Finance Xpress

Posted by: John S Kiernan

Saving money is a lot like eating right. We all know that we should save up for emergencies, retirement, and personal goals, just like we know we should eat more vegetables and fewer cookies. But doing it isn’t so easy. The problem is temptation. It’s hard to keep from spending money when it’s sitting right there…

How to Use Automatic Savings Accounts & Apps to Build Wealth With Less Stress is a post from Money Crashers.

      

Posted by: John S Kiernan

If you have a civil judgment or tax lien on your credit report, we’ve got some good news for you: It might be gone come July 2017.

That’s when the three major credit bureaus – TransUnion, Equifax and Experian – will start to require more documentation for such public records. As a result, all existing civil judgments as well as more than half of all tax liens will be wiped from consumers’ credit reports, according to the bureaus. And the average person who’s affected will see his or her credit score rise by about 10 points.

While any credit-score increase associated with these changes is unlikely to exceed 20 points, every piece of negative information that falls off your credit reports is good for your credit score. So we definitely recommend reviewing your credit reports on a regular basis, both to confirm the removal of problematic public records and to make sure no other mistakes wind up costing you money.

Below, we’ll explain what exactly civil judgments and tax liens are as well as the odds of your score improving due to their removal.

Everyone’s on board for higher credit scores. But a lot of us aren’t up on the latest credit-industry lingo. And the terms “civil judgment” and “tax lien” are hardly self-descriptive.

So here’s a quick overview of the two types of records that the credit bureaus are cracking down on:

• Having a Civil Judgment on your credit report means you’ve lost a lawsuit and the judge has ordered you to pay the debt for which you were sued. This tells potential lenders that the government is first in line for your disposable income, meaning less is left for credit card and loan payments.

• A Tax Lien turns physical property – usually a house or car – into collateral for an unpaid tax obligation. It basically prevents you from selling that property before paying the government what it’s owed.

Both will be listed in the Public Records section of your credit report. Your WalletHub Credit Analysis grades can also quickly give you a sense of whether you have anything to worry about.

You can monitor your credit score for free on WalletHub to see if it improves. WalletHub is the only site with free daily credit score updates. So you’ll know as soon as anything changes.

We can also learn a lot from some research that VantageScore – one of the leading credit-score companies – released about a year ago, examining what would happen to credit scores if civil judgments and tax liens were removed from consumers’ credit reports entirely. The results aren’t perfectly applicable to the present situation, as tax liens with the proper documentation will remain in real life. But they do provide a pretty good sense of what to expect.

Here are the percentage chances of an individual’s credit increasing, in the absence of tax liens and civil judgments:

We strongly recommend that you review your credit reports from time to time in the coming months. For one thing, you’ll need to confirm the removal of civil judgments and tax liens, or at least inquire about any that remain. In addition, there are plenty of other credit-report errors to watch out for. And catching them early will save you a lot of time, money and effort.

You’re entitled to a free copy of each of your major credit reports once every 12 months from AnnualCreditReport.com. And you can get free daily updates to your TransUnion credit report on WalletHub.

Two of the biggest robo-advisors are Betterment and Wealthfront.  At first glance they may appear to be virtually identical. Both create diversified portfolios with similar low cost ETFs. Both rebalance your portfolio, reinvest your dividends, and offer tax loss harvesting. Both have slick, easy-to-use websites.

But there are some significant differences between Wealthfront and Betterment upon closer inspection. A podcast listener named Dan touched on this in a recent email:

Are you going to do a podcast on what made you choose Wealthfront for your taxable account (other than to keep multiple sponsors happy!)? I assume it’s for the Wealthfront 500 and tax-loss harvesting benefits it offers, but Betterment counters that this is only done on a portion of the account, and not worth the added cost. Is this the future of indexing or a gimmick? Still very interested in this topic (robo-advisors) which you brought to my attention.

Many thanks,
Dan

(Betterment was at one time a sponsor of the Dough Roller Money Podcast. As of today, neither Betterment nor Wealthfront are sponsors, but both offer affiliate programs that I participate in.)

So, let’s address Dan’s question about Betterment versus Wealthfront, starting with the basics.

Listen to the Podcast of this Article

1. Account Types

Wealthfront offers the following account types:

• Taxable accounts (personal, joint, trust & corporate)
• Traditional IRA accounts
• Roth IRA accounts
• SEP-IRA accounts (for small businesses)
• IRA transfers
• 401(k) rollovers
• 529 college savings plan accounts

Betterment options are more limited:

• Taxable accounts (personal, joint, revocable trusts, irrevocable trusts)
• Traditional IRA accounts (including 401(k) rollovers)
• Roth IRA accounts
• SEP IRA accounts
• 401(k)

2. Cost

Which one is cheaper depends on your account balance.  In addition to the costs of the ETFs, each service charges a management fee.

Wealthfront: Charges a flat rate of .25% of assets under management, though the first $10,000 is free.

Betterment: Betterment announced a new fee structure in February 2017. Their fees now fall into three categories: Regular, Plus, and Premium.

