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Tim Austin - President of National Association of College Funding Advisors
Sure-Fire Results: How Old Sensibilities Are Proving a Potent Balm for Modern Personal Finance Ailments from BankonYourself.com
Tim Austin, a leading proponent of 'old-fashioned' spending and savings strategies, recommends a time-tested 10/10/10 financial formula: saving 10% of gross income for the near-term; 10% for the mid-term; and setting aside 10% for the long-term.
Austin's favorite savings tool is specially-designed dividend-paying whole life insurance policies such as those structured by Bank On Yourself's specially trained and authorized advisors.
Tim Austin, the 46-year-old Founder and President of the National Association of College Funding Advisors
Tim Austin, the 46-year-old Founder and President of the National Association of College Funding Advisors
Among the nation's most-respected and leading proponents of revisiting the financial playbooks of our grandparents and great-grandparents is Tim Austin, the 46-year-old Founder and President of the National Association of College Funding Advisors.
, who knows firsthand that the old sensibilities enjoy increasing modern day currency, has educated more than 5,000 families since 1994 on how average American families can pay for college without going broke.
Like so many financial advisors, Austin
career dishing out the same commonplace investment recipes that every other planner was serving their clients: a steady diet of stock and bond funds.
grandmother - who lived through the Depression - asked him to safely invest $10,000 on her
instructed him: " I want you to put me in something safe.
I don't care about the interest rate, I just don't want to lose any money."
investment, it turns out, was a defining event for Austin
Still young and relatively inexperienced, he
followed the advice of more seasoned financial planners in his
firm and put his
grandmother's entire $10,000 in a bond fund in February 1987.
Everyone assured him her
funds would be protected.
charted a new course - one more aligned with his
grandmother's needs, experiences and sensibilities.
The core tenet: there is no need to ever put money at risk in order to grow it and use it reliably
typical client is 47 years of age and faces the dilemma of juggling current debt, paying for one or more children headed to college, and still setting aside sufficient funds for retirement.
help and some individual self-discipline, Austin
says that in roughly 13 years - or by the time his
clients reach age 60 - they will have paid for college, be free of all bank and credit card debt, and be socking away savings.
inspiration from the decades of the 1940s and 1950s, when it was commonplace for Americans to set aside 10% of their gross income for short-term needs, such as a vacation or holiday gift-giving; 10% for anticipated mid-term needs and potential emergencies, including a new car, replacement of major appliances, a new roof, and college tuition; and 10% for long-term retirement planning.
In fact, Austin's
experience has shown that the average family could increase their lifetime wealth by $500,000 - or more - simply by financing their cars and vacations through their policies, without taking on the risk or volatility of stocks and real estate. (To find out how much more wealth you could have by using this method, request a free Bank On Yourself Analysis.)
While our grandparents and great-grandparents instinctively followed a 10/10/10 style of living, now it's typical for Americans to spend 30% or more of their gross income on mortgage interest, credit card debt, car payments, and other installment loans.
"Pretty much in today's world, consumers have swapped debt payments for the 35% of their income that used to go into savings and investing," Austin
Depending upon one's tax bracket, he
notes, 30% or 35% of gross income can actually represent as much as 50% of net income.
Not only have Americans come to accept debt-financing for many purchases, Austin
says, they also have lost the discipline of saving 10% of their gross income for the long term.
believes, the main culprit is obvious: 401(k) plans and the unrealistic returns promised by the financial advisors who promote them.
adds, "have been substantially misled on what needs to go into their IRAs and 401(k)s in order to hit the numbers they need to have."
"It was very common that the whole life insurance agent would be coming around on Friday mornings to collect the $1 or the $5 premiums," says Austin, who was born in 1964, but has extensively researched the period.
"Those policies were very commonly used for emergency funds, car loans, business loans and such."
believes so strongly in the value and utility of permanent dividend paying whole life insurance policies that before his
clients ever put another dollar at risk, he
advises them to work with a Bank On Yourself Authorized Advisor to structure one or more policies tailored to their needs and budget.
(To get a referral to one of 200 advisors who have met the rigorous requirements to be an Authorized Advisor, request a free Analysis that will show you the bottom-line numbers and results you could have if you added Bank On Yourself
to your financial plan.)
general rule of thumb is for his
clients' first step toward financial recovery to be to accumulate roughly two years of average expenses in a whole life policy that is consistent with the Bank On Yourself
, himself, helped develop and leads the nationwide Bank On Yourself Authorized Advisor training program, so he
understands the power of these advisors to help their clients restructure their entire approach to savings, spending and investing.
(For those who can, Austin
recommends keeping lifestyle expenses under 50% of gross income.
While high school and college graduates in the 1940s and 1950s were accustomed to such pragmatic 'home economics' - as the field of personal finance was known back then, most men and women who walk into Austin's
Troy, Michigan office these days come peering into what they believe is the financial abyss.
