As a result, it’s really important for college students to protect the small amount of assets they have.  Chances are, if a student get’s their laptop stolen, it will cost at least $1,000 or more.  And college students typically don’t have that kind of cash lying around.  In 2011 (the last year statistics are available), there were close to 10,000 burglaries and robberies on university campuses nationwide.  And that was only what was reported on campus.  That doesn’t include the potential losses from near-campus locales – apartments, coffee shops, parks, etc.

With roughly 14 million 4-year college students nationwide at large reporting institutions, the odds of you getting something stolen sometime during your 4 years at school is 0.3%, or almost a 1-in-300 chance of being burglarized.

As such, I’ve put together my how-to guide for college student renters insurance which hopefully answers any questions you may have.

Why You Need College Student Renters Insurance

The bottom line is that you need college student renters insurance to protect yourself and your stuff.  Renters insurance is actually a misnomer – the actual policy is personal property insurance.  That means it covers your stuff anywhere.

That’s why it’s so great for college students – you get your laptop stolen in the library, and it is still covered by the insurance policy.

When you live in a dorm room, or have a roommate, your stuff is just less secure.  People are always coming and going, and you may not know a lot of them.  Then, you probably have to go the library, the computer lab, the quad, the coffee shop, and more.  So many places that have the potential for someone to take your stuff.

And that’s just theft!  Renters insurance also covers things like a regular policy: fire damage, vandalism, and more.  Many college students think the landlord or university (if you’re living in a dorm) will pay for loss if the building burns down or something happens.  That’s incorrect.  Landlord insurance only covers the structure – renters are responsible for their own contents!

Prices to Expect

The amazing thing about renters insurance is that it is extremely cheap!  I’m talking incredibly cheap.  When I was going to college, I had a $5,000 renters insurance policy, and I was paying $4 per month for the policy.  Plus, I used the same company that did my auto insurance, and I received a “multi-policy discount” of $15 on the car insurance.  The bottom line – it was free.

Why did I choose $5,000 for my policy?  I really only had a computer and TV that I cared about, but my apartment also had a cheap couch, a bed, and my clothes.  I figured in a worst-case scenario, that $5,000 would get me back on my feet.

You can take the $4 per month as a baseline.  You can get a $10,000 policy for about $10/month, and a $20,000 for about $20/mo.  The question is, as a college student, do you really need that much insurance?

What Coverage to Look For with Renters Insurance

This is always the tough one, because every company calls their coverage a little something different.  Plus, each insurance company typically offers add-ons that may or may not be of value to you.

The biggest thing you’re looking for coverage in is property protection.  You want to make sure that you stuff is safe.  A typical policy would cover:

• Fire
• Theft (Ensure the policy covers theft from your unit and theft anywhere you are, like a coffee shop)
• Vandalism
• Smoke Damage
• Lightning Damage
• Windstorm
• Discharge of Water (i.e. Fire Sprinklers go off accidentally)

Other Important Coverages:

• Loss of Use: This helps you pay for another apartment or hotel should you not be able to use your rental for whatever reason
• Liability: This is coverage that insures you if you are sued.  Say your dog bites someone, and they sue for the cost of medical bills.  Your liability coverage will help you pay for this expense.

Typical Terms:

• Deductible: This is what you pay if something happens.  Many policies offer no deductible, but the average deductible is $500.  I would aim for a $0 deductible policy, but get the lower amount you can afford.
• ACV vs. Replacement Cost: This determines wether you will get the actual cash value of the loss, or the replacement cost of the loss.  Think about it this way: if you’re 2 year old laptop is stolen, will you get enough money to buy a new laptop, or will they give you the current eBay price for your laptop.  I always opt for replacement cost, since I will get a new laptop.

Random Coverages (You may not need, but could depending on your situation):

• Hurricane Damage Coverage
• Flood Damage
• Identity Theft Protection

All of these extra random coverages probably have extra charges associated with them.  I wouldn’t opt for them unless you’re very concerned about those issues.  Chances are, though, as a college renter, you don’t need hurricane or flood protection because you could probably take the small amount of personal property you own with you when you evacuate.

What Companies Offer Renters Insurance

All of the major insurance companies offer renters insurance, and there are many small companies that focus on renters insurance.  I’m a firm believer that you should apply for renters insurance at whatever company you currently have an auto policy or other insurance policy with.  Many times, you’ll qualify for a multi-policy discount, and it will allow you to save enough money to easily cover the cost of renters insurance.