The fees are as follows:

• Regular – 0.25%
• Plus – 0.40%; minimum 100K and an annual call with their CFP and licensed financial experts
• Premium – 0.50%; minimum 250K and unlimited calls with their CFP and licensed financial experts

Related: How Half a Percent Can Ruin Your Retirement

As you can see, Betterment uses a sliding scale in which the fee actually increases as your balance increases. As a rule, you’ll be better off with Wealthfront in any scenario in terms of costs; you simply get more access to financial experts for more of your money in fees w/ Betterment.

3. Asset Allocation

Both use solid asset allocation plans. They each allocate your money into different exchange traded funds (ETFs). Personally, I think both platforms have reasonable asset allocation plans.

But there are also some differences:

1. Betterment favors value funds – companies that are undervalued according to certain measures, like P/E ratio.
2. Wealthfront has real estate investment trusts (REITs), Betterment does not.
3. Wealthfront has commodities, Betterment does not.
4. Wealthfront tilts toward dividend paying stocks – they have a high dividend yield ETF, while Betterment doesn’t.
5. Wealthfront has no US government bonds – yields are low so they don’t see them as a good investment; Betterment does have US bonds.

On balance, I prefer Wealthfront, but it’s a close call. You may see if differently based on your own investment preferences.

Learn More About Asset Allocation

4. Website

Both are easy to use and to understand. It’s also easy to change asset allocations. But I think Betterment is the better of the two.

5. Tax Loss Harvesting

Both offer it, but you have to have a certain account minimum for each.  With both Betterment and WealthFront there are no minimums for tax loss harvesting.

Tax loss harvesting doesn’t eliminate your tax liability, it defers it. That has value, because the more money you can keep in your account, the more you can earn on that balance.

For that reason, there’s no doubt that tax loss harvesting has value, and increases your return. It’s almost impossible, however, to quantify the value of tax loss harvesting.

Wealthfront does offer a unique tax loss harvesting feature called the Wealthfront 500.  For those with at least $500,000 in a taxable account, Wealthfront will buy shares in all 500 companies in the S&P 500, rather than invest in an index ETF.

By doing so, they can generate additional tax losses on a company by company basis.  They plan to roll out a similar feature for those with balances of at least $100,000.

6. Account Minimums

Wealthfront has a minimum of $500 (down from $5,000) to open an account. Betterment currently has no account minimum required, and you are not charged a fee for an account that has a $0 balance.

I confess to having a personal bias toward Vanguard. I’ve been with them a long time. But both Betterment and Wealthfront are good options.

The post Betterment vs. Wealthfront: Which Is the Best Robo-Advisor in 2017? appeared first on The Dough Roller.

One of Harvard University’s famous gates. (Photo: Theresa Power / Flickr)

Our latest Freakonomics Radio episode is called “The Harvard President Will See You Now (Rebroadcast).” (You can subscribe to the podcast at Apple Podcasts or elsewhere, get the RSS feed, or listen via the media player above.)

How a pain-in-the-neck girl from rural Virginia came to run the most powerful university in the world.

Below is a transcript of the episode, modified for your reading pleasure. For more information on the people and ideas in the episode, see the links at the bottom of this post. And you’ll find credits for the music in the episode noted within the transcript.

*      *      *

Our producing partner is WNYC, a public radio station whose business model relies on listener support. You can do your part at http://ift.tt/1Tq3WGN or by texting the word “freak” to 698-66. The best kind of listener support is when you becoming a Sustaining Member — that is, you make a regular monthly donation. The average member gives $7 a month. That’s not too steep, is it? In return, you’ll get some Freakonomics Radio swag and we’ll keep you in the loop with our newsletter. Even better, a generous partner of WNYC’s, the Tow Foundation, has issued a challenge: if 500 Freakonomics Radio listeners sign up by June 30th to become members at just $7 a month, the Tow Foundation will contribute an extra $25,000. Thanks for your help. Now, on with the episode.

[MUSIC: Travis Geer, “Halcyon Summer” (from Cinema Spectaculaire)]

FAUST: I’m Drew Faust. I’m the president of Harvard University.

DUBNER: That is a nice thing to say, isn’t it?

FAUST: It is.

Drew Gilpin Faust. (Photo: Harvard University)

Drew Gilpin Faust recently announced that in 2018 she’ll step down as Harvard president. So we thought it’d be a good time to replay an episode of Freakonomics Radio featuring Faust that we recorded back in August of 2015. Hope you enjoy.

FAUST: School is starting up and we have undergraduate freshman arriving tomorrow so we are going to be back fully in the swing of things very soon.

DUBNER: Tell me, maybe in 60 seconds or less, what you actually do in a given day. That’s assuming there is a given day in your life, which there may not be.

FAUST: There really isn’t a given day and things vary a lot depending whether I’m here on campus … visiting alums and others … travelling around the country… meeting with alumni and officials across the globe… a series of meetings with different members of the community… the deans who run Harvard schools…meeting with senior administrators… the office of general counsel… legal affairs or our executive vice president… meeting with students or faculty, perhaps attending a student performance or a student athletic event… meeting with the undergraduate student government… attending a faculty meeting in one or another… meeting with individual faculty or groups of faculty to hear about their aspirations and their research and teaching.

