How to Avoid Tax Traps For Scholarship Winners

Paying for college is just about the hardest thing most of us will ever do. The cost of tuition just keeps climbing year and year out, usually faster than the normal rate of inflation! The best way to finance college is to get it paid for with a scholarship. Luckily scholarships are becoming more and more common, and more and more available for students; even students with less than stellar track records in the grades apartment.

But there is one or two major traps when it comes to winning a scholarship… these traps come from the Internal Revenue Service! Most people don’t realize that scholarships can be taxable. Now it’s true, the most scholarships are tax free, but they are only tax-free if they are used only for tuition, as well as books, course materials, supplies, and things like this that are directly related to your education needs.

If you use part of your scholarship to pay for your room and board, then that amount becomes taxable and you have fallen into the tax trap! Personal expenses also fall under the tax trap. Basically any item that you use your scholarship money to pay for that isn’t directly related to your college expenses becomes taxable.

It is incredibly important to keep records of all the things you spend your money on that came from scholarship money. Keep a list of tuition, university fees, books, and all the school supplies that you buy because it’s up to you to prove how much of the scholarship went to educated related purposes and how much of it went to other related purposes.

It may seem silly to have to keep records of a pizza that you ordered on a random Thursday; but if you use scholarship money to pay for it then you really do have to keep track precisely.

Another common trap that most people don’t even think about has to do with employment. If part of your scholarship or financial aid package depends on you working on campus, say in the library or in the cafeteria, then the IRS may consider part of your scholarship as taxable income and not a scholarship. So if you have a $20,000 scholarship, and $5000 of that scholarship comes from a work study program of some sort; then that $5000 may be taxable income.

Again, the rule of the day is to keep scrupulous records. Your financial aid package should spell out how much of your aid is derived from work study programs, and how much of it is derived from general grants and things of this nature. But be sure to keep track on your own as well. Keep any pay stubs that you may receive, and any other records that you can use to show exactly how much money you received from work study and how much you received from other sources.

Paying for College is one of the most difficult things most of us will ever do. Scholarships definitely help, just make sure you keep track of how you spend each scholarship dollar that you receive, and you should end up just fine. It’s a good idea to run your financial aid package passed your local accountant or CPA. Simply ask them if you owe any taxes and have them look through your financial aid package. It shouldn’t cost you very much to talk to a CPA for a few minutes, and the peace of mind will be well worth it.

New Teacher Tips – Are You in the Lesson Planning Trap?

Are you relying too much on your lesson plan hoping it is the ticket to your students’ success?

Do you find yourself sometimes overplanning your lessons to the point of overkill?

Are you relying too much on a lesson planning formula that you were taught only to find that it isn’t particularly working for you?

If you find yourself doing any of these things, then you’re in the discipline trap. And you’ve missed the point about lesson planning.

Too much overplanning is not effective because in fact, you overlook other important teaching elements early on. Being caught in this trap also won’t help you achieve your teaching goals because you are not developing other important “flexibilities” that you need.

Don’t get me wrong – a lesson plan should include the following components, but many new teachers fall victim to the lesson planning trap because:

they think they need to overplan in order to cater to all students in mixed ability classes
they aren’t confident of their own teaching abilities so they overplan
they don’t want a miserable lesson so they overplan
they want to maintain an image of control
they want to avoid their own failures
they were taught in their teacher education classes the importance of a “good lesson” and stick to that
HOW TO ESCAPE THE LESSON PLANNING TRAP
The trick to escaping from this trap is to write a lesson plan that is also true to your teaching style. Every teacher has a teaching style that is unique to him/her. In my ESL classrooms for example, I gradually introduced songs for teaching vocabulary. Since I am also a visual learner, I also brought lots of posters for brainstorming new themes and topics. Finally, I believe in cooperative teaching strategies and so, I differentiated instruction to include individual, pair and group work activities.

PERSONALIZE THOSE LESSONS!

But most of all I personalized lessons. Sometimes this personal element might create a nice spontaneity. Be open to that to happen too. It is part of the teaching/learning process.

