Mar 5, 2013
By Sam Flynn
Two College of Business student organizations, CONNECT and OU’s Student Equity Management Group (OUSEMG), recently hosted the first 401(K)nowledge financial literacy conference.
The event, held in the Walter Rotunda, was open to all OHIO students. Among the participants was Courtney Click, a sophomore majoring in nursing.
“Growing up without financial security or knowledge led me to seek it out,” she said.
The four-hour event was divided into two panels dealing with financial issues facing college students and recent graduates entering the marketplace, such as purchasing houses and cars and saving for retirement. It also included a complimentary lunch with the panelists.
The first panel focused on credit cards, student loans and financing large purchases. Panelists were Anthony Gargano, BBA ’12, an associate of Institutional Services with Sequa Financial; Mike Stethem, BBA ’12, an energy investment banker with KeyCorp; Rory Driscoll, an energy investment banker at American Federal Savings Bank.
According to the panel, buying a home may now be a better choice than renting, due to low interest rates. It definitely is more complex than renting, Driscoll said.
“Be prepared for the kind of things required, such as all relevant tax forms, latest statements for checking, saving, and investment accounts, letters of explanation for any blemishes on a credit score, two previous pay stubs,” he said. “And that’s just to start.”
In addition to the amount of the loan and the condition of the house, Driscoll advised attendees to consider potential property taxes.
Building a good credit score while still in college is hugely vital to potential future loans, the panel noted. Banks usually prefer a five-year credit history to insure their loans. An easy way to built credit is to get a low-rate credit card and paying it off monthly. Instead of paying one month’s rent of $500 with a debit card, students could instead pay with the credit card and then pay the credit card bill immediately. Using other bills to supplement a credit history is another way to build credit.
Gargano counseled attendees to focus on paying nonsubsidized student loans after the six-month grace period ends. The payments are tax deductible.
The second panel focused on personal investing, retirement and insurance. Panelists were Cameron Shank, BBA ’12, a financial representative with Northwestern Mutual; Jake Walters, BBA ’12, a retirement investment banker with Charles Schwab; Michael Carpenter, BBA ’83, a certified financial planner who owns Carpenter & Associates in Athens; and Tim Mackey, founder of Cincinnati’s Mackey Financial Group.
The four gave advice on retirement savings and why investing that money is important. Although Shenk and Walters said those wishing to get a head start could set up an individual retirement account, the panel endorsed the 401(k) as the best way available to build a retirement fund. A 401(k) is an employer-provided retirement fund; employee contributions are deducted before taxes and employers may match their investments.
Mackey likened saving to fitting golf balls and sand into a jar. If you put the sand (spend) in first, the golf balls (savings) will not fit. But reverse the order, and the sand will go around the golf balls and the jar can be shut.
Nykki Chihil, a senior studying finance and economics and current president of CONNECT, was extremely proud of the event and its turnout. The group conceived the idea in April 2012 and began planning the event last November. She is already looking forward to next year and improvements that can be made.
“I feel really good about the event and I’m already inspired for changes for next to make it bigger and better,” she said.