Those are just some of the things that could fill the day. It often goes from a breakfast like the one I had this morning with a member of our Board of Overseers through a day of meetings into an evening of perhaps a dinner with one or another constituent group or a performance or some other evening activity.

DUBNER: I’m exhausted listening to you. And part of today you’re spending with Freakonomics Radio, for which we’re very grateful.

*      *      *

[MUSIC: Muzio Clementi, “Duettino in Do maggiore W024 All negra – C major” (from Piano Works Vol. 17)]

Drew Gilpin Faust was installed as the president of Harvard University in 2007. Her immediate predecessor was Derek Bok, a longtime Harvard president years earlier who came back for one year as acting president after the very short and very stormy tenure of Lawrence Summers. Faust had spent 25 years as a history professor at the University of Pennsylvania, and later became dean of the Radcliffe Institute for Advanced Study at Harvard. As an historian, her specialties are the Civil War and slavery. Among her books are This Republic of Suffering: Death and the American Civil War and Mothers of Invention: Women of the Slaveholding South in the American Civil War.

DUBNER: Your friend Elizabeth Warren, now a U.S. Senator, formerly a Harvard Law professor, said that you “were raised to be a rich man’s wife. Instead she becomes the president of the most powerful university in the world.” So how’d that happen? You came from an environment in which president of Harvard was not really the most expected outcome, yes?

FAUST: It was an unimaginable outcome. I grew up in the 1950s and 1960s in rural Virginia in the Shenandoah Valley in a conservative community in a conservative family, a traditional family. My mother said to me, “It’s a man’s world, sweetie, and the sooner you figure that out, the happier you’ll be.” The expectation for young women in that environment was that they would grow up and marry and have children and that they would be subservient in significant ways to the aspirations, ambitions and agendas of the men whom they married. But it was a time of change in many dimensions. The first and most obvious one to me as a child was the emerging Civil Rights movement. The Brown v. Board decision sent Virginia into a tailspin. Our senator, Harry Byrd— who came from my home county — advocated closing the schools rather than integrating them.

This was all aswirl around the issues of race, very much on my mind, even as a young child. I became something of a rebel. I was good in school and happily got sent north to Concord Academy as a teenager and I found that being a bright young woman had a place —

DUBNER: That’s an all-female prep school, yes?

FAUST: It was then. Concord gave me a root, an avenue and a lot of support to ask questions which were very much in the air; to find a path for myself that could take advantage of doors opening in front of me as women were given opportunities, increasingly, to undertake activities that just had not been imaginable before. I should say in all of this, despite the prevailing ideology of my youth about the appropriate place for women, I had two very powerful grandmothers who, from behind the scenes, were the force in the family, even though the men in the family officially were in charge. Those grandmothers set an example of female power for me that had its effects.

DUBNER: You once said at a Harvard College Women’s Leadership Awards ceremony that, “I think I was born a pain in the neck.” Talk a bit more about that, your desire to agitate the status quo.

FAUST: Well, it began with a demand for equality with my brothers.

DUBNER: You had three brothers, yes?

FAUST: Three brothers, and from an early age they were given freedoms and permissions that I wasn’t. I was required to do things like wear little lacy garments that I found objectionable. My first pursuit of equality was for myself in the family. I’d do things like refuse to come to dinner because I was told I had to wear a dress or I couldn’t come in from the barn where I was taking care of my steer and not change before dinner. So I’d throw fits about that kind of stuff. But early on the disparity between what I was being taught in school and in church — about the American Dream and about humane justice and Christianity — seemed so at odds with the position of supporting segregation that was taken for granted in the white community.

I began chafing against that and wrote a letter to Eisenhower when I was nine years old urging him to support integration.

DUBNER: You don’t happen to have that letter with you handy, do you?

FAUST: I don’t have it with me. It is available. I found it in the National Archives in the early 2000s. I was astonished.

DUBNER: I have it handy. Could I read it to you?

FAUST: You do? Sure!

DUBNER: I’d love to just get your commentary on it.

FAUST: It’s so interesting. Go ahead. My nine-year-old self.

DUBNER: I read that you were a little bit trepidatious about going back and finding it, hoping that it squared with your memory of what it said, yes?

FAUST: Right, right.

DUBNER: All right, I’ll read your letter that you wrote in February 1957, although it was apparently incorrectly misdated as 1956.

[MUSIC: Pat Holmberg, “Album for the Young – Melody” (from Schumann – Album for the Young and Scenes from Childhood)]

DUBNER: Nine years old. Did you hear back from the President?

FAUST: I got a letter from a staff member, not from the President himself. My parents hadn’t known I’d written this letter. So when this acknowledgment from the White House arrived, they were astonished and asked me what it had been about. I told them and they rolled their eyes. But neither one of them was alive when I finally found the original of the letter in the Eisenhower Library.

DUBNER: That’s a shame. You plainly had a very pronounced sense of segregation, be it male/female, black/white and so on. Can you just describe a little bit more the environment you grew up in? I know that you led a life of great privilege, we’d all agree, from a family of substantial means? Your parents, I understand, met at a fox hunt —

FAUST: That’s true.

