Saturday, July 11, 2020

Is Google Making Us Stupid?

Is Google Making Us Stupid?Are we getting so used to 'Google' ads, news articles, and other Internet content that we have stopped understanding what the words mean? Is it because we can't read the English language anymore? Or is it because of what the general audience associates with these words?I am sure we all know that Google and other companies do not put too much emphasis on high school grammar. They use their systems to find very specific search phrases. Then they deliver these topics to the searcher using the most appropriate language in their search terms. Why should we expect that the same process will work in this case?If you have ever gotten an essay sample or a question answered on an Internet forum and the content of the article was different from what was said in the blog post, you are probably at least partially aware of the fact that the same language in the articles can make us both smarter and dumb. We hear one part of the word, but it applies to a whole different t opic altogether.You see, with the new way of publishing we have to be prepared for something like this. The Internet is different and with every new trend comes a new way of doing things. If you are just being lazy or reading the news you will always hear something that sounds like 'Google', but if you are reading an essay sample, you will think that the words mean something else entirely.It has also been said that the same words in an essay will require the same grammar, but if you are thinking about English as you might in a newspaper article, you will never be able to figure out what the sentences mean. This is one of the reasons why people get confused when they read in a newspaper.I have seen people tell me they want to take more English Literature classes, but the best way to learn grammar is by reading everything that you can. If you have a computer that is connected to the Internet, then go ahead and get an English course that is free.In conclusion, we do not need to be so i gnorant of what 'Google' means, and the essays samples and questions on forums will never convey the correct meaning. This is just one of the many ways that you are now faced with an increased knowledge of the Internet, or as my friend called it 'Being Googleed'.

Thursday, July 2, 2020

Should You Open an Ugma/utma 529

What is an UGMA/UTMA 529? It refers to account in a 529 plan funded with money already owned by your minor child. Because minors generally cannot directly own an investment or bank account, an adult custodian must manage and use the funds for the benefit of the minor child as prescribed under the state's Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA). Another name frequently used for a 529 account opened with UGMA/UTMA money is "custodial 529 account." Nearly all 529 savings plans have special procedures to accommodate UGMA/UTMA 529s. For example, the plan administrator will not permit changes in the beneficiary designation prior to the current beneficiary's 18th or 21st birthday (depending on the state). And when the current beneficiary reaches the age of legal ownership, he or she will have the right to contact the 529 plan administrator and take direct ownership and control of the 529 account. I'd like to put my son's UTMA money into a 529 plan without telling the plan where the money is coming from. That way my son will still be the beneficiary, but I'll be the owner and can control the account without worrying about what happens when my son turns 18. Is there anything wrong with this approach? Establishing the 529 account in your own name as owner does not change the custodian's legal obligation under the UTMA to use the funds for the benefit of that particular child. If you were to change the beneficiary and use the 529 money for a different child, or deny your son's right to take direct ownership at the age of 18 (if that is the legal age in your state), you are probably in violation of the UTMA. An attorney can help explain this to you. If you are worried about your son making poor decisions because of this money, you might better look for ways to "spend down" the account while he is still a minor. If you were to use the UGMA/UTMA account to pay for expenses incurred for his benefit, instead of paying for those expenses yourself, you will have more money to fund a 529 account under your own ownership. I've heard that UGMA/UTMA 529s have been granted favored status under the financial aid laws? Is this true? Yes, it is true. Beginning with the 2006-07 school yearï ¿ ½but ending with the 2008-09 school yearï ¿ ½your child's UGMA/UTMA 529 does not have to be reported on the federal financial aid application (FAFSA). The same exception applies if the UGMA/UTMA has terminated and your child (the student) owns the 529 account directly. But note: this special rule applies only if your child files the FAFSA as your dependent, which is the case for the vast majority of undergraduates. The treatment of an UGMA/UTMA 529 changes beginning with the 2009-10 school year, but is still beneficial. The account is reportable on the FAFSA, but not as a student asset assessed at the usual 20% student rate. Instead, it is reported as a parental asset at the lower 5.64% maximum parental rate. The fact that an asset owned by one party (in this case the student) is treated as if it is owned by another (the parents) is highly unusual in the financial aid laws. Do we improve our child's financial-aid prospects by moving his existing UGMA/UTMA investments into an UGMA/UTMA 529? Quite possibly yes. Let's assume your child's UGMA/UTMA account has $50,000 worth of mutual funds on the day he or she files the FAFSA. Your Expected Family Contribution (EFC) will include 20% of that value, or $10,000. If the mutual funds were liquidated and the cash contributed to an UGMA/UTMA 529 prior to submitting the FAFSA, your EFC will include at most 5.64% of that value, or $2,820. Your child's "financial need" increases by at least $7,180 for the current school year. But there are some important caveats. You have to consider the consequences of liquidating the mutual funds and triggering capital gains. Any gains will not only be reportable on your child's income tax returns, but they will also be included in base-year income on the following year's FAFSA, which can cause a decrease in aid eligibility. Also remember that we are talking here only about federal financial aid. For school-based aid (grants, scholarships, or tuition discounts from the school's own funds), you are not likely to find the same advantage by moving UGMA/UTMA money into a 529 plan. How about making contributions of my own money to my child's UGMA/UTMA 529? Will that help? No. Beginning with the 2009-10 school year, a 529 account is treated as your parental asset whether owned by you, by your child through an UGMA/UTMA, or by your child directly. Most parents would prefer to retain control by contributing to their own 529 accounts. But what about the 529 plans I have for my younger children? Will I have to report them on my older child's FAFSA? Great question. The federal government is telling us that you must include as parental assets the 529 accounts you own for anyone else, because you have full ownership and control of those accounts. It's unfortunate when the funds set aside for a younger child's college education negatively impact the financial-aid eligibility of the older child trying to pay for college. In this case, you may want to seriously consider setting up the 529 accounts for your younger children as UGMA/UTMA 529s, recognizing the additional restrictions and ultimate loss of control. If you have already established the accounts as parent-owned 529s, you may find that your 529 plan administrator will not accept your request for a change in ownership. Avoid taking any action that will be treated as a liquidation of your existing 529 account, leading to tax and penalty on the growth. Okay, let's forget about financial aid for a moment. Is there an income tax savings from moving my child's UGMA/UTMA money into an UGMA/UTMA 529? There could be substantial tax savings, assuming your child would otherwise be paying income tax on taxable interest, dividends, or capital gains. The 529 account will grow tax-deferred, and come out tax-free to pay for college. But wait, it's not quite that simple. Your dependent child can report as much as $950 in investment income in 2009 without being subject to federal income tax. If your college savings never threw off more than $950 in annual income, you might be better off keeping the UGMA/UTMA invested in mutual funds and other taxable investments. (A 529 plan has the disadvantage of a small layer of additional fees, as well as the risk of future tax and penalty if the 529 account is used for something other than college.) You also have to consider the tax consequences of moving the money from the taxable investment into the 529 plan. Triggering any gains this year may cost more in taxes when compared to spreading out the gains over a number of years. If the existing UGMA/UTMA taxable investments are throwing off more than $950 in annual income, the analysis turns in favor of the 529 option. Although the income between $950 and $1,900 remains taxable at the child's low tax bracket, if it rises above that level it may become taxable at the parents' marginal tax bracket. This rate bump is known as the "Kiddie Tax" and beginning in 2008 it applies to the following three groups of taxpayers: (1) children through the age of 17; (2) 18-year olds who do not earn more than one-half of their own support; and (3) 19- to 23-year-old full-time college students who do not earn more than one-half of their own support. Because of the control issues, the Kiddie Tax, and the financial-aid consequences, most families looking to invest substantial dollars for college should be looking toward 529 plans and away from UGMA/UTMA accounts. Joe Hurley is the founder of Savingforcollege.com LLC, and a certified public accountant. What is an UGMA/UTMA 529? It refers to account in a 529 plan funded with money already owned by your minor child. Because minors generally cannot directly own an investment or bank account, an adult custodian must manage and use the funds for the benefit of the minor child as prescribed under the state's Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA). Another name frequently used for a 529 account opened with UGMA/UTMA money is "custodial 529 account." Nearly all 529 savings plans have special procedures to accommodate UGMA/UTMA 529s. For example, the plan administrator will not permit changes in the