresh water usage.  The irony, here, is oil and water don’t mix yet we still need both to produce vast amounts of energy.

On a micro-level a human being cannot survive for more than three days without fresh water.  Here are some startling facts worldwide:

  • Over the last decade, more children were killed by diarrhea than all the people who died in World War II.
  • Every eight seconds, another child dies from drinking dirty water.

Most Americans do not believe a water shortage could seriously affect them.  Maybe that is why they feel “fleeced” after paying $4 for a bottle of water at a ballgame.  We obviously take the supply of fresh water for granted as a country, but did you know that the average U.S. citizen uses 160 gallons of water per day.  Here are some other items you might not be aware of:

  • It takes 14 gallons of water to grow a pound of grain, 435 gallons to grow a pound of beef, 2,000 gallons of water to make one gallon of milk, nearly 20,000 gallons of water is needed to make one ton of steel.
  • A study by the Environmental Protection Agency estimates that $335 billion will be needed simply to maintain the nation’s tap water systems in coming decades.
  • The country’s municipal wastewater systems will need another $36 billion in maintenance.

So it is not hard to imagine that soon we will have to pay more for water in the future.  The scarcity of water will only increase with the scarcity of oil production and other ways in which we produce massive amounts of energy.

Water probably needs to be viewed in the investment arena like other scarce commodities such as oil.  Maybe it will soon be traded on an exchange with traders bidding on the prices daily using sophisticated instruments like futures, options, and derivatives.  And, maybe the $4 that I paid for that bottle was not so bad and I can view it as a rather shrewd investment in the not-so-distant future.  Or, maybe, you know, it has nothing to do with being a scarce commodity at all, but more to do with the high price of Alex Rodriquez’ salary.  Hmmm.

April 7, 2010 Posted by | The Green News | Leave a comment