DUBNER: — which is a nice way to meet. I’m curious if you could describe the environment, especially racially, of your growing up and how that led to this nine-year-old girl who wrote this letter to the president.

FAUST: Clarke County was the smallest county in Virginia and it’s on the Shenandoah River. But it’s an interesting county because even though it’s in the western part of the state, where slavery was less installed than along the seaboard on the eastern part of Virginia, it was a[n] outpost for a lot of Tidewater families — Carters and Byrds and others. Their younger sons came to that area in the 18th and 19th century. So it had a substantial African-American population that persisted into the era of my childhood. I lived in a community where I had a lot of interaction with African-Americans, but it was a hierarchical interaction. They lived in a village called Millwood which was near the farm on which we lived. Basically, African-Americans worked in a variety of roles for the white people in the neighborhood.

I lived on a large farm and my father was in the horse business, so I spent a lot of time with horses and other animals. I was in the 4-H club. I raised cattle and sheep. I attended a school in that area just a few miles from the house in which I lived. There’s a certain conflict or con- complexity about the family-of-means idea. Yes, my grandmother had substantial means, we lived on this large farm, but my father never made a lot of money. There was this scramble, always, for cash. There was a lot of land, but there was not a lot of disposable income and he relied, in a number of domains, on my grandmother. For example, she paid my tuition at Concord Academy. That made it a little more complex than simply a spigot of available resources. There was a sense both of wealth and also awareness of what limits there might be.

I also came from a community in which I did have a lot of interactions with African-Americans. It was not the same upbringing I would have had had I been in a Northern suburb where I would have been more separated from African Americans. I had a life very much influenced by individuals — who I cared a lot about — from that community.

DUBNER: I assume that was a substantial influence in your becoming a scholar who’s written about the Civil War, but also has written particularly about slavery. Also, coming from an old, prominent Southern family as you do, I’m just curious whether your ancestors owned slaves?

FAUST: I’m sure they did. My mother was from New Jersey and New England roots. But my father grew up in Virginia. His family, before that, came from Tennessee and North Carolina. Around the time of the Civil War, some of his family in North Carolina and some of them in Tennessee would have been slave owners, yes.

DUBNER: You went to an all-female prep school and then an all-female college, Bryn Mawr, and wound up in the Harvard orbit by taking over the Radcliffe Institute for Advanced Study, formerly Radcliffe College, which was the all-female sister college of Harvard. Considering all that you’ve accomplished, in scholarship and administration and beyond, does this, in your mind, make any argument about the value of a single sex education?

FAUST: Certainly it was critical for me. If I had been at Harvard College, at Radcliffe College as a student during the years of my college education, which was 1964-1968, I would not have seen powerful women professors. There were during some of that time zero tenured women professors in Arts and Sciences at Harvard, or one, perhaps, by the time I would have graduated. I wouldn’t have been allowed in the undergraduate library until the spring of my junior year. It was reserved for men. At Bryn Mawr College, we ran the world. It was a much smaller world. It was a much less influential world. But I had many female role models, powerful women around me. I had no reason to doubt what was possible for a woman until I was cast forth on the world and began to get a more realistic view of what that world was like.

You could argue it two ways: you could say, while I was at Bryn Mawr I was able to build up [a] certain capacity and confidence that then were challenged and tested when I saw a more realistic portrait of the world as a whole. Or you could say that had I been at Harvard or at Radcliffe, I might have had to build up those awarenesses earlier on. But on balance, I was lucky to have a time to become educated in an environment where I was valued in the way that women were at Bryn Mawr College.

DUBNER: You have accomplished so very much in your life. You have three brothers. I’m curious if you’ve ever thought what you would have accomplished or how you might have accomplished differently if you’d been born the fourth son in that family instead of the only daughter?

FAUST: We actually talk a lot about this as siblings and what explains our different routes in life. Partly I was driven to do what I have to make up for being a girl. That I was not given assumed and natural place in the hierarchy, I had to earn it. That’s one thing I often think. I also think about my grandmothers and their image of familial power that maybe translated naturally in a changed era, into [a] more public expression of capacity and power. It’s a little bit of a joke in our family about the seeming power of men, but the underlying force of everyone being terrified of my grandmother, so how to work that out, I’ll leave to others, but there’s some speculation about it.

[MUSIC: Travis Geer, “Savannah” (from Other Musings)]

Coming up after the break: did President Faust, the first female president in Harvard’s very long history, consider herself a token female appointment?

FAUST: There’s no asterisk next to my name saying, “She’s just the woman president of Harvard.”

Also, why Harvard’s $30-plus-billion endowment is kinda, sorta, maybe not as massive as it seems:

FAUST: If we look at endowment per student, Yale actually has more endowment per student than Harvard.

And you know who doesn’t have an endowment? Freakonomics Radio. Hard to believe, but true. And our producing partner, WNYC, relies on listener support. Right now there’s a listener challenge going on. If 500 people became sustaining members of WNYC by June 30th, the Tow Foundation will kick in an extra $25,000. So please click here or text the word “freak” to 698-66. If you’d prefer, you could send a note to President Faust at Harvard, ask her to redirect a stray billion or two of her endowment – but it might be easier to just do our thing. And thanks.