beneficiary designation prior to the current beneficiary's 18th or 21st birthday (depending on the state). And when the current beneficiary reaches the age of legal ownership, he or she will have the right to contact the 529 plan administrator and take direct ownership and control of the 529 account. I'd like to put my son's UTMA money into a 529 plan without telling the plan where the money is coming from. That way my son will still be the beneficiary, but I'll be the owner and can control the account without worrying about what happens when my son turns 18. Is there anything wrong with this approach? Establishing the 529 account in your own name as owner does not change the custodian's legal obligation under the UTMA to use the funds for the benefit of that particular child. If you were to change the beneficiary and use the 529 money for a different child, or deny your son's right to take direct ownership at the age of 18 (if that is the legal age in your state), you are probably in violation of the UTMA. An attorney can help explain this to you. If you are worried about your son making poor decisions because of this money, you might better look for ways to "spend down" the account while he is still a minor. If you were to use the UGMA/UTMA account to pay for expenses incurred for his benefit, instead of paying for those expenses yourself, you will have more money to fund a 529 account under your own ownership. I've heard that UGMA/UTMA 529s have been granted favored status under the financial aid laws? Is this true? Yes, it is true. Beginning with the 2006-07 school yearï ¿ ½but ending with the 2008-09 school yearï ¿ ½your child's UGMA/UTMA 529 does not have to be reported on the federal financial aid application (FAFSA). The same exception applies if the UGMA/UTMA has terminated and your child (the student) owns the 529 account directly. But note: this special rule applies only if your child files the FAFSA as your dependent, which is the case for the vast majority of undergraduates. The treatment of an UGMA/UTMA 529 changes beginning with the 2009-10 school year, but is still beneficial. The account is reportable on the FAFSA, but not as a student asset assessed at the usual 20% student rate. Instead, it is reported as a parental asset at the lower 5.64% maximum parental rate. The fact that an asset owned by one party (in this case the student) is treated as if it is owned by another (the parents) is highly unusual in the financial aid laws. Do we improve our child's financial-aid prospects by moving his existing UGMA/UTMA investments into an UGMA/UTMA 529? Quite possibly yes. Let's assume your child's UGMA/UTMA account has $50,000 worth of mutual funds on the day he or she files the FAFSA. Your Expected Family Contribution (EFC) will include 20% of that value, or $10,000. If the mutual funds were liquidated and the cash contributed to an UGMA/UTMA 529 prior to submitting the FAFSA, your EFC will include at most 5.64% of that value, or $2,820. Your child's "financial need" increases by at least $7,180 for the current school year. But there are some important caveats. You have to consider the consequences of liquidating the mutual funds and triggering capital gains. Any gains will not only be reportable on your child's income tax returns, but they will also be included in base-year income on the following year's FAFSA, which can cause a decrease in aid eligibility. Also remember that we are talking here only about federal financial aid. For school-based aid (grants, scholarships, or tuition discounts from the school's own funds), you are not likely to find the same advantage by moving UGMA/UTMA money into a 529 plan. How about making contributions of my own money to my child's UGMA/UTMA 529? Will that help? No. Beginning with the 2009-10 school year, a 529 account is treated as your parental asset whether owned by you, by your child through an UGMA/UTMA, or by your child directly. Most parents would prefer to retain control by contributing to their own 529 accounts. But what about the 529 plans I have for my younger children? Will I have to report them on my older child's FAFSA? Great question. The federal government is telling us that you must include as parental assets the 529 accounts you own for anyone else, because you have full ownership and control of those accounts. It's unfortunate when the funds set aside for a younger child's college education negatively impact the financial-aid eligibility of the older child trying to pay for college. In this case, you may want to seriously consider setting up the 529 accounts for your younger children as UGMA/UTMA 529s, recognizing the additional restrictions and ultimate loss of control. If you have already established the accounts as parent-owned 529s, you may find that your 529 plan administrator will not accept your request for a change in ownership. Avoid taking any action that will be treated as a liquidation of your existing 529 account, leading to tax and penalty on the growth. Okay, let's forget about financial aid for a moment. Is there an income tax savings from moving my child's UGMA/UTMA money into an UGMA/UTMA 529? There could be substantial tax savings, assuming your child would otherwise be paying income tax on taxable interest, dividends, or capital gains. The 529 account will grow tax-deferred, and come out tax-free to pay for college. But wait, it's not quite that simple. Your dependent child can report as much as $950 in investment income in 2009 without being subject to federal income tax. If your college savings never threw off more than $950 in annual income, you might be better off keeping the UGMA/UTMA invested in mutual funds and other taxable investments. (A 529 plan has the disadvantage of a small layer of additional fees, as well as the risk of future tax and penalty if the 529 account is used for something other than college.) You also have to consider the tax consequences of moving the money from the taxable investment into the 529 plan. Triggering any gains this year may cost more in taxes when compared to spreading out the gains over a number of years. If the existing UGMA/UTMA taxable investments are throwing off more than $950 in annual income, the analysis turns in favor of the 529 option. Although the income between $950 and $1,900 remains taxable at the child's low tax bracket, if it rises above that level it may become taxable at the parents' marginal tax bracket. This rate bump is known as the "Kiddie Tax" and beginning in 2008 it applies to the following three groups of taxpayers: (1) children through the age of 17; (2) 18-year olds who do not earn more than one-half of their own support; and (3) 19- to 23-year-old full-time college students who do not earn more than one-half of their own support. Because of the control issues, the Kiddie Tax, and the financial-aid consequences, most families looking to invest substantial dollars for college should be looking toward 529 plans and away from UGMA/UTMA accounts. Joe Hurley is the founder of Savingforcollege.com LLC, and a certified public accountant. Should You Open an Ugma/utma 529 What is an UGMA/UTMA 529? It refers to account in a 529 plan funded with money already owned by your minor child. Because minors generally cannot directly own an investment or bank account, an adult custodian must manage and use the funds for the benefit of the minor child as prescribed under the state's Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA). Another name frequently used for a 529 account opened with UGMA/UTMA money is "custodial 529 account." Nearly all 529 savings plans have special procedures to accommodate UGMA/UTMA 529s. For example, the plan administrator will not permit changes in the beneficiary designation prior to the current beneficiary's 18th or 21st birthday (depending on the state). And when the current beneficiary reaches the age of legal ownership, he or she will have the right to contact the 529 plan administrator and take direct ownership and control of the 529 account. I'd like to put my son's UTMA money into a 529 plan without telling the plan where the money is coming from. That way my son will still be the beneficiary, but I'll be the owner and can control the account without worrying about what happens when my son turns 18. Is there anything wrong with this approach? Establishing the 529 account in your own name as owner does not change the custodian's legal obligation under the UTMA to use the funds for the benefit of that particular child. If you were to change the beneficiary and use the 529 money for a different child, or deny your son's right to take direct ownership at the age of 18 (if that is the legal age in your state), you are probably in violation of the UTMA. An attorney can help explain this to you. If you are worried about your son making poor decisions because of this money, you might better look for ways to "spend down" the account while he is still a minor. If you were to use the UGMA/UTMA account to pay for expenses incurred for his benefit, instead of paying for those expenses yourself, you will have more money to fund a 529 account under your own ownership. I've heard that UGMA/UTMA 529s have been granted favored status under the financial aid laws? Is this true? Yes, it is true. Beginning with the 2006-07 school yearï ¿ ½but ending with the 2008-09 school yearï ¿ ½your child's UGMA/UTMA 529 does not have to be reported on the federal financial aid application (FAFSA). The same exception applies if the UGMA/UTMA has terminated and your child (the student) owns the 529 account directly. But note: this special rule applies only if your child files the FAFSA as your dependent, which is the case for the vast majority of undergraduates. The treatment of an UGMA/UTMA 529 changes beginning with the 2009-10 school year, but is still beneficial. The account is reportable on the FAFSA, but not as a student asset assessed at the usual 20% student rate. Instead, it is reported as a parental asset at the lower 5.64% maximum parental rate. The fact that an asset owned by one party (in this case the student) is treated as if it is owned by another (the parents) is highly unusual in the financial aid laws. Do we improve our child's financial-aid prospects by moving his existing UGMA/UTMA investments into an UGMA/UTMA 529? Quite possibly yes. Let's assume your child's UGMA/UTMA account has $50,000 worth of mutual funds on the day he or she files the FAFSA. Your Expected Family Contribution (EFC) will include 20% of that value, or $10,000. If the mutual funds were liquidated and the cash contributed to an UGMA/UTMA 529 prior to submitting the FAFSA, your EFC will include