Tuesday, November 16, 2004

529 College Savings Plans

Sen. Peter Fitzgerald: boring in a calming, hypnotic way.

This is about "529" College Savings Plans. Here's how they work.

what are basis points?

Basically you can get a 529 savings plan from a state (each state has their own plan) or from a broker. You pick someone to be a beneficiary, and as long as you use the money to pay for their school fees then you don't have to pay taxes on your gains.

Oooh, so the problem is that the government sets up this opportunity for people to avoid taxes if they're using the money for college, but other people are cashing in, taking a cut of the money savings.

This is spectacularly boring. I think if this guy had a simple diagram drawn on the front of his shiny forehead that conveyed the main point of his speech, people would be more likely to actually soak up the message. There is just no passion in the way he is speaking. Aren't people getting screwed here? Get a little excited. Tell us why we should care about this. I'm giving Peter Fitz low scores in enthusiasm and sincerity.

Frank Lautenberg is on the mic. Democrat from Jersey in the house. He just said that in some cases investors are paying such high fees that those fees cancel the benefits of the 529 savings plan. So basically brokerages know they can charge higher rates.

"I want to make sure that everyone who wants to go to college and will do the work, can go to college." That's something that people can get behind. "We've got to do whatever we can to seed, grow, and harvest an educated society." Nice.

Fitz just said "basis points" again.

This is so boring it's magic. Fitz talks out of one side of his mouth. And he only moves that eyebrow too.

NOW...THE WITNESSES!

First up, Steven Miller. He's moving his mouth, but it's like nothing's coming out. I wonder what a 1099-Q is.

next up... MARY SCHAPIRO! kudos on the spelling Mary, I didn't know you could do that. She's the vice chairman of the National Association of Securities Dealers. Hahahah. Schap just said something really boring and then Fitz shot her a look like she said she wasn't wearing underwear. Apparently there is a thing called a "Coverdale Education Savings Account." This is where you go on tour with David Coverdale and Jimmy Page and collect donations for your children's college account, shunning the more popular "Plant Education Savings Account."

Next up, Ernesto Lanza. He's seems pretty giddy to be there, you have to love that. He's talking about how brokers aren't allowed to steer customers towards things that will increase their commisssion. But how can you enforce that? Isn't that just an honor system? - Ernesto works for the Municipal Securities Rulemaking Board.

QUESTIONS!! Yeah. First one's for Schap. Fitz wants to know why she started investigating 529's. Guess. Just guess. No. Nope. It was the large amount of money that people were investing in 529's. Bet you didn't see that coming. By the way, you can pronounce her group as "nasdie." That's what Fitz says so I think that must be fair game.

I just finished 100 minutes on the mill, aka 4.49 miles. I had just about enough of this show. I'm going to go meditate.

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