*      *      *

[MUSIC: Travis Geer, “Underground Market” (from Amish Mafia)]

We’re talking with Harvard president Drew Gilpin Faust, the former pain-in-the-neck kid from rural Virginia who, before getting into university administration, was a well-regarded scholar of the Civil War South:

DUBNER: I assume, and maybe it’s a wrong assumption, you no longer have the time at all to research and write, which is what you’ve been doing for many years. Correct?

FAUST: I don’t have time to do new, archival research, which is extraordinarily time-consuming because it’s something of a treasure hunt. You have to be willing to waste a lot of time in a sense looking for things in order to find the ones that really matter. But I have been able at least to have some opportunity to write and think about history based on work that I’ve done in the past. I had a book that came out just after I became president on death and the Civil War and it came out just as we were beginning to observe the 150th anniversary of the Civil War. I’ve spoken about the book and travelled around to battlefields and it got made into a PBS film. I followed the film around, spoke about that and have written some about issues having to do with the Civil War at this time of its anniversary. I’ve still got a hand in there.

DUBNER: Let me ask you one question about that book, Republic of Suffering. You write about how the Civil War changed the way Americans thought about death. In part because of the sheer scale of death, along with many other elements. You write that more than 600,000 soldiers alone died, which at this point would be the equivalent of six million people in today’s population. I’m just curious, how did you think this huge wave of death and the way that that death happened — not in the family home, not surrounded by friends, not with the religious attachments that were traditionally a part of death — influenced our national character, if you can say?

FAUST: It did so in a couple of ways. One is that the brutality of Civil War death coming to so many young people — whose deaths seemed unnatural in the usual process of life and aging — made the Victorian romanticization of death almost impossible. It was hard to think about death in a benevolent way. It was hard, in some instances, to think about what kind of God would allow such slaughter. People were really knocked back on their heels in terms of the assumptions about the world in which they lived, how it operated and what their expectation should be. That was part of it.

Another part of it was that these deaths were undertaken on behalf of the country. What was the relationship of the government to these losses? What responsibility did the government have in face of military deaths? What grew out of that was a real change in federal policy that now seems so second nature to us: that the government would have responsibility for burying the dead, for finding the dead, for identifying the missing. The national cemetery system was established at that time as well as the Pension Bureau and other kinds of instruments of responsibility to soldiers who had fought and to those who had died. That, of course, is a taken for granted aspect of our 21st century lives.

[MUSIC: Jonathan Geer, “This Is my Father’s World” (from J Geer — Collection 4)]

DUBNER: You took over the presidency of Harvard not too long after the dismissal of Larry Summers, the economist who rubbed some people very much the wrong way, evidenced by his public discussion of the difference between men and women in the sciences. Shortly after his dismissal, you became the first female president in Harvard’s 350-plus-year history. Forgive me if I’m asking questions that exacerbate this if the answer is yes — but did you feel in any way a token female appointment? I’m just curious whether you’ve been made to feel a feminist symbol or symbol of feminism when in fact you’re just Drew Gilpin Faust?

FAUST: I didn’t feel that I was a token appointment because I didn’t think that the Harvard Corporation would make token appointments. They’re not that kind of group. I felt that I had been chosen on the merits. But there were plenty of people, outside of that realm, who’ve accused me of being a token appointment or alleged that I was a token appointment. I found myself — at the announcement of my presidency in February of 2007 — asked a question from the audience about how I felt as the first woman president of Harvard. Without having prepared it or even thought it through, I shot back and said, “I’m not the woman president of Harvard. I’m the president of Harvard.” That was an important statement for me but I also realized increasingly over the weeks that followed that the attention to the fact that I was a woman was not just about, “She’s just a token.”

It was also letters from little  girls all over the world, from their parents saying, “Now I know my daughter can do anything.” I realized that I had to inhabit that space as the woman president of Harvard, because it did matter. It didn’t mean that I was someone who’d been appointed the way that somebody is given an asterisk when they hit the largest number of home runs in an extended season. There’s no asterisk next to my name saying, “She’s just the woman president of Harvard.” But at the same time, I am the woman president of Harvard. That sends a message, I hope, to anybody who hopes for the best and the most for young women.

DUBNER: When you came aboard, what were your biggest challenges as Harvard president? And then give me an update and tell me where things stand now.

FAUST: When I became president, it was after an interim year where Derek Bok had come back to serve as president. Things had been in suspended animation a little bit. How did we get back to normal? How did we enable everybody to get back, do their work and settle into the routines of excellent teaching and scholarship? Calming things down was a big part of that first year. I had to replace a lot of deans. There had been deans whose terms had ended. I did a lot of searches and finding people to put in place in a variety of jobs. I care a lot about teaching, always have. That’s been a high agenda item: how can we attend to the issues in the college? All of those things were on my plate. Harvard’s increasing international profile. But then, one year in, the financial crisis …  

DUBNER: Had a little recession to deal with, yeah.