at most 5.64% of that value, or $2,820. Your child's "financial need" increases by at least $7,180 for the current school year. But there are some important caveats. You have to consider the consequences of liquidating the mutual funds and triggering capital gains. Any gains will not only be reportable on your child's income tax returns, but they will also be included in base-year income on the following year's FAFSA, which can cause a decrease in aid eligibility. Also remember that we are talking here only about federal financial aid. For school-based aid (grants, scholarships, or tuition discounts from the school's own funds), you are not likely to find the same advantage by moving UGMA/UTMA money into a 529 plan. How about making contributions of my own money to my child's UGMA/UTMA 529? Will that help? No. Beginning with the 2009-10 school year, a 529 account is treated as your parental asset whether owned by you, by your child through an UGMA/UTMA, or by your child directly. Most parents would prefer to retain control by contributing to their own 529 accounts. But what about the 529 plans I have for my younger children? Will I have to report them on my older child's FAFSA? Great question. The federal government is telling us that you must include as parental assets the 529 accounts you own for anyone else, because you have full ownership and control of those accounts. It's unfortunate when the funds set aside for a younger child's college education negatively impact the financial-aid eligibility of the older child trying to pay for college. In this case, you may want to seriously consider setting up the 529 accounts for your younger children as UGMA/UTMA 529s, recognizing the additional restrictions and ultimate loss of control. If you have already established the accounts as parent-owned 529s, you may find that your 529 plan administrator will not accept your request for a change in ownership. Avoid taking any action that will be treated as a liquidation of your existing 529 account, leading to tax and penalty on the growth. Okay, let's forget about financial aid for a moment. Is there an income tax savings from moving my child's UGMA/UTMA money into an UGMA/UTMA 529? There could be substantial tax savings, assuming your child would otherwise be paying income tax on taxable interest, dividends, or capital gains. The 529 account will grow tax-deferred, and come out tax-free to pay for college. But wait, it's not quite that simple. Your dependent child can report as much as $950 in investment income in 2009 without being subject to federal income tax. If your college savings never threw off more than $950 in annual income, you might be better off keeping the UGMA/UTMA invested in mutual funds and other taxable investments. (A 529 plan has the disadvantage of a small layer of additional fees, as well as the risk of future tax and penalty if the 529 account is used for something other than college.) You also have to consider the tax consequences of moving the money from the taxable investment into the 529 plan. Triggering any gains this year may cost more in taxes when compared to spreading out the gains over a number of years. If the existing UGMA/UTMA taxable investments are throwing off more than $950 in annual income, the analysis turns in favor of the 529 option. Although the income between $950 and $1,900 remains taxable at the child's low tax bracket, if it rises above that level it may become taxable at the parents' marginal tax bracket. This rate bump is known as the "Kiddie Tax" and beginning in 2008 it applies to the following three groups of taxpayers: (1) children through the age of 17; (2) 18-year olds who do not earn more than one-half of their own support; and (3) 19- to 23-year-old full-time college students who do not earn more than one-half of their own support. Because of the control issues, the Kiddie Tax, and the financial-aid consequences, most families looking to invest substantial dollars for college should be looking toward 529 plans and away from UGMA/UTMA accounts. Joe Hurley is the founder of Savingforcollege.com LLC, and a certified public accountant. What is an UGMA/UTMA 529? It refers to account in a 529 plan funded with money already owned by your minor child. Because minors generally cannot directly own an investment or bank account, an adult custodian must manage and use the funds for the benefit of the minor child as prescribed under the state's Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA). Another name frequently used for a 529 account opened with UGMA/UTMA money is "custodial 529 account." Nearly all 529 savings plans have special procedures to accommodate UGMA/UTMA 529s. For example, the plan administrator will not permit changes in the beneficiary designation prior to the current beneficiary's 18th or 21st birthday (depending on the state). And when the current beneficiary reaches the age of legal ownership, he or she will have the right to contact the 529 plan administrator and take direct ownership and control of the 529 account. I'd like to put my son's UTMA money into a 529 plan without telling the plan where the money is coming from. That way my son will still be the beneficiary, but I'll be the owner and can control the account without worrying about what happens when my son turns 18. Is there anything wrong with this approach? Establishing the 529 account in your own name as owner does not change the custodian's legal obligation under the UTMA to use the funds for the benefit of that particular child. If you were to change the beneficiary and use the 529 money for a different child, or deny your son's right to take direct ownership at the age of 18 (if that is the legal age in your state), you are probably in violation of the UTMA. An attorney can help explain this to you. If you are worried about your son making poor decisions because of this money, you might better look for ways to "spend down" the account while he is still a minor. If you were to use the UGMA/UTMA account to pay for expenses incurred for his benefit, instead of paying for those expenses yourself, you will have more money to fund a 529 account under your own ownership. I've heard that UGMA/UTMA 529s have been granted favored status under the financial aid laws? Is this true? Yes, it is true. Beginning with the 2006-07 school yearï ¿ ½but ending with the 2008-09 school yearï ¿ ½your child's UGMA/UTMA 529 does not have to be reported on the federal financial aid application (FAFSA). The same exception applies if the UGMA/UTMA has terminated and your child (the student) owns the 529 account directly. But note: this special rule applies only if your child files the FAFSA as your dependent, which is the case for the vast majority of undergraduates. The treatment of an UGMA/UTMA 529 changes beginning with the 2009-10 school year, but is still beneficial. The account is reportable on the FAFSA, but not as a student asset assessed at the usual 20% student rate. Instead, it is reported as a parental asset at the lower 5.64% maximum parental rate. The fact that an asset owned by one party (in this case the student) is treated as if it is owned by another (the parents) is highly unusual in the financial aid laws. Do we improve our child's financial-aid prospects by moving his existing UGMA/UTMA investments into an UGMA/UTMA 529? Quite possibly yes. Let's assume your child's UGMA/UTMA account has $50,000 worth of mutual funds on the day he or she files the FAFSA. Your Expected Family Contribution (EFC) will include 20% of that value, or $10,000. If the mutual funds were liquidated and the cash contributed to an UGMA/UTMA 529 prior to submitting the FAFSA, your EFC will include at most 5.64% of that value, or $2,820. Your child's "financial need" increases by at least $7,180 for the current school year. But there are some important caveats. You have to consider the consequences of liquidating the mutual funds and triggering capital gains. Any gains will not only be reportable on your child's income tax returns, but they will also be included in base-year income on the following year's FAFSA, which can cause a decrease in aid eligibility. Also remember that we are talking here only about federal financial aid. For school-based aid (grants, scholarships, or tuition discounts from the school's own funds), you are not likely to find the same advantage by moving UGMA/UTMA money into a 529 plan. How about making contributions of my own money to my child's UGMA/UTMA 529? Will that help? No. Beginning with the 2009-10 school year, a 529 account is treated as your parental asset whether owned by you, by your child through an UGMA/UTMA, or by your child directly. Most parents would prefer to retain control by contributing to their own 529 accounts. But what about the 529 plans I have for my younger children? Will I have to report them on my older child's FAFSA? Great question. The federal government is telling us that you must include as parental assets the 529 accounts you own for anyone else, because you have full ownership and control of those accounts. It's unfortunate when the funds set aside for a younger child's college education negatively impact the financial-aid eligibility of the older child trying to pay for college. In this case, you may want to seriously consider setting up the 529 accounts for your younger children as UGMA/UTMA 529s, recognizing the additional restrictions and ultimate loss of control. If you have already established the accounts as parent-owned 529s, you may find that your 529 plan administrator will not accept your request for a change in ownership. Avoid taking any action that will be treated as a liquidation of your existing 529 account, leading to tax and penalty on the growth. Okay, let's forget about financial aid for a moment. Is there an income tax savings from moving my child's UGMA/UTMA money into an UGMA/UTMA 529? There could be substantial tax savings, assuming your child would otherwise be paying income tax on taxable interest, dividends, or capital gains. The 529 account will grow tax-deferred, and come out tax-free to pay for college. But wait, it's not quite that simple. Your dependent child can report as much as $950 in investment income in 2009 without being subject to federal income tax. If your college savings never threw off more than $950 in annual income, you might be better off keeping the UGMA/UTMA invested in mutual funds and other taxable investments. (A 529 plan has the disadvantage of a small layer of additional fees, as well as the risk of future tax and penalty if the 529 account is used for something other than college.) You also have to consider the tax