Filed under: Debt, Home, Mortgage Confidential

Some have asked me what’s the best use for the $1,200 tax rebate (families with kids get more). That was an easy answer for me personally — I paid extra on my mortgage principal.

You probably realize that each time you make the payment on a 30-year mortgage only a small portion goes toward actually paying off the principal, while a much more massive share of it goes toward paying interest. For example, I calculated the payment for a $200,000 mortgage loan at a 5.5% rate using a mortgage calculator at Bankrate.com. The payment for a 30-year loan would be $1135.58. When one makes the first payment on that loan $218.81 goes toward the principal of the loan and $916.67 goes toward interest.

I then used that calculator to determine how much I would save if I put an extra $1,200 toward the mortgage. The mortgage would be paid off five months earlier and I would save a total of $5,677.90 in payments. You can do the same calculation for your mortgage at Bankrate.com and see what that unexpected $1,200 could do for you.

Personally I’ve made the commitment to be completely debt free before I start retirement. I’ve found the best way to eliminate debt is the Money Merge Account (TM) system and I’ve been working with Theresa Bolton Lynch, who introduced the system to me after I wrote about the snowball effect for paying down debt. I’ve dubbed this system the snowball effect on steroids.

Lita Epstein has written more than 20 books including the “Complete Idiot’s Guide to Improving Your Credit Score.

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Filed under: World wide web, News, Web services, Social Software, Search, web 2.0

There must be something in the water this week. While the biggest new media acquisition story of the day has to be CBS buying CNET for $1.8 billion, big companies are swallowing up smaller ones left and right. Media company Comcast is buying social networking site Plaxo for something like $150 million, while Ask.com is shelling out an undisclosed sum for Lexico, the company that runs Dictionary.com.

While there’s been a lot of speculation recently that someone was going to buy Plaxo, Comcast wasn’t the first company that sprung to mind. We figured a company that already has ties to the social networking space like Google or Facebook would have made more sense. In a blog post on the subject, Plaxo CEO Ben Golub states Comcast has plans to “bring the social media experience to mainstream consumers.” That means using Plaxo’s technology to connect with your contacts across multiple devices. And since Comcast is already in the TV, phone, and ISP business, it should be interesting to see how this plays out. Perhaps your TV viewing habits will automatically be added to your social networking profile? Yeah, we hope not.

The Ask.com/Lexico deal seems like a more natural fit. We doubt Lexico’s popular web sites like Dictionary.com will disappear. Rather, Ask will be able to increase its overall web traffic by bringing the new sites into the fold.

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Filed under: College, Debt

Just because those with higher education have lower death rates doesn’t mean that bachelor’s degrees are all they’re cracked up to be either. In an column for the Chronicle of Higher Education Marty Nemko, a college consultant and author, shares his view that the bachelor’s degree may be the most overrated product in America. Marty cites many factors and studies in reaching this conclusion but the key factor seems to be under-prepared students. Thankfully Nemko provides more than a headline by linking to supporting facts and most importantly offering suggestions to fix the problem!

Doesn’t the under-preparation of students for college talk more about the job high schools are able to do than the job that colleges are doing? Not that I can blame the high schools who have to spend a significant chunk of time on standardized test taking rather than instilling knowledge in kids. Sadly even a high percentage of students who are prepared coming out of high school won’t make enough in the long run to justify the cost of a bachelor’s degree. Another one of the facts Nemko cites is that the literacy rate amongst college graduates is currently declining. Take a second to absorb that; the number of illiterate college graduates is rising!These trends have lead to a cheapening of the bachelor’s degree no matter what your field of study is. Think of this whole deal as a manufacturing process rather than education for a second and perhaps it will become a little clearer. If you produce DVD players for years and years and all of the sudden your flagship players begin slipping in quality, breaking early, not reading discs and just being poor products. What does that do to your brand? That is exactly what happens when colleges churn out individuals who haven’t actually gained the knowledge they need to graduate. I am all for colleges accepting students who are at a lower academic level or who have an impairment that affects literacy but only if these students are provided assistance and held to the same academic standards as everyone else. If students are just pushed through a four year school like a DVD player on the factory line without quality control the institution of higher education as a whole suffers.

What do you think? Are college degrees overrated? It seems that a masters degree is the new bachelor’s degree, at least according to the wanted ads in my local paper. Is this because of the cheapening of the bachelor’s degree or an increased need for people with advanced training?

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