If you don’t have a specific company you’re attached to, I’ve found that Allstate has great renters insurance prices.  You can check them out here:

What You Need to Apply for Renters Insurance

You don’t need much to apply for renters insurance.  You typically fill out a form online that includes your name, address (of the unit you’re going to be renting), phone number, and possibly your Social Security number.

They may also ask you questions about whether you have pets (certain breeds of dogs may disqualify you from insurance), whether you have roommates (may increase the cost), and certain characteristics of the unit (fire alarms, smoke detectors, burglary alarms, etc.).

Whatever you do, don’t lie on your insurance application!  If you lie, and have to file a claim, your claim will be denied, and you could even be sued for fraud.

Otherwise, the process is painless and will probably take about 15 minutes to get you a policy.

How to File a Renters Insurance Claim

Should something happen and your stuff gets stolen or there was a fire, you have to file a renters insurance claim.  This simply means you contact your insurance company (typically by phone, but many companies are moving to online claim forms), and tell them what happened.  Your insurance company will then open an investigation and process your claim.

Important: they may ask for proof of your belongings, such as a laptop.  That’s why it’s so important to keep records of your purchases – either by keeping a copy of the receipt, or saving the transaction online.  Also, having photos of your belongings is good practice if you don’t have receipts.

Depending on your insurance company and the nature of the claim, they will typically pay for losses within several days to several weeks.  As such, it’s still a very good idea to have an emergency fund to help you get through the interim.

What are your thoughts on renters insurance?  Do you have a policy or recommend one?

The Guide to College Student Renters Insurance is a post from: The College Investor. Please check out the site at http://thecollegeinvestor.com or follow him on Twitter @CollegeInvestin. Thanks!

We’re borrowing for everything!

How Debt Keeps us Constantly Broke

We are like crows, in a sense. Hey, look at that shiny thing, we think. And we want it. For major purchases, we think about it. Discuss the pros and cons. Ask our spouses, friends or psychics. See if we can afford it.

But we don’t typically save up for it, simply because getting financing is so easy. When was the last time you saved up for anything?

The Last Time I Saved Up for Something

I was a high school junior. I’d been babysitting every summer and ferreting my money away in a “low interest” savings account (air quotes because I think at the time, I was “only” earning something like 4-5% interest!) and I knew I was saving for a trip. Two weeks in Europe with 20 or so of my high school classmates. We raised money via carwashes and I remember being able to pay my way in cash.

That was 15 years ago.

Since then, every single time I’ve wanted something, I’ve gotten it. Alas, still waiting on that pony.

I knew what I could afford, even though I only knew that in the most basic way: my monthly payment.

I didn’t keep cash around. I kept my money where it was safe: in circulation.

But I wasn’t alone. And I’m not alone now.

How to Break Out of the Debt Mentality

We’re used to paying monthly bills. Comfortable, even. So, even though we’re all above average in math, we see 0% financing as a way to leverage our cash. We think, “well, sure, I’ll finance a car at 0% and use the money I’d save in interest to invest in emerging markets,” but we don’t do that. Instead, what ends up happening is that we buy just a little more car than we wanted, with the thought that, hey, what’s another $15 a month?

We must stop this madness!

In all seriousness, let’s stop financing our lives.

Once you’ve paid off your credit cards, get out of the rest of your debt (except perhaps the mortgage) and start paying yourself.

The only trick to getting out of debt mentality is to save for something you want, then buy it with cash.

Did you know that they give cash discounts in a lot of places?

Just Say No

We’ve got to stop financing things. Just say no to in-store credit at the furniture store. Say no to the dentist. Use your credit cards (wisely) in order to earn points and play the game.

Start Saving Half

Here’s my latest trick. Direct deposit now goes into two different accounts at two different financial institutions. My monthly paycheck is split 50/50, and because my new savings account is at a different credit union, I’ve made it more difficult to spend that. I’m one step removed from that process. And it turns out, one step is enough. All my bills come out of my other account, and that one is left nearly bare at the end of the month.

And it’s working. I’m saving money! I was skeptical at first, but it works.

I’ve just moved in to a new place and the urge to buy new things (replacing my perfectly fine couches is high on my list) is strong. But I will not be one of those people who finance my living room.