FAUST: Yeah. We lost 27 percent of our endowment and our endowment funds 35 percent of our operating budget. What that created was a crisis in which we had to look hard at everything we did and ask, “Why do we do it that way? Do we want to keep doing it that way? And how can this be an opportunity for change and innovation in this institution to fit it for its next 375 years?” As a result of that, it was a very difficult time. We had to make a lot of hard choices. But I also had a wind at my back for change in areas varying from the governance structure of the university, which we changed for the first time since 1650, to a whole variety of ways of trying to do our work better and move Harvard forward.

DUBNER: Now, we should say, as much as Harvard lost in its endowment during that crash and the recession, Harvard still has by far the largest endowment on Earth. North of $30 billion, currently. Please correct me if I’m wrong.

FAUST: That’s right, that’s right.

DUBNER: North of 30, which is more than $10 billion more than number two, Yale. I totally appreciate the fact that you say when the endowment loses a huge chunk of its value there’s a lot of change that needs to be undertaken, or at least considered. But can you talk for a moment about what an endowment — in your view and obviously this is not your decision to make — really should be used for, should fund, should be considered as. Because it’s obviously much more than a nest egg.

FAUST: I worry a lot that there’s not a broad understanding of what endowments are, so thank you for this opportunity to say a little bit about it. First of all, an endowment is made up of gifts given to the university over time that are legally bound to certain uses. Some of the endowment is restricted to funding a French professor or funding student aid. That means that we have to use the income from that money for that particular purpose. Also, at the same time, preserve the corpus of the gift so it can continue to fund that in perpetuity. Now let me say one other thing about comparing Harvard’s endowment to Yale’s or Princeton’s or anyone else’s. It depends what a University does. Harvard is much, much bigger than Yale. If we look at endowment per student, Yale actually has more endowment per student than Harvard.

If you think about some of the things that are funded by Harvard’s endowment, things like our art museums, things like a Renaissance research center in Italy, we can’t take that money out of that. It can only be used for that. But it gets counted in that figure of Harvard’s total endowment that you described. A major thing we use our endowment for is student aid. We are able to fund in our undergraduate college student aid for 60 percent of our undergraduates because of the very generous gifts to financial aid that have been given over the years.

DUBNER: There’s a lot of evidence — particularly in the realm of economics — that the R.O.I., the return on investment, on education is very strong. In fact, one could argue that education is maybe the single best investment that any human could ever make in oneself or in one family. But increasingly there’s been a lot of suspicion and, indeed, some evidence that the R.O.I. is either declining, simply not as strong as believed, and/ or that too many people have been directed toward certain colleges when in fact that perhaps might not be best for their outcome. How do you look at that question? Please be as empirical as you can in making the argument that education is indeed the great investment that universities argue it is.

FAUST: What we’ve seen in the past decade or two is that knowledge is increasingly the currency of the world in which we operate. The differential between what a high school graduate can make over a lifetime and what a college graduate makes over a lifetime has increased. We also saw during the recession that unemployment was much lower among college graduates than it was under those who did have college degrees. This is a time when learning and knowledge is increasingly, not decreasingly, important. This is something that we need to recognize as a society. Harvard believes very strongly in this and believes in giving opportunity to students from the widest possible range of backgrounds and financial circumstances. But we need to think about this holistically as a system of higher education across the United States.

The importance of the publics, who have been significantly defunded. In about the 1990s, one in four dollars of support for the publics came from families. The rest came from the state. This has reversed. When you see the cost of education in the publics has not changed, but the price has changed because they have been defunded by their state governments. This is a disinvestment that our nation is making in the most important investment it can make in its future. We need to make sure that places like Harvard can thrive. But we also need to make sure that the publics can thrive, the system of community colleges, as well for students who are seeking either a leg up into a four-year college education or, perhaps, a terminal two-year degree that will give them the skills to operate within the modern technologically advanced workforce.

[MUSIC: Paul Avgerinos, “Big Country 12” (from Orchestral Drama Vol. 1 Strings Fanfares Transitions)]

[MUSIC: Travis Geer, “Illuminating” (from Cinema Spectaculaire)]

It was time now to move on to a few of our FREAK-quently Asked Questions, the same questions we’ve asked of people like Aziz Ansari …

Aziz ANSARI: I read the Internet so much I feel like I’m on page a million of the worst book ever. And I just won’t stop reading it. For some reason it’s so addictive. But it is such a horrible book.

And former Microsoft CEO Steve Ballmer …

Steve BALLMER: I am afraid of falling down. I have been ever since I was a kid. I still go down the hill sideways sometimes!

DUBNER: Let me ask you this, President Faust: what would you consider the single best investment you’ve ever made — it might be financial, emotional, educational, whatever —in getting to where you are today? And [by] getting where you are today, I mean not necessarily as just a professional, but as a human.

FAUST: I would say definitely my education. Going to Concord Academy was life-changing for me, as I described earlier, put me in a different environment and gave me aspirations and possibilities that had not been available before.

DUBNER: What is your strategy for when you need to bring a bottle of wine to someone’s home for dinner. How much do you spend on it and/or do you regift?