consequences of moving the money from the taxable investment into the 529 plan. Triggering any gains this year may cost more in taxes when compared to spreading out the gains over a number of years. If the existing UGMA/UTMA taxable investments are throwing off more than $950 in annual income, the analysis turns in favor of the 529 option. Although the income between $950 and $1,900 remains taxable at the child's low tax bracket, if it rises above that level it may become taxable at the parents' marginal tax bracket. This rate bump is known as the "Kiddie Tax" and beginning in 2008 it applies to the following three groups of taxpayers: (1) children through the age of 17; (2) 18-year olds who do not earn more than one-half of their own support; and (3) 19- to 23-year-old full-time college students who do not earn more than one-half of their own support. Because of the control issues, the Kiddie Tax, and the financial-aid consequences, most families looking to invest substantial dollars for college should be looking toward 529 plans and away from UGMA/UTMA accounts. Joe Hurley is the founder of Savingforcollege.com LLC, and a certified public accountant. Should You Open an Ugma/utma 529 What is an UGMA/UTMA 529? It refers to account in a 529 plan funded with money already owned by your minor child. Because minors generally cannot directly own an investment or bank account, an adult custodian must manage and use the funds for the benefit of the minor child as prescribed under the state's Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA). Another name frequently used for a 529 account opened with UGMA/UTMA money is "custodial 529 account." Nearly all 529 savings plans have special procedures to accommodate UGMA/UTMA 529s. For example, the plan administrator will not permit changes in the beneficiary designation prior to the current beneficiary's 18th or 21st birthday (depending on the state). And when the current beneficiary reaches the age of legal ownership, he or she will have the right to contact the 529 plan administrator and take direct ownership and control of the 529 account. I'd like to put my son's UTMA money into a 529 plan without telling the plan where the money is coming from. That way my son will still be the beneficiary, but I'll be the owner and can control the account without worrying about what happens when my son turns 18. Is there anything wrong with this approach? Establishing the 529 account in your own name as owner does not change the custodian's legal obligation under the UTMA to use the funds for the benefit of that particular child. If you were to change the beneficiary and use the 529 money for a different child, or deny your son's right to take direct ownership at the age of 18 (if that is the legal age in your state), you are probably in violation of the UTMA. An attorney can help explain this to you. If you are worried about your son making poor decisions because of this money, you might better look for ways to "spend down" the account while he is still a minor. If you were to use the UGMA/UTMA account to pay for expenses incurred for his benefit, instead of paying for those expenses yourself, you will have more money to fund a 529 account under your own ownership. I've heard that UGMA/UTMA 529s have been granted favored status under the financial aid laws? Is this true? Yes, it is true. Beginning with the 2006-07 school yearï ¿ ½but ending with the 2008-09 school yearï ¿ ½your child's UGMA/UTMA 529 does not have to be reported on the federal financial aid application (FAFSA). The same exception applies if the UGMA/UTMA has terminated and your child (the student) owns the 529 account directly. But note: this special rule applies only if your child files the FAFSA as your dependent, which is the case for the vast majority of undergraduates. The treatment of an UGMA/UTMA 529 changes beginning with the 2009-10 school year, but is still beneficial. The account is reportable on the FAFSA, but not as a student asset assessed at the usual 20% student rate. Instead, it is reported as a parental asset at the lower 5.64% maximum parental rate. The fact that an asset owned by one party (in this case the student) is treated as if it is owned by another (the parents) is highly unusual in the financial aid laws. Do we improve our child's financial-aid prospects by moving his existing UGMA/UTMA investments into an UGMA/UTMA 529? Quite possibly yes. Let's assume your child's UGMA/UTMA account has $50,000 worth of mutual funds on the day he or she files the FAFSA. Your Expected Family Contribution (EFC) will include 20% of that value, or $10,000. If the mutual funds were liquidated and the cash contributed to an UGMA/UTMA 529 prior to submitting the FAFSA, your EFC will include at most 5.64% of that value, or $2,820. Your child's "financial need" increases by at least $7,180 for the current school year. But there are some important caveats. You have to consider the consequences of liquidating the mutual funds and triggering capital gains. Any gains will not only be reportable on your child's income tax returns, but they will also be included in base-year income on the following year's FAFSA, which can cause a decrease in aid eligibility. Also remember that we are talking here only about federal financial aid. For school-based aid (grants, scholarships, or tuition discounts from the school's own funds), you are not likely to find the same advantage by moving UGMA/UTMA money into a 529 plan. How about making contributions of my own money to my child's UGMA/UTMA 529? Will that help? No. Beginning with the 2009-10 school year, a 529 account is treated as your parental asset whether owned by you, by your child through an UGMA/UTMA, or by your child directly. Most parents would prefer to retain control by contributing to their own 529 accounts. But what about the 529 plans I have for my younger children? Will I have to report them on my older child's FAFSA? Great question. The federal government is telling us that you must include as parental assets the 529 accounts you own for anyone else, because you have full ownership and control of those accounts. It's unfortunate when the funds set aside for a younger child's college education negatively impact the financial-aid eligibility of the older child trying to pay for college. In this case, you may want to seriously consider setting up the 529 accounts for your younger children as UGMA/UTMA 529s, recognizing the additional restrictions and ultimate loss of control. If you have already established the accounts as parent-owned 529s, you may find that your 529 plan administrator will not accept your request for a change in ownership. Avoid taking any action that will be treated as a liquidation of your existing 529 account, leading to tax and penalty on the growth. Okay, let's forget about financial aid for a moment. Is there an income tax savings from moving my child's UGMA/UTMA money into an UGMA/UTMA 529? There could be substantial tax savings, assuming your child would otherwise be paying income tax on taxable interest, dividends, or capital gains. The 529 account will grow tax-deferred, and come out tax-free to pay for college. But wait, it's not quite that simple. Your dependent child can report as much as $950 in investment income in 2009 without being subject to federal income tax. If your college savings never threw off more than $950 in annual income, you might be better off keeping the UGMA/UTMA invested in mutual funds and other taxable investments. (A 529 plan has the disadvantage of a small layer of additional fees, as well as the risk of future tax and penalty if the 529 account is used for something other than college.) You also have to consider the tax consequences of moving the money from the taxable investment into the 529 plan. Triggering any gains this year may cost more in taxes when compared to spreading out the gains over a number of years. If the existing UGMA/UTMA taxable investments are throwing off more than $950 in annual income, the analysis turns in favor of the 529 option. Although the income between $950 and $1,900 remains taxable at the child's low tax bracket, if it rises above that level it may become taxable at the parents' marginal tax bracket. This rate bump is known as the "Kiddie Tax" and beginning in 2008 it applies to the following three groups of taxpayers: (1) children through the age of 17; (2) 18-year olds who do not earn more than one-half of their own support; and (3) 19- to 23-year-old full-time college students who do not earn more than one-half of their own support. Because of the control issues, the Kiddie Tax, and the financial-aid consequences, most families looking to invest substantial dollars for college should be looking toward 529 plans and away from UGMA/UTMA accounts. Joe Hurley is the founder of Savingforcollege.com LLC, and a certified public accountant. What is an UGMA/UTMA 529? It refers to account in a 529 plan funded with money already owned by your minor child. Because minors generally cannot directly own an investment or bank account, an adult custodian must manage and use the funds for the benefit of the minor child as prescribed under the state's Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA). Another name frequently used for a 529 account opened with UGMA/UTMA money is "custodial 529 account." Nearly all 529 savings plans have special procedures to accommodate UGMA/UTMA 529s. For example, the plan administrator will not permit changes in the beneficiary designation prior to the current beneficiary's 18th or 21st birthday (depending on the state). And when the current beneficiary reaches the age of legal ownership, he or she will have the right to contact the 529 plan administrator and take direct ownership and control of the 529 account. I'd like to put my son's UTMA money into a 529 plan without telling the plan where the money is coming from. That way my son will still be the beneficiary, but I'll be the owner and can control the account without worrying about what happens when my son turns 18. Is there anything wrong with this approach? Establishing the 529 account in your own name as owner does not change the custodian's legal obligation under the UTMA to use the funds for the benefit of that particular child. If you were to change the beneficiary and use the 529 money for a different child, or deny your son's right to take direct ownership at the age of 18 (if that is the legal age in your state), you are probably in violation of the UTMA. An attorney can help explain this to you. If you are worried about your son making poor decisions because of this money, you might better look for