If Murphy is real (and I believe he is) then since I just finished paying off my car, it’ll behoove me to have a good chunk of cash where I can access it.

I won’t call it an emergency fund. Rather, I’ll call it a “now I don’t need to get into any more debt to finance my lifestyle ever again” fund.

It’s a working title.

Do you have a debt mentality? 

Get Out of the Debt Mentality is a post from: The College Investor. Please check out the site at http://thecollegeinvestor.com or follow him on Twitter @CollegeInvestin. Thanks!

For instance, you walk to work each morning and stop at a donut shop for a flavored coffee drink and a muffin. The first time you stopped, you found the experience pleasurable and after several stops at the shop, your behavior became a habit or even an addiction. While you could easily eat breakfast at home for a fraction of what you spend at the donut shop, it is difficult to forego both the dopamine fix and the coffee once the pattern has become established.

How To Start Changing Bad Financial Habits

One simple solution to the donut shop dilemma is to simply change your route to work. If you do not pass the shop, you will not be tempted to stop and buy your coffee and muffin. Get up a few minutes earlier and eat breakfast at home so you are not hungry and will not stop at another spot. If you spend $5.00 every day at the donut shop and eating at home costs $2.00 per day, you will save $15.00 per week, $60.00 per month, or $720 per year just from avoiding the donut shop. As an added bonus, you may lose a few pounds since the food you eat at home probably has fewer calories than the muffin and a slightly longer walk means extra exercise. Now imagine other aspects of your life that are draining your bank account.

To start changing your spending habits, you have to learn to forego instant gratification for the reward of future financial achievements. Each time you want to spend money impulsively, stop and think about how good it will feel when you put a down payment on a new house, send your child to college, or no longer have to worry about the rent being paid on time each month. By considering these future pleasures, you can train your brain to save instead of spend.

How Do You Spend Your Money?

The first thing to consider is how you spend your money and the best ways to eliminate unnecessary spending. If you have a closet full of things you’ve worn once in your life, you should start shopping at discount stores. Keep track of every dollar you spend for one month and decide which items are non-essential and can be cut from the budget. Sometimes, it’s not necessarily the product or service you are purchasing, but how often you purchase it. For instance, coffee – most people can afford to spend a $2 or $3 dollars twice a week, but if you are spending $50 a week buying lattes and Frappuccinos twice a day, you may want to stop overspending and consider the Latte Factor.

Identify Times When You Overspend

Do you have a standing date with the girls to cruise the mall on Saturday afternoons? Or do you meet the guys at the sports bar on Sundays? Do you regularly spend over your limit when you engage in these activities? If the answer to these questions is yes, maybe you should suggest different activities or find companions who are supportive of your desire to save money for financial goals. If you can identify and avoid the activities that lead you to overspend, you can break bad habits and create good ones.

Get Support

While there are lots of support groups for over-eaters, alcoholics and people suffering from other addictions, you’ll have quite a bit of trouble trying to find support when changing their spending habits. The best way to get support may be to approach family members or friends and tell them how you are planning to change your bad spending habits. You have to be completely honest when you ask for their help and support, and be willing to listen to their criticism if you fall off the wagon. Knowing others are watching you may just help motivate you to stick to your plans.

You Deserve To Be Rewarded

Rewards or bonuses encourage good behavior in children and productivity in employees and anyone who reaches a goal deserves to be rewarded. When you change your bad financial habits and reach a savings milestone, such as $5,000 in your savings account or 3-months’ worth of expenses in your emergency fund, you should plan on giving yourself a bonus for your hard work. Whether you choose to buy something special, have dinner at your favorite restaurant or treat yourself to a spa or salon, plan and budget for the reward so you have extra incentive to meet each milestone in your financial planning.

Visual aids can serve as a reminder to save when you are tempted to spend money frivolously. If you are saving money for a down payment on a house, put a picture of your dream home in your wallet, the place you have to look before you can access your cash or credit cards. If retirement is your goal, a photo of a sandy beach at sunset may work as an incentive to avoid unnecessary purchases. The real reward will be reaching the goals you have set for yourself and pictures can constantly remind you to stay disciplined.

Risks of Credit Cards

While credit cards can be a useful financial tool because they can help build your credit, they can also encourage you to overspend. When you cannot pay off the full balance on a credit card every month, you not only pay for an unnecessary purchase, you pay interest rates of between 12% and 24% on the money that was borrowed. Even if you get a great price on an item, the interest charges can cost more than the purchase if you cannot pay for it when you buy it.