FAUST: I don’t think it through that coherently. I go, find a bottle of wine and grab it…

DUBNER: What do you spend? Twenty bucks roughly? Fifty?

FAUST: Maybe more. Maybe 40, 50. There is a vineyard in California called Faust. I have a good time giving people bottles of Faust. You can look up what a bottle of Faust costs these days to answer your question.

[MUSIC: Cloud Nine Audio, “Prelude in C” (from Classical Chillout Piano)]

I did look it up. A bottle of 2012 Faust Napa Valley Cabernet Sauvignon goes for around $45.

DUBNER: What is the one story about you that your family always tells?

FAUST: Well, they don’t tell it in front of me so I don’t know.

DUBNER: What is something, President Faust, that you believed for a long time to be true and then decided that you’d either been wrong or otherwise changed you mind?

FAUST: Wow. I don’t know how to answer that.

DUBNER: Is there any either political, economic, educational issue or even dogma that you really subscribed to, but then came to thinking, “You know what?” Maybe it was something that over time…I don’t mean it needs to be a road to Damascus conversion moment, but something that you really reversed field. Or you may be just an extraordinarily intellectually consistent person.

FAUST: No, I doubt that’s the case. I’m a person who doesn’t look back a lot. I’m always looking forward. So I don’t identify and say, “Whoops, I changed my mind there.” But I need to think about this, because I don’t want to come to see myself as somebody who never can change. You’ve asked an important question that I will ponder. But I can’t think of an answer.

DUBNER: It’s a deal. Okay. If you had a time machine, when would you travel to, why and what would you want to do there?

FAUST: I would like to go to the period that I’ve written about and see, “Did I get it right? Did I get it wrong?” Partly because one of my approaches to history has been very much through the lens of anthropology, of trying to understand the culture and the broader set, not just to chronicle events, but to really understand how people saw their world. If I could time travel to the early 19th century or to the Civil War era, I’d get a sense of whether I’d gotten it right. That would be intriguing to me.

DUBNER: I know you’ve written that history is inherently tricky in that we rely so often now and then on individual stories. Yet individual stories can be nothing more that anecdotes that might be anomalous. The job of a historian is to square those stories with the aggregate. I’m curious how you would apply that to the modern world these days. You’re one person, I’m one person, everybody listening here is one person with their own sets of opinions, biases and so on. Yet we need to think through our own prism, but toward the greater population. Do you think that problem — that you identified as an historian — is a big problem in public civic life today and why there’s so much …

FAUST: That’s such an intriguing question, which suggests its own answer, I believe. Part of why I love history is it takes it outside ourselves and, at its best, enables us to look through other people’s eyes. That enables us to understand what’s contingent about our choices and our existence. We need to do that in our own time as well. We need to bridge beyond ourselves and take advantage of stories to serve as a road to other people, as a pathway to being able to look at the world through their eyes and to understand where they’re coming from, why they might differ with us on matters of policies or practice and have the stories empower us to be more than simply locked within our own selves. That seems to me an important part of what stories can do for us now.

[MUSIC: Nate Bosley, “The Day is Coming” (from Bad Woman)]

DUBNER: Thank you very much for your time. I so enjoyed speaking with you. And congratulations on all you’ve done.

FAUST: Thank you.

DUBNER: Okay, be well.

FAUST: Thank you so much.

Coming up next time on Freakonomics Radio: in 1960, just five percent of births in the U.S. were to unmarried mothers. Fast forward now – to 2014.

KEARNEY: In 2014, over 40 percent of births in the U.S. were unmarried mothers.

That is not good news.

KEARNEY: The kids who are being born to less-educated, single moms, they are falling farther and farther behind.

But what if the economy got a huge positive jolt? That would definitely help turn things around, wouldn’t it? Wouldn’t it?

KEARNEY: In fact the data showed the opposite.

Unmarried births and the fracking boom. That’s next time, on Freakonomics Radio.

Freakonomics Radio is produced by WNYC Studios and Dubner Productions. This episode was produced by Arwa Gunja with help from Matt Fidler and Cameron Drews. Our staff also includes Shelley Lewis, Christopher Werth, Merritt Jacob, Greg Rosalsky, Stephanie Tam, Eliza Lambert, Alison Hockenberry, Emma Morgenstern, Harry Huggins, and Brian Gutierrez. You can subscribe to Freakonomics Radio on Apple Podcasts, Stitcher, or wherever you get your podcasts. You can also find us on Twitter, Facebook, or via e-mail at radio@freakonomics.com.

The post The Harvard President Will See You Now (Rebroadcast) appeared first on Freakonomics.

Suppose you’re a homeowner with a hideous master bathroom. You’d like to remodel, but you don’t see how you can afford it. According to HomeAdvisor, the average cost for that job is around $9,400, and there’s no way you can squeeze that amount out of your budget right now. Then, one day, you get a letter from your bank offering you…

What Is a Home Equity Line of Credit (HELOC) – How It Works, Pros & Cons is a post from Money Crashers.

      

USAA is a highly ranked auto insurance company that consistently shines in consumer surveys. In fact, the company earned a perfect score in the category of Overall Satisfaction from the 2016 J.D. Power U.S. Auto Insurance Claims Satisfaction Study.