"They are looking at college bills, looking at retirement, and just not seeing how the heck they are going to be able to do all this stuff," Austin
"The reality is that if they stare ahead to age 70, it is going to be overwhelming.
added to their trepidation by recommending that they immediately begin saving 30% of their gross income, Austin
shell-shocked clients would walk out, saying, "Well shoot, I don't have a chance, I might as well just give up."
So rather than asking his
clients to slam on the brakes and jam their financial throttle into full reverse, Austin
patiently counsels those who seek his
help: "You begin where you are."
For starters, Austin
asks clients to help him put their monthly budget under a microscope.
goal: to begin reducing the percentage of their gross income that is directed at debt service to under 20% - and to do it as painlessly as possible.
"I have been specializing in this area for 20 years and I haven't met a family, no matter what income level they are at - from $40,000 a year to $400,000, to $1 million - that I haven't been able to find some very simple things within their monthly budget that they can trim using some very simple tweaks," Austin
Austin asks clients to help him put their monthly budget under a microscope
"So you start where you are, trying to find those dollars - $500, $600, $1,000 a month" to redirect to a whole life insurance policy, he
As the cash value in a Bank On Yourself-style policy accumulates, Austin's
clients are able to use their policies to self-finance short-term and mid-term purchases.
favors whole life policies that are consistent with the Bank On Yourself strategy because they have provisions that permit policyholders to continue earning interest and dividends on the cash value of their policies, even while borrowing funds against that very same cash value to pay for the kind of expenses that families previously financed with bank loans and credit cards.
NOTE: Not all companies pay the same dividend on borrowed funds.
An Authorized Advisor can recommend companies that meet all the requirements to maximize the power of this strategy.
You can get a referral to one when you request a free Analysis.
"If we look at Bank On Yourself
from an engineering perspective, it is an economic machine that is built to get better with time," Austin
"Thirty years from now, not only is all of the money that you paid returned to your (whole life insurance) policy, but you are going to have all of the growth from compounding interest, dividends and then some," Austin
And when the policies are properly structured, the funds grow in a tax-free environment.
A House is a Home, Not An Asset
believes that housing choices and home mortgages are at the root of many American's current perilous financial state.
"During the first ten years of a typical 30-ye
NACFA - National Association of College Funding Advisors
The following are a few thoughts about N.A.C.F.A. (National Association of College Funding Advisors) and its founder, Tim Austin.
My experience with the group is that Tim does everything first class, plus he goes out of his way to make sure everyone is treated both fairly and professionally.
His willingness and ability to train his producers is outstanding.
As a member of N.A.C.F.A's top producers group I feel privileged to belong and am most appreciative of what it has done to improve both my business and earning power.
I would recommend N.A.C.F.A. and Tim Austin without reservation to anyone who wants to be financially successful through the college funding process and at the same time have fun doing it."
Tim Austin Transcript
"How to pay for college without going broke" with guest Tim Austin (08-23-2005)
We welcome Tim Austin
to Collegiate Athlete Today
, how ya doing?
And we are going to talk about all of this with Tim
.A guy who has actually filled it out and now does it for a living.We are going to talk to Tim
about all of this when we come back.More with Tim Austin
on CA Today
when we come back.
...We are talking with Tim Austin, president of the Nation Association of College Funding Advisors, an expert at showing families how to pay for college without going broke.
Which is, ironically, the title of his
, you have a world ranking, you are coming into college and you have to settle for more of a walk-on scenario.
Which means what, Tim?
Well that's what we find too, we deal with thousands of kids every year, Tim
, who are looking at how to pay for college.And since most kids aren't getting that fully funded scholarship, they are getting partial scholarships so the next part of that is to find a way to take care of the rest through this FAFSA process.A lot of families, because they got some information from a family friend or a neighbor or an uncle think that they won't qualify because they make too much money or they don't try because maybe last year they didn't qualify.And mind you this changes every year, doesn't it Tim?
, quick question, just for the families and students out there listening.
More with Tim Austin
on the other side of the break here.
Welcome back, John Kerr here along with Chris Krause and we are visiting with Tim Austin
and our email address is CAToday@ncsasports.org.
, we have a couple of e-mails that just came in here.
we are going to have to cut this short because we have Dave Collins coming up next.But this is so much valuable information for parents and students to know.Tim Austin with NAFCA, email your questions to CAToday@ncsasports.com.
And we'll make sure that you get them answered appropriately.Tim
it's been a pleasure having you on.
we appreciate it.
John Kerr here along side Chris Krause and I'm kind of in awe of the informational segment that we just had with Tim Austin
It's hard to put into words the value of that information that we heard here with Tim
We want to thank our guest Tim Austin
for joining us and again you can email us at CAToday@ncsasports.org for a free copy of Tim's book.
8-23-05 "How to pay for college without going broke" with guest Tim Austin _ Tim Austin
Financial aid expert, Tim Austin
discusses what families must do in order to relieve the pressure of paying for a college education.Austin, who is the president of the National Association of College Funding Advisors, will also discuss the different types of financial aid available.Austin
is the author of the book, "How to pay for college without going broke."