Most people can change their spending habits with a little thought and effort, but there are some who might need to seek professional counseling. Compulsive shoppers may have underlying emotional or psychological issues which must be addressed before they can understand and change their bad financial habits. In the end, not every system or reason for saving money is the same. Explore what goals are truly important to you and use them as motivation to stop wasteful spending and start building wealth.

Gary Dek is a former investment banking and private equity analyst. He writes at Gajizmo.com.

What other tips and tricks do you have for changing bad financial habits?

How To Change Bad Financial Habits is a post from: The College Investor. Please check out the site at http://thecollegeinvestor.com or follow him on Twitter @CollegeInvestin. Thanks!

According to the website BGR, Samsung shipped over 250 million smart devices in 2012. That represents about 21% of market share, and compares favorably to Apple’s 18%. And according to the research firm IDC, Samsung has been gaining market share in smartphones, while Apple has been losing ground. Most of these Samsung devices are shipped pre-loaded with the Google Android operating system. So, it makes sense that according to Strategy Analytics, Samsung raked in 95% of global Android phone profits in the first quarter of 2013.

Frenemies

The numbers show that the relationship between the two tech giants is profitable. But despite the obvious success, not all is well between Google and Samsung. Many tech analysts have been watching for signs of strain between the two. Google is growing leery of its partner’s power. Google is used to being a shot-caller…but Samsung is getting so strong that they no longer need to answer to anyone.

So there is some speculation that Google may sever ties with Samsung. The Wall Street Journal has reported that Google is nervous because Samsung makes 40% of all devices that use the Android OS.

And according to Strategy Analytics, Samsung now makes more money off of Android than Google does. This gives them an advantage and the ability to dictate terms of the relationship with Google. Samsung’s dominant position gives it leverage over Google…for example Samsung could potentially demand exclusive software updates before rivals get them. Google execs are also worried that Samsung might try to demand a larger share of device ad revenue.

There is some reason for Google to be leery of Samsung. The way Samsung dealt with Apple cannot make Google executives feel better about things…

Samsung had a relationship with Apple. At first, Samsung was just a parts supplier. Like most relationships, things started off great. The business relationship progressed over time…but then the honeymoon ended and eventually Samsung cut Apple off completely. They realized they didn’t need them anymore and so they ruthlessly kicked Apple to the curb. Samsung introduced their own Galaxy smart phone not long after spurning Apple. Unsurprisingly, Apple still seems bitter after the breakup.

Google must know the potential for humiliation is there. They do not want the same shoddy treatment. So, they have taken some steps to protect their business. Google acquired Motorola Mobility. This is a step toward vertical integration…and will help the should they decide on manufacturing their own devices. Google could hurt Samsung and other device makers if it decides to manufacture its own version of smartphone or tablets. That’s because it is possible, and pretty damn likely, that Google would give preferential treatment to its own devices.

For example, it would be easy for Google to make sure that the best parts of Android are available only for Motorola/Google devices. Of course, Google denies this and says that it acquired Motorola to add to its patent portfolio.

Tiger

Unfortunately for Google, Samsung is in an extremely strong position. They are the dominate player in the electronics industry. And it seems like they will stay that way for some. And the reality is that manufacturing hardware is more difficult than developing software. There are wide moats around advanced hardware technology manufacturing.

In contrast, the barrier to entry for creating software is low. Any smart-ass teenage kid with a computer and some solid programming knowledge can build a basic app. The same cannot be said for the advanced hardware components that go into modern devices like smartphones and tablets.

Samsung has another built-in advantage. Obviously, they are based in Asia. That means that they have extremely close and long-term relationships with Asian parts suppliers. Specifically, high-quality Japanese parts suppliers. Google does not have the same relationships. And it takes time to build those solid relations, especially in Asian nations. Even with the Motorola acquisition, it will be much easier for Samsung to quickly develop an operating system than it will be for Google to make large quantities of devices.

So a Google and Samsung breakup would be big news. If it happens, it could benefit companies like Apple, Microsoft or Blackberry. Samsung executives can be loudly critical of software makers. And they seem to have no problem leaving business relationships when it suits their needs. Samsung is a scary potential rival for Google. So executives in Mountain View so have some reason to tread cautiously.