The interesting thing about USAA is that it provides banking and investing services in addition to auto insurance. This could make it a good choice if you’re the type who likes to bundle services with one provider. That would make it easier to pay bills and stay organized.

Of course, simply using the auto insurance portion of what this company has to offer is perfectly fine, especially considering all they have to offer.

Who Can Use USAA Auto Insurance?

Auto insurance from USAA is only available to policyholders who are affiliated with the military. You must be an active, retired, or honorably separated member of the United States Armed Forces to qualify for a policy. This extends to veterans and candidates in commissioning programs.

In addition, spouses, former spouses, and children of USAA members are also eligible to obtain policies.

Related: Learn More About the New Military Retirement Option

The Highlights of USAA Auto Insurance

USAA offers some perks that most other companies simply can’t touch.

The company provides guaranteed renewal of your auto policy as long as you’re able to drive and meet a few simple requirements.

Customers also get a very generous policy for accident forgiveness. USAA will forgive one at-fault accident after 5 years of membership without increasing your auto insurance premiums. The one stipulation is that for some states, this feature is an optional add-on (for a fee).

In addition to a standard auto policy, you can purchase extended vehicle protection, motorcycle insurance, RV insurance, and boat insurance. Drivers who store their cars at military bases can get a 15 percent discount on their comprehensive coverage in most states.

Resource: 23 Active Duty Military ID Card Perks You Need to Know About

USAA has also earned high scores for providing excellent customer service, speedy claims, and prompt adjustment approval in a number of customer surveys.

Filing a claim with USAA is a pretty straightforward process. Customers can place calls using a special claims hotline. They can also download a mobile app that allows them to report claims, submit photos, and view a claim’s status.

How Much Does USAA Auto Insurance Cost?

USAA offers three tiers of coverage from which customers can choose: basic, standard, and expanded.

In order to get a good baseline for comparison, here are the specs I included when requesting a quote :

• 2009 Honda Civic
• 75,000 miles
• located in the Northeast
• Two drivers, ages 30-39, with clean driving records
  

Basic Coverage

When I entered the car/driver info above, I got a quote of $115 per month for Basic Coverage for both my wife and I. This includes:

• Bodily injury liability totaling $20,000 per person and $40,000 per accident
• Property damage liability totaling $10,000 per accident
• Comprehensive coverage with a $500 deductible per occurrence
• Collision coverage with a $500 deductible per occurrence
• Rental reimbursement
• Towing and labor
• Uninsured/underinsured motorist coverage
• Coverage for medical payments

The deductible and rental reimbursement are what I was looking for, so this was a pretty good option for me. This also meets the minimum required coverage for my state. However, I would like to have a bit more property and bodily injury liability coverage, so I continued on.

Want to Know Your State’s Required Liability Coverage? See a List of Each State’s Minimums Here

Standard Coverage

For just a few more dollars a month, I was offered a much higher liability limit for both property and bodily injury. This is, as mentioned, more than what my state requires by law. I prefer to hold coverage over the minimum anyway, though.

Standard Coverage for the same vehicle was quoted at $130 per month. Here’s what I’ll get in this tier:

• Bodily injury liability totaling $50,000 per person and $100,000 per accident
• Property damage liability totaling $50,000 per accident
• Comprehensive coverage with a $500 deductible per occurrence
• Collision coverage with a $500 deductible per occurrence
• Rental reimbursement
• Towing and labor
• Uninsured/underinsured motorist coverage
• Coverage for medical payments

Everything is the same — I’ll still be reimbursed for my rental car fees; I’m still covered if someone who is uninsured or underinsured hits me or my car; and, my vehicle will still be towed if needed — except that I have significantly increased my liability coverage.

Expanded Coverage

If I want even more, USAA has one more option for me.

Expanded Coverage offered increased protection for the same vehicle at a quoted price of $140 per month. Here’s what I’ll get at this tier of coverage:

• Bodily injury liability totaling $100,000 per person and $300,000 per accident
• Property damage liability totaling $100,000 per accident
• Comprehensive coverage with a $500 deductible per occurrence
• Collision coverage with a $500 deductible per occurrence
• Towing and labor
• Uninsured/underinsured motorist coverage
• Coverage for medical payments

It is easy to see after looking at quotes from USAA that the company makes it possible to double, or even triple, your amount of coverage beyond the legal minimum. The added premium essentially boils down to a few extra cents per day.

Learn More: 15 Auto Insurance Discounts You May Be Missing

Is USAA a Good Choice?

USAA should definitely be at the top of your list if your military status (or the military status of a spouse or parent) qualifies you to obtain a policy. This company delivers the total package when it comes to reasonable rates and great service. It consistently earns awards and high rankings from enterprises like J.D. Power and Consumer Reports, and has a great reputation in the industry.

USAA is especially convenient if you’re looking to bundle your auto insurance together with other services, such as checking and savings accounts, property coverage, or loans. To learn more or get a quote, visit their website at USAA.com.

The post USAA Auto Insurance Review: Does It Live Up to Its Perfect Score? appeared first on The Dough Roller.