ways to "spend down" the account while he is still a minor. If you were to use the UGMA/UTMA account to pay for expenses incurred for his benefit, instead of paying for those expenses yourself, you will have more money to fund a 529 account under your own ownership. I've heard that UGMA/UTMA 529s have been granted favored status under the financial aid laws? Is this true? Yes, it is true. Beginning with the 2006-07 school yearï ¿ ½but ending with the 2008-09 school yearï ¿ ½your child's UGMA/UTMA 529 does not have to be reported on the federal financial aid application (FAFSA). The same exception applies if the UGMA/UTMA has terminated and your child (the student) owns the 529 account directly. But note: this special rule applies only if your child files the FAFSA as your dependent, which is the case for the vast majority of undergraduates. The treatment of an UGMA/UTMA 529 changes beginning with the 2009-10 school year, but is still beneficial. The account is reportable on the FAFSA, but not as a student asset assessed at the usual 20% student rate. Instead, it is reported as a parental asset at the lower 5.64% maximum parental rate. The fact that an asset owned by one party (in this case the student) is treated as if it is owned by another (the parents) is highly unusual in the financial aid laws. Do we improve our child's financial-aid prospects by moving his existing UGMA/UTMA investments into an UGMA/UTMA 529? Quite possibly yes. Let's assume your child's UGMA/UTMA account has $50,000 worth of mutual funds on the day he or she files the FAFSA. Your Expected Family Contribution (EFC) will include 20% of that value, or $10,000. If the mutual funds were liquidated and the cash contributed to an UGMA/UTMA 529 prior to submitting the FAFSA, your EFC will include at most 5.64% of that value, or $2,820. Your child's "financial need" increases by at least $7,180 for the current school year. But there are some important caveats. You have to consider the consequences of liquidating the mutual funds and triggering capital gains. Any gains will not only be reportable on your child's income tax returns, but they will also be included in base-year income on the following year's FAFSA, which can cause a decrease in aid eligibility. Also remember that we are talking here only about federal financial aid. For school-based aid (grants, scholarships, or tuition discounts from the school's own funds), you are not likely to find the same advantage by moving UGMA/UTMA money into a 529 plan. How about making contributions of my own money to my child's UGMA/UTMA 529? Will that help? No. Beginning with the 2009-10 school year, a 529 account is treated as your parental asset whether owned by you, by your child through an UGMA/UTMA, or by your child directly. Most parents would prefer to retain control by contributing to their own 529 accounts. But what about the 529 plans I have for my younger children? Will I have to report them on my older child's FAFSA? Great question. The federal government is telling us that you must include as parental assets the 529 accounts you own for anyone else, because you have full ownership and control of those accounts. It's unfortunate when the funds set aside for a younger child's college education negatively impact the financial-aid eligibility of the older child trying to pay for college. In this case, you may want to seriously consider setting up the 529 accounts for your younger children as UGMA/UTMA 529s, recognizing the additional restrictions and ultimate loss of control. If you have already established the accounts as parent-owned 529s, you may find that your 529 plan administrator will not accept your request for a change in ownership. Avoid taking any action that will be treated as a liquidation of your existing 529 account, leading to tax and penalty on the growth. Okay, let's forget about financial aid for a moment. Is there an income tax savings from moving my child's UGMA/UTMA money into an UGMA/UTMA 529? There could be substantial tax savings, assuming your child would otherwise be paying income tax on taxable interest, dividends, or capital gains. The 529 account will grow tax-deferred, and come out tax-free to pay for college. But wait, it's not quite that simple. Your dependent child can report as much as $950 in investment income in 2009 without being subject to federal income tax. If your college savings never threw off more than $950 in annual income, you might be better off keeping the UGMA/UTMA invested in mutual funds and other taxable investments. (A 529 plan has the disadvantage of a small layer of additional fees, as well as the risk of future tax and penalty if the 529 account is used for something other than college.) You also have to consider the tax consequences of moving the money from the taxable investment into the 529 plan. Triggering any gains this year may cost more in taxes when compared to spreading out the gains over a number of years. If the existing UGMA/UTMA taxable investments are throwing off more than $950 in annual income, the analysis turns in favor of the 529 option. Although the income between $950 and $1,900 remains taxable at the child's low tax bracket, if it rises above that level it may become taxable at the parents' marginal tax bracket. This rate bump is known as the "Kiddie Tax" and beginning in 2008 it applies to the following three groups of taxpayers: (1) children through the age of 17; (2) 18-year olds who do not earn more than one-half of their own support; and (3) 19- to 23-year-old full-time college students who do not earn more than one-half of their own support. Because of the control issues, the Kiddie Tax, and the financial-aid consequences, most families looking to invest substantial dollars for college should be looking toward 529 plans and away from UGMA/UTMA accounts. Joe Hurley is the founder of Savingforcollege.com LLC, and a certified public accountant. Should You Open an Ugma/utma 529 What is an UGMA/UTMA 529? It refers to account in a 529 plan funded with money already owned by your minor child. Because minors generally cannot directly own an investment or bank account, an adult custodian must manage and use the funds for the benefit of the minor child as prescribed under the state's Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA). Another name frequently used for a 529 account opened with UGMA/UTMA money is "custodial 529 account." Nearly all 529 savings plans have special procedures to accommodate UGMA/UTMA 529s. For example, the plan administrator will not permit changes in the beneficiary designation prior to the current beneficiary's 18th or 21st birthday (depending on the state). And when the current beneficiary reaches the age of legal ownership, he or she will have the right to contact the 529 plan administrator and take direct ownership and control of the 529 account. I'd like to put my son's UTMA money into a 529 plan without telling the plan where the money is coming from. That way my son will still be the beneficiary, but I'll be the owner and can control the account without worrying about what happens when my son turns 18. Is there anything wrong with this approach? Establishing the 529 account in your own name as owner does not change the custodian's legal obligation under the UTMA to use the funds for the benefit of that particular child. If you were to change the beneficiary and use the 529 money for a different child, or deny your son's right to take direct ownership at the age of 18 (if that is the legal age in your state), you are probably in violation of the UTMA. An attorney can help explain this to you. If you are worried about your son making poor decisions because of this money, you might better look for ways to "spend down" the account while he is still a minor. If you were to use the UGMA/UTMA account to pay for expenses incurred for his benefit, instead of paying for those expenses yourself, you will have more money to fund a 529 account under your own ownership. I've heard that UGMA/UTMA 529s have been granted favored status under the financial aid laws? Is this true? Yes, it is true. Beginning with the 2006-07 school yearï ¿ ½but ending with the 2008-09 school yearï ¿ ½your child's UGMA/UTMA 529 does not have to be reported on the federal financial aid application (FAFSA). The same exception applies if the UGMA/UTMA has terminated and your child (the student) owns the 529 account directly. But note: this special rule applies only if your child files the FAFSA as your dependent, which is the case for the vast majority of undergraduates. The treatment of an UGMA/UTMA 529 changes beginning with the 2009-10 school year, but is still beneficial. The account is reportable on the FAFSA, but not as a student asset assessed at the usual 20% student rate. Instead, it is reported as a parental asset at the lower 5.64% maximum parental rate. The fact that an asset owned by one party (in this case the student) is treated as if it is owned by another (the parents) is highly unusual in the financial aid laws. Do we improve our child's financial-aid prospects by moving his existing UGMA/UTMA investments into an UGMA/UTMA 529? Quite possibly yes. Let's assume your child's UGMA/UTMA account has $50,000 worth of mutual funds on the day he or she files the FAFSA. Your Expected Family Contribution (EFC) will include 20% of that value, or $10,000. If the mutual funds were liquidated and the cash contributed to an UGMA/UTMA 529 prior to submitting the FAFSA, your EFC will include at most 5.64% of that value, or $2,820. Your child's "financial need" increases by at least $7,180 for the current school year. But there are some important caveats. You have to consider the consequences of liquidating the mutual funds and triggering capital gains. Any gains will not only be reportable on your child's income tax returns, but they will also be included in base-year income on the following year's FAFSA, which can cause a decrease in aid eligibility. Also remember that we are talking here only about federal financial aid. For school-based aid (grants, scholarships, or tuition discounts from the school's own funds), you are not likely to find the same advantage by moving UGMA/UTMA money into a 529 plan. How about making contributions of my own money to my child's UGMA/UTMA 529? Will that help? No. Beginning with the 2009-10 school year, a 529 account is treated as your parental asset whether owned by you, by your child through an UGMA/UTMA, or by your child directly. Most parents would prefer to retain control by contributing to their own 529 accounts. But what about the 529 plans I have for my younger children? Will I have to report them