But although the two firms are rivals, it seems unlikely that they will end their partnership any time soon. It’s too profitable for both firms. The two giants still need each other and they are likely to remain intertwined in a beneficial relationship revolving around apps, services, and hardware. At least for the time being.

What are your thoughts on Google and Samsung?

Does Google Fear A Breakup With Samsung? is a post from: The College Investor. Please check out the site at http://thecollegeinvestor.com or follow him on Twitter @CollegeInvestin. Thanks!

How much money do you make?

That was the question that a complete stranger asked me this weekend. I was shocked. I stumbled over my words, mumbling something along the lines of “Enough to get by…” and politely changed the subject.

My wife and I were at a party with some friends this weekend, when I was asked this very personal question. As I was recounting the story to my friends later, they laughed and said that I had nothing to worry about, the stranger asks the same question to everyone he meets. Here is why.

That stranger, who asked me the probing personal question, is a millionaire. Money however, is not the most important thing in life to him, by far! To him, someone’s salary is as ordinary as asking them what they had for lunch. A conversation starter. A run of the mill “get to know you” type question. He simply does not measure worth by how much money you have, and feels very free to be incredibly transparent about it. He will answer any question you ask about his finances, and how he has earned so much money.

The man and his wife have six kids, are in the process of adopting five more, homeschool all of these kids, live in a house big enough to comfortably house the Dallas Cowboys (which they never lock…or clean), are raising 16 chickens in a unoccupied wing of their home, and can financially do whatever they want to.

I had to find out more.

How He Earned His Millions

He began earning a significant amount of money as a financial advisor. He manages investment portfolios for a percentage commission of the amount invested. Not a fee based financial planner as I would generally suggest, but in his case, a much more profitable model. He began by targeting high net worth investors. His business plan was to cultivate a small number of large portfolios thereby reducing his work load by avoiding the minutia of dealing with hundreds of smaller investors.

Over the past 15 years he has acquired a small number of investment portfolios that are all worth millions. His investing philosophy is “buy and hold” so he does not do much (any) active trading. Many of his clients are large churches which are chiefly concerned with investing in stable securities. He deals largely in the stable bond market. He also works out of his house, and does not own a computer. His entire business is powered through his smart phone. He handles all of his transactions via phone.

Seven years ago he began to diversify his business dealing to include rental real estate. He used the proceeds from his investment business to pay cash for a rental property in a bustling college town. He rents this house out to college students, or to faculty and staff, and has not had a vacant month in seven years. Since the house was paid for in cash, he decided to take the monthly rent from that first house and save up enough money to place a down payment on a second rental home in the same area. He was essentially doubling the mortgage payment on that second property and, with a significant extra payment from his investment business, was able to pay that mortgage off in 3 years. He then continued this process in using the rent from the homes that he had paid off, to pay down the mortgage on a new property that he would buy. Fast forward to today and he has 22 rental properties, and he is buying more homes at a rate of 4 per year. All of his rental properties are mortgage free.

He also recently expanded his business dealings even more and bought a self-contained storage unit business. He paid cash for this business, and with over 200 spaces at a minimum of $50 per month rent, he has added another significant revenue stream to his business holdings.

The Importance of Money

It is an interesting study in psychology to see how someone is affected by what they hold most precious to them. This strange man I met had more money than I will likely ever see in my lifetime, yet drove a 15 year old vehicle, home schooled his children, did not clean his house, and shopped at thrift stores for his clothes and possessions. I don’t know what he does with all of his money. I assume he is very generous with it and may give a large portion of it away, but by my reckoning he could easily have over $30,000 per month in net profit that he does not need to support his current lifestyle!

He does not place a premium on money and worldly possessions and is therefore not controlled by it. This allows him to focus on the things in life that he does care about, and being financially free gives him the time to pursue the things in life he values most.

I think he is also oblivious to the financial risk of a business venture because he has such a large buffer. He can afford to take risks where I would venture very cautiously. Having his large cash reserves frees him up to invest, and grow his business empire, all while not caring about the extra profit he is making.

Money is a funny thing. Those who do not have it want more of it, and some who have plenty do not care about it at all.

What is your take on money and wealth? Does it control you? Is it what you value most in life? Why would someone create a multi-million dollar business empire if they did not want/need the money?

How Much Money Do you Make? is a post from: The College Investor. Please check out the site at http://thecollegeinvestor.com or follow him on Twitter @CollegeInvestin. Thanks!