When I introduced my eighth grade students to student journal entries in their coursebook after reading about the earthquakes in Turkey, I brought in my own Snoopy journal from eighth grade and I read brief parts to them. (not private ones!) After this, usually most of my students were relaxed and it was time to do the main reading task of the lesson. They even asked me questions!

After these lessons, I never got caught again in the lesson planning trap again because I avoided sticking to any formula of what is “a good lesson”. When I knew what excited my students, I continued to build upon these experiences by doing something “beyond the box.”

So avoid the lesson planning trap today by using a few of these important lesson planning strategies. Stepping away from the formula of planning “a good lesson.” Try this advice. I believe it will work for you.

To receive your free ebook, Taking Charge in the Classroom and other in

Avoiding Value Traps – Promissory Note Investing – The Key to Investment Success

Investment Value Definition
The value of an investment asset depends upon it’s the ability to produce income in the future -cash flow. A buyer will not pay more for an asset than the present value of its future income, considering the risk of realizing the future income. A buyer will not pay more for an asset than it would cost to acquire or create another asset that would provide equal or greater income. These basic truths are not subject to opinion, but there is no “foolproof way” for determining future cash flows; no one can predict the future. The note investor estimates future cash flows; those cash flows are then discounted back to the date of valuation at some appropriate yield rate that reflects the all of the risks.

“Cheapness” is Not the Whole Story”
Investing is seeking value that justifies the amount paid; just being cheap is not enough. Many “cheap” promissory notes are cheap for a good reason-they have real problems that require real talent to solve. In investing it’s not how much you know, but how realistically you define what you don’t know. “Bottom fishing”, “Fire sale”, and “Undervalued” are exciting terms that can be bait to lure you into an investing trap.

You need to do just a few things right if you can avoid doing a big thing wrong. What are some of the “wrong things” that are value traps?

Cheapness” by itself does not make an investment good
Try to learn why it’s cheap; dig out the reasons for the low price of this asset. Remember, the seller may know more information then is being disclosed to you. Sellers are not obligated to “educate you”; you do your own due diligence. A “bargain” may initially appear very promising, but it can become a trap. The goal is to hunt down a valuable note while avoiding getting stuck in a value trap.

Bad management is a value destroyer
A management responsibility, called “note servicing”, is created when investing in a private promissory note. This responsibility comprises: monitoring payments due monthly, recorded payments received, monitoring hazard insurance and property tax, and preparing year-end reports to the IRS and to the borrower. If this seemingly routine and dull is mishandled or neglected, the value of the note can be diminished and discounted. Poor loan servicing is a major value trap. Value is a relative thing, not an absolute measure. What’s valuable to one investor may be a trap for another.

Not recognizing or not understanding the asset is a value destroyer
When looking for bargains, a note that appears cheap because it can be bought for less than its unpaid balance may actually be overpriced when its risks are recognized and understood. The trap springs when the investor buys at a low price and later learns that many risks were overlooked, and the low price paid was actually too high. A low price (or any price) means nothing until it is compared to the actual risks assumed and benefit obtained. As with any investment decision, thorough research and evaluation is recommended before investing—especially in any asset that appears to be a bargain.

Value traps are found in two main areas
1) Cash flow: The quality and the quantity of the cash-flow or interest income is a primary component of value. The main reason most investments are made is to earn periodic income. If the income stream is weak or questionable a value trap is set to spring.
2) Collateral security: The quality and the quantity of the security backing the promise to repay is a primary component. A promise to repay a debt is always to be doubted unless it is supported by valuable, liquid assets. The ability to protect the investment is crucial.

How to improving the odds of success and avoid value traps
• Don’t buy blindly-understand the risks and benefits before writing the check.
• “Cheap” promissory notes are cheap for a reason; learn those reasons before writing the check.
• “Cheapness” by itself is not indicative of a bargain or a good investment; it is just the starting point of the evaluation.

Lawrence (Larry) Tepper specializes in the valuation and appraisal of promissory notes, mortgage notes, and cash-flow instruments nationally. Nation-wide services for banks, trust companies, self-directed IRA accounts, estates, attorneys, CPAs, and individual investors.

Consulting Services-Free Appraisal Price Quotes

EDUCATION AND TRAINING
Law Degree /Accounting Minor University of Denver
Managing Colorado Real Estate Broker– Promissory Notes Specialization
Certified Commercial Investment Member from the National Assoc. Realtors (CCIM)

PRACTICAL EXPERIENCE
35 + years of national promissory note and mortgage note appraisal and valuation for Banks, Trust Companies, Attorneys, CPA’s, Estates, Trusts, Executors, Administrators, and Financial Advisors.

“No charge” review and discussion of your file and documents–Fee appraisal quotes– Call or email.

Lawrence (Larry) Tepper

Our Volatile Subsistence Hedged by a Sound Financial Education

People living in most developed countries and progressive economies tend to believe that their way and quality of live will remain forever. They hold that it is their birthright to be enjoying the privileges of a well-maintained society. Most of us westerners think that by simply being a citizen of our countries is more than enough to give them the quality of life they choose. Through the financial education I have acquired from over the past year, I have come to realize that this pseudo-stable society is just a hoax.

The American Dream & The European Dream
Ordinary Americans may become complacent of their lavish lifestyles because almost everything is available to them at affordable prices. The American Dream of having a nice house in a neat neighborhood, a nice car, a cool job, wide screen TVs and weekend barbecues are the ‘simple’ things most Americans take for granted. Europeans may think that their fashionable lifestyles will continue indefinitely because top designers are constantly out-pacing each other. Westerners assume that all will be well because their governments are taking care of them.

Our Volatile Subsistence
However, the sad reality is that these modern conveniences are dependent on economic conditions. Once the economy behaves unpredictably, modern living behaves unpredictable as well. I encourage everyone to wake up to the reality of life and act decisively. As proven by the recent financial and sub-prime crisis of 2008, even mature economies like the USA and Europe are not as stable and impervious as experts claim and as you and I assumed.

Conditioned Illusion
The problem is systemic. It was simply passed from the previous generation to the next. We were all led to believe that by just following the traditional success formula of doing well in school to get a decent job, we can choose the lifestyle that we want. Many of the new rich today preach that scholastic education was for the predictable Industrial Age. This meant that getting good grades in school no longer translates into a financially secure future.

Racing with a Dead Horse
The sad reality is that we are still flogging a dead horse in the race to financial freedom. College is now the ‘new high school’ – as more and more students graduate from college, their competitive advantage in the job market dramatically decreases. Now, graduate programs are becoming the ‘new college’ – but don’t count on it for too long. It is crucial, now more than ever for people to change their views about wealth and education. After all, the real difference between the truly rich, the ‘rich’ and the rest is not the amount of money that they have, it is what they know and do with what they have.

Fight Back and Take Control
You need to acquire the correct knowledge that will help you take specific measures to protect your future from economic uncertainties. If you wondered why the truly rich are not bothered by external perturbations, it is because they have established specific measures to mitigate and counteract these problems. The truly rich do not depend on external conditions to be what they want to be. Most of us are like sail boats that depend on the wind just to move at sea and obviously suffer on windless days. The truly rich are cruisers with powerful engines fueled by privileged information to tread across the sea of uncertainty regardless the external conditions.

Escaping the Trap
The first step to get out of the trap is to realize and accept that you are really stuck in the trap. You need to be honest that you have a problem that needs to be dealt with face to face. The next move is to think outside the trap. As Einstein reminds us: “You cannot solve a problem from the same consciousness that created it. You must learn to see the world anew.” Then you have to get yourself outside by applying the lessons you’ve learned. Finally, you also need to do the same steps with people whom you are living with – because they will support you if do and they will drag you if you don’t. With our economy on the verge of total collapse, there is not better time for you to escape this vicious rat race.

By the way, do you want to learn how to create (or recover) incredible wealth during today’s economic crisis?

If so then make sure you claim your FREE Subscription to Hameed’s Breakthrough E-Newsletter the “Maverick Entrepreneur” at [http://HameedHemmat.com]

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