on my older child's FAFSA? Great question. The federal government is telling us that you must include as parental assets the 529 accounts you own for anyone else, because you have full ownership and control of those accounts. It's unfortunate when the funds set aside for a younger child's college education negatively impact the financial-aid eligibility of the older child trying to pay for college. In this case, you may want to seriously consider setting up the 529 accounts for your younger children as UGMA/UTMA 529s, recognizing the additional restrictions and ultimate loss of control. If you have already established the accounts as parent-owned 529s, you may find that your 529 plan administrator will not accept your request for a change in ownership. Avoid taking any action that will be treated as a liquidation of your existing 529 account, leading to tax and penalty on the growth. Okay, let's forget about financial aid for a moment. Is there an income tax savings from moving my child's UGMA/UTMA money into an UGMA/UTMA 529? There could be substantial tax savings, assuming your child would otherwise be paying income tax on taxable interest, dividends, or capital gains. The 529 account will grow tax-deferred, and come out tax-free to pay for college. But wait, it's not quite that simple. Your dependent child can report as much as $950 in investment income in 2009 without being subject to federal income tax. If your college savings never threw off more than $950 in annual income, you might be better off keeping the UGMA/UTMA invested in mutual funds and other taxable investments. (A 529 plan has the disadvantage of a small layer of additional fees, as well as the risk of future tax and penalty if the 529 account is used for something other than college.) You also have to consider the tax consequences of moving the money from the taxable investment into the 529 plan. Triggering any gains this year may cost more in taxes when compared to spreading out the gains over a number of years. If the existing UGMA/UTMA taxable investments are throwing off more than $950 in annual income, the analysis turns in favor of the 529 option. Although the income between $950 and $1,900 remains taxable at the child's low tax bracket, if it rises above that level it may become taxable at the parents' marginal tax bracket. This rate bump is known as the "Kiddie Tax" and beginning in 2008 it applies to the following three groups of taxpayers: (1) children through the age of 17; (2) 18-year olds who do not earn more than one-half of their own support; and (3) 19- to 23-year-old full-time college students who do not earn more than one-half of their own support. Because of the control issues, the Kiddie Tax, and the financial-aid consequences, most families looking to invest substantial dollars for college should be looking toward 529 plans and away from UGMA/UTMA accounts. Joe Hurley is the founder of Savingforcollege.com LLC, and a certified public accountant. What is an UGMA/UTMA 529? It refers to account in a 529 plan funded with money already owned by your minor child. Because minors generally cannot directly own an investment or bank account, an adult custodian must manage and use the funds for the benefit of the minor child as prescribed under the state's Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA). Another name frequently used for a 529 account opened with UGMA/UTMA money is "custodial 529 account." Nearly all 529 savings plans have special procedures to accommodate UGMA/UTMA 529s. For example, the plan administrator will not permit changes in the beneficiary designation prior to the current beneficiary's 18th or 21st birthday (depending on the state). And when the current beneficiary reaches the age of legal ownership, he or she will have the right to contact the 529 plan administrator and take direct ownership and control of the 529 account. I'd like to put my son's UTMA money into a 529 plan without telling the plan where the money is coming from. That way my son will still be the beneficiary, but I'll be the owner and can control the account without worrying about what happens when my son turns 18. Is there anything wrong with this approach? Establishing the 529 account in your own name as owner does not change the custodian's legal obligation under the UTMA to use the funds for the benefit of that particular child. If you were to change the beneficiary and use the 529 money for a different child, or deny your son's right to take direct ownership at the age of 18 (if that is the legal age in your state), you are probably in violation of the UTMA. An attorney can help explain this to you. If you are worried about your son making poor decisions because of this money, you might better look for ways to "spend down" the account while he is still a minor. If you were to use the UGMA/UTMA account to pay for expenses incurred for his benefit, instead of paying for those expenses yourself, you will have more money to fund a 529 account under your own ownership. I've heard that UGMA/UTMA 529s have been granted favored status under the financial aid laws? Is this true? Yes, it is true. Beginning with the 2006-07 school yearï ¿ ½but ending with the 2008-09 school yearï ¿ ½your child's UGMA/UTMA 529 does not have to be reported on the federal financial aid application (FAFSA). The same exception applies if the UGMA/UTMA has terminated and your child (the student) owns the 529 account directly. But note: this special rule applies only if your child files the FAFSA as your dependent, which is the case for the vast majority of undergraduates. The treatment of an UGMA/UTMA 529 changes beginning with the 2009-10 school year, but is still beneficial. The account is reportable on the FAFSA, but not as a student asset assessed at the usual 20% student rate. Instead, it is reported as a parental asset at the lower 5.64% maximum parental rate. The fact that an asset owned by one party (in this case the student) is treated as if it is owned by another (the parents) is highly unusual in the financial aid laws. Do we improve our child's financial-aid prospects by moving his existing UGMA/UTMA investments into an UGMA/UTMA 529? Quite possibly yes. Let's assume your child's UGMA/UTMA account has $50,000 worth of mutual funds on the day he or she files the FAFSA. Your Expected Family Contribution (EFC) will include 20% of that value, or $10,000. If the mutual funds were liquidated and the cash contributed to an UGMA/UTMA 529 prior to submitting the FAFSA, your EFC will include at most 5.64% of that value, or $2,820. Your child's "financial need" increases by at least $7,180 for the current school year. But there are some important caveats. You have to consider the consequences of liquidating the mutual funds and triggering capital gains. Any gains will not only be reportable on your child's income tax returns, but they will also be included in base-year income on the following year's FAFSA, which can cause a decrease in aid eligibility. Also remember that we are talking here only about federal financial aid. For school-based aid (grants, scholarships, or tuition discounts from the school's own funds), you are not likely to find the same advantage by moving UGMA/UTMA money into a 529 plan. How about making contributions of my own money to my child's UGMA/UTMA 529? Will that help? No. Beginning with the 2009-10 school year, a 529 account is treated as your parental asset whether owned by you, by your child through an UGMA/UTMA, or by your child directly. Most parents would prefer to retain control by contributing to their own 529 accounts. But what about the 529 plans I have for my younger children? Will I have to report them on my older child's FAFSA? Great question. The federal government is telling us that you must include as parental assets the 529 accounts you own for anyone else, because you have full ownership and control of those accounts. It's unfortunate when the funds set aside for a younger child's college education negatively impact the financial-aid eligibility of the older child trying to pay for college. In this case, you may want to seriously consider setting up the 529 accounts for your younger children as UGMA/UTMA 529s, recognizing the additional restrictions and ultimate loss of control. If you have already established the accounts as parent-owned 529s, you may find that your 529 plan administrator will not accept your request for a change in ownership. Avoid taking any action that will be treated as a liquidation of your existing 529 account, leading to tax and penalty on the growth. Okay, let's forget about financial aid for a moment. Is there an income tax savings from moving my child's UGMA/UTMA money into an UGMA/UTMA 529? There could be substantial tax savings, assuming your child would otherwise be paying income tax on taxable interest, dividends, or capital gains. The 529 account will grow tax-deferred, and come out tax-free to pay for college. But wait, it's not quite that simple. Your dependent child can report as much as $950 in investment income in 2009 without being subject to federal income tax. If your college savings never threw off more than $950 in annual income, you might be better off keeping the UGMA/UTMA invested in mutual funds and other taxable investments. (A 529 plan has the disadvantage of a small layer of additional fees, as well as the risk of future tax and penalty if the 529 account is used for something other than college.) You also have to consider the tax consequences of moving the money from the taxable investment into the 529 plan. Triggering any gains this year may cost more in taxes when compared to spreading out the gains over a number of years. If the existing UGMA/UTMA taxable investments are throwing off more than $950 in annual income, the analysis turns in favor of the 529 option. Although the income between $950 and $1,900 remains taxable at the child's low tax bracket, if it rises above that level it may become taxable at the parents' marginal tax bracket. This rate bump is known as the "Kiddie Tax" and beginning in 2008 it applies to the following three groups of taxpayers: (1) children through the age of 17; (2) 18-year olds who do not earn more than one-half of their own support; and (3) 19- to 23-year-old full-time college students who do not earn more than one-half of their own support. Because of the control issues, the Kiddie Tax, and the financial-aid consequences, most families looking to invest substantial dollars for college should be looking toward 529 plans and away from UGMA/UTMA accounts. Joe Hurley is the founder of Savingforcollege.com LLC, and a certified public accountant.

Wednesday, May 20, 2020

The financial management policies of Sainsburys - Free Essay Example

Sample details Pages: 13 Words: 3924 Downloads: 6 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Level High school Did you like this example? Report to critically evaluate the Financial Management policies and practices of J Sainsbury plc over the last five years. including gearing dividend decisions, investment performance appraisal and cost of capital subjects. J. Sainsbury plc was established in 1869 by John James and Mary Ann Sainsbury. Don’t waste time! Our writers will create an original "The financial management policies of Sainsburys" essay for you Create order It is established as Britainà ¢Ã¢â€š ¬Ã¢â€ž ¢s oldest food retailer. It comprises two divisions à ¢Ã¢â€š ¬Ã¢â‚¬Å" Retailing, by way of its supermarkets and smaller convenience stores, together with its financial services, Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s Bank. It aims to provide high quality products, at good value with an excellent standard of service. It is the third largest grocery chain in the UK behind Tesco and Asda/Wal-Mart. [1] The J. Sainsburys food retail area serves over 16 million customers a week by way of a total 788 stores and an internet-based home delivery service. The financial services area of Sainsburys Bank, offers a variety of packages including life insurance, saver accounts, credit cards and travel insurance to name a few. In October 2004 the supermarket giant was suffering the consequences of the increasing success of its competitors and it responded by announcing a dramatic recovery plan which would serve to lead it out of the spiraling losses the company was experiencing. Still reeling from the impact of late 1990à ¢Ã¢â€š ¬Ã¢â€ž ¢s BSE financial implications where the stores lost out over two million on fresh beef alone.[2] The Making Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s Great Again strategy served to increase their overall profits by over 200 million before tax in just over one year.[3] Before floundering again two years later under speculation of an impending takeover. A fiscal breakdown of the procedures between 2003 and 2008 demonstrates the financial narrative of a company experiencing highs and lows in a competitive environment, maintaining its significant profile and diversifying its options. 2003-2005 Following on from 2002 and a year in which sales growth increased profits and encouraged the operational gearing, Sainsbury Shareholdersà ¢Ã¢â€š ¬Ã¢â€ž ¢ funds increased by  £155 million to  £5,003 million, with net debt increasing by  £248million. Public confidence had been gained but severe losses were still being documented. The company also found themselves having to increase their borrowing and extended their loans by an additional three and a half years. The overall Group gearing, or Net debt divided by total equity, rose to 28% with group capital rising from 11.1 % to 11.5%. This will no doubt be a reflection of the number of investments that the Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s group made during this year.[4] The company Directors recommended the payment of a final dividend of 11.36 pence per share, at an increase of 0.54 pence from 2002 and a total dividend for the year ending 2003 of 15.58 pence per share, complimenting the increase in the number of shareholders that year. This total also reflected the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s aim to encourage profit growth in 2004. In terms of the groups investments during these two years the one million pound investment it had made in the Homebase stores was sold. The final disposal of this investment made the company a total profit of around  £61 million, after taking into account any liabilities following the sale of the partner business in 2001which boosted the profits for the group noticeably in 2003.[5] The figures below illustrate the differences in terms of the increased investments and total debt that the company experienced over one year.[6] 2003 2002 Cash and current asset investments 659 386 Debt (2,063) (1,542) Fixed asset investments Group Company 2003 2002 2003 2002 Shares in group undertakings (note 16) à ¢Ã¢â€š ¬Ã¢â‚¬Å" à ¢Ã¢â€š ¬Ã¢â‚¬Å" 7,661 6,227 Joint ventures (note 17) 9 44 6 33 Own shares at cost1 86 88 à ¢Ã¢â€š ¬Ã¢â‚¬Å" à ¢Ã¢â€š ¬Ã¢â‚¬Å" Other unlisted investments at cost 17 42 à ¢Ã¢â€š ¬Ã¢â‚¬Å" 25 By the end of 2003 Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s were in trouble and fighting to maintain their positioning amongst the other major chains. In July 2003 Asda gained 17% of the market share. Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s slipped from a position of 17.1% of the market share to just 16.2%. Following the merger with Wal-Mart, Asda proceeded to overtake Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s as the second largest supermarket in the UK. [7] In 2004 it was determined that an increase in profits was needed urgently through sales and it was agreed that in order to meet these targets group managers would be provided with financial incentives. Consequently a share incentive scheme was initiated for all senior managers within Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s plc. Performance of these managers would be assessed over a period of four years and only when all targets had been met would the scheme be awarded.[8] Although the scheme encouraged increased and improved working practice it did look to the media like the Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s group were floundering, with a public announcement that acknowledged the weaknesses that existed within the company. What followed was a continued drive to invest and increase performance. Their 2 005 annual report stresses the importance attached to investment with the creation of a specialist web site designed to provide information on current investors in addition to attracting new ones.[9] This 2005 report also outlines the Performance indicators for 2004 and 2005 for Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s initiatives nationwide. In terms of offering new provision to its customers as part of the ongoing attempts to raise their profile the group launched its Wheel of Health campaign to encourage shoppers to think about the healthier options where eating is concerned and an astonishing 250,000 children took part in their Taste of Success initiative. This programme had the aim of assisting young people in a bid to encourage learning about food and nutrition. Running in partnership with the British Nutrition Foundation and the Design Technology Association, curriculum courses around food technology were built into the scheme which hosted food awards and awareness training for teach ers across the UK. Efforts were made to engage more with the community and align the company to the needs of assisting with regeneration across the country. It was an excellent attempt at active inclusivity and would have served to improve their image at the time significantly. Local Heroes awards were given to colleagues who demonstrated acts of courage, assistance or excellence within their communities, participating once again in the Investors in People scheme and reaching out to their own staff for their knowledge input and consultation around the way in which the business operates overall. Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s also became heavily involved with Comic Relief activities, raising seven million pounds throughout its stores for the charity and developing a vouchers for school campaign to support schools buying sports equipment. It seems that Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s had a stake in everything in 2005 and was actively playing its part for the environment by reducin g packaging significantly, reducing its CO2 emissions and introducing biodegradable methods for its waste produce. During this year the company headed up the Dow Jones Sustainability Indices and proved themselves to be the only retailer in the UK to appear in the Global 100 list of sustainable corporations. In 2005 they also took the award for Organic Supermarket of the Year.[10] Looking at the overall Capital between 2003 and 2005 the company argued that capital was in decline in 2003 due to the fact that the Easter holidays were much earlier than usual and a significant amount of new lines were being introduced. [11] Group capital expenditure for the year amounted to 1,197 million, compared to 1,159 million the previous year. This increase can also be attributed to the variety of new business transformation concepts. Essentially higher levels of spending had been necessary to adopt innovative activities for all stores to participate in across the UK. During this year Sain sburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s bought up a number of additional retail units acquired from the newly liquidated Ames Department stores. These needed financial support over the next couple of years in terms of refurbishment and conversion into new Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s supermarket stores. By 2004 capital expenditure was reducing and the company was seeing the signs of improved cash flow, additionally supported by lower dividend payments.[12]. In 2004/05 Capital expenditure dropped to around  £500 million. Throughout 2004/05 Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s integrated an energy savings programme across all of its stores and offices with a spend of over  £14million working in partnership with npower[13] 2006 to 2008 By 2006 Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s recovery plan was beginning to demonstrate a real difference. In 2005 it had set itself a target of  £2.5 billion in sales over a three year period. There were vast improvements in the retail operating profit m argins, demonstrable by a 14.3% operating profit growth recorded for 2005/06. By 2006 they were over half way to achieving their  £2.5 billion sales target. Their operational gearing had improved and risen considerably. During November 2006 Citigroup were predicting an increase of 64% in their overall profits before tax to reach  £193 million. Shares in Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s also rose to all time high in eight years, to a staggering 420p.[14] This overwhelming continued improvement in operational gearing can be attributed to greater sales and a reduction in costs. For example the group managed to make significant savings in labour and IT during this period.[15] This resulted in their ability to demonstrate higher investment in the overall quality of price and product. Between 2005 and 2006 a final dividend of 5.85p per share was announced. By 2007 a final dividend of 7.35 pence per share was proposed. [16]Once again illustrating the continued economic stre ngth of the company over a comparative short space of time. The table below illustrates the comparative performance indicators for Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s between 2005 and 2006[17] Continuing operations 2006 2005 Sales (inc VAT)  £17,317m  £16,364m Sales (ex VAT)  £16,061m  £15,202m Underlying operating profit  £342m  £325m Underlying profit before tax  £267m  £238m Profit/(loss) before tax  £104m  £(238)m Profit/(loss) after tax  £58m  £(187)m Underlying earnings per share 10.50p 8.30p Basic earnings/(losses) per share 3.80p (17.40p) Proposed dividend per share 8.00p 7.80p What is immediately obvious here are the increased levels of profit and the tremendous rise in value against Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s shares. As mentioned previously the new stores made a tremendous contribution to the noticeable growth in sales, including the introduction of 14 new supermarkets and 20 new metro convenience stores. In 2006 The Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s Group made other investments by way of completing nine extensions, 28 refurbishments, with a total 94 refurbishments and conversions of its convenience stores overall[18]. By 2005/06 the effects of their Making Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s Great strategy were becoming very apparent. Around this time the retail industry were however experiencing the negative effects of financial increases across the UK placed upon rent, rates and wages. In addition many energy supply companies were gradually introducing their higher costs and Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s estimated their energy expenses to total around Ã⠀šÃ‚ £55 million by the end of 2007.[19] In 2005 Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s owned 455 supermarkets. In 2006 they had targeted and additional 131 stores to invest in and refurbished 37 of these by March. They extended ten stores and acquired nine disbanded Safeway stores from Morrisonà ¢Ã¢â€š ¬Ã¢â€ž ¢s in this same year. These ex-Morrisonà ¢Ã¢â€š ¬Ã¢â€ž ¢s stores provided Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s with around a 20% increase in overall sales. This demonstrates their ability to penetrate new locations successfully. During 2006 the group also embarked on an enhancement programme for their online home delivery service. As a consequence they received a sales increase of over 25% from this market.[20] 2005 witnessed another significant move by Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s to assist with their recovery programme, when they decided to terminate their IT outsourced contract with company Accenture. In 2000 Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s had signed a contract worth over  £1 .7 billion, scheduled to continue for seven years. In 2003 this was reviewed and extended to 2010. In the meantime Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s decided to invest in its own IT systems and made the move towards developing their own in-house systems. This decision also followed in the wake of the Accenture infrastructures failing to adequately support the needs of the company and costing Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s at one point  £500 million in supply chain and IT assets. At the time Chief Executive Justin King responded publically that à ¢Ã¢â€š ¬Ã‹Å"The IT cost is a greater proportion of sales than they were three years agoà ¢Ã¢â€š ¬Ã¢â€ž ¢. [21] Dropping the contract and focusing on an in-house infrastructure in 2005 enabled Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s to recoup some of ità ¢Ã¢â€š ¬Ã¢â€ž ¢s losses and the drain in spend that Accenture were taking from the company each year Capital expenditure reduced in 2006 to  £525 million, a sharp decrease from the pre vious financial year where capital expenditure had reached a staggering  £901 million. This can however largely be accounted for as the increase had included Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s new investments in the ex-Morrisonà ¢Ã¢â€š ¬Ã¢â€ž ¢s stores and the balance of this was significantly outweighed by the resulting increase in sales.[22] 2007 witnessed another sharp increase in capital by  £212 million on the previous year and can mostly be attributed to the cost of refurbishment and extensions to existing stores.[23] Throughout 2006 and 2007 Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s had begun talks with the Qatari based investment fund, Delta Two, with regard to a possible takeover and a proposed bid amounting to  £10.6 billion. The bid was quashed finally at the end of 2007; as a result of the effects of the global credit crunch, but not without its consequences. The public and investors had panicked and lost confidence in the Sainsbury group and share prices plumme ted by 20%, impacting on the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s overall market value which reduced by  £1.8 billion.[24] Delta Two remain in possession of 25% ownership of the group (the Sainsbury family hold 18%) and would be at liberty to present a new offer in light of the fact that six months have elapsed since their last bid failed. It is unlikely to consider a new takeover bid, in terms of the Sainsbury group refusing to back down against their offer and the Qatarià ¢Ã¢â€š ¬Ã¢â€ž ¢s inability to negotiate, but the likelihood of some future takeover is not completely improbable, considering this particular deal became so near to closure and received such immense media attention. Brian Revell of Unite, which is Britains largest union consisting of 20,000 members at Sainsburys declared the failed takeover bid to be a positive move for the supermarket and looks forward to a period of stability and business as usual. In contrast Revell has stated that there remain issues across the group which are still not resolved. We are aware that significant Sainsburys shareholders have designs on splitting the companys retail and property interests. Such a split would not be good news in our judgment and we would urge the board to resist the temptation. And other investors such as Robert Tchenguiz whose property empire owns a 10% stake in Sainsburys is continually lobbying the board to release the  £8 billion value of Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s, in order to re-invest in a significant property enterprise. [25]The companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s most recent announcements to begin moving more resources into non-food initiatives, may see a more gradual shift into different, more varied opportunistic markets such as this. Similarly only six months ago Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s announced their new investments of  £273 million into the joint venture property enterprise British Land. 2008 has marked the end of the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s Making Sainsbu ryà ¢Ã¢â€š ¬Ã¢â€ž ¢s Great Again strategy, launched in 2004 at the height of their financial difficulties and struggle to maintain their profile. This recovery plan had revolved around improving customer incentives and operational efficiency in order to increase sales and profit enhancement. The original sales target set by the group in 2004 had been an agreed  £2.5 billion. With sales of  £2.7 billion announced in March of this year the supermarket giant has managed to exceed their target, with profits also significantly increasing by 28.4% before tax. A final dividend of 9.00 pence per share agreed in 2008 raises the year end dividend to 12.00 pence. This demonstrates an increase of 23.1 per cent compared to 2007.[26] However the Financial Times income statement for Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s confirms that Year on year since 2004 little progress has been made in their total net income which has risen from 325.00m to just 329.00m. What is apparent is the grow th in revenue by 4.00% during this period which can be attributed to the increase in the cost of goods sold as a percentage of their sales. Cash flow margins from these figures also illustrate considerable losses in cash reserves for 2008. This is probably accountable by way of the 791million the company spent on investments.[27] It was announced at a Food and Grocery conference earlier this year that Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s will now take forward a new strategy, following on from the success of Making Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s Great Again. The new From Recovery to Growth plan heralds s the start of another three year initiative that will anticipate a sales growth of  £3.5 billion. Around  £15 million will be invested in the project.This latest strategy will see Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s focusing on new business opportunities, improving their online home delivery service and diversifying its products to expand further into the non-foods market.[28] Conc lusion Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s has responded to a variety of financial challenges over the past five years, dealing with the threat of stronger competition, a fluctuating economy which has influenced UK shopping trends and beaten back the threat of takeover and possible insolvency. In 2005 the sales figures, profit losses and ever decreasing share prices were presenting a bleak picture for the company. A massive recovery plan, expansion of its stores and nationwide initiatives and new partnerships enabled the company to recuperate its losses and generate a huge increase in sales. Early measures taken to dramatically cut the costs of ità ¢Ã¢â€š ¬Ã¢â€ž ¢s IT outsourcing in 2005 also contributed to the decrease in unnecessary investments. Together with their shrewd publicity campaigns led by the popular celebrity chef Jamie Oliver, Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s used a number of combined profile raising and financial initiatives in order to deliver a complete economic turnaround . In 2008 Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s total retail sales including VAT currently stand at 19,287 million, an increase on their previous year from 18,227 million. And a considerable improvement on their sales figures recorded for 2005 at 16,354 million. Since 2005 a steady year on year rise has amounted to a total increase in sales of just under  £300 million. Similarly their profits have soared. Profit before tax in 2008 confirms a 28.4% rise at  £488 million. Precisely  £108 million compared to 2007. Profits in 2006 were recorded at  £108 million. This illustrates an overwhelming profit increase of  £380 million for Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s over just two years. Like-for-like sales, excluding fuel, has risen 3.9 per cent. The group has recorded 13 consecutive quarters of like-for-like growth. Sales, cost cutting and profit targets under this programme have all been exceeded in accordance with the Making Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s Great Again strategy. In the face of continued speculation regarding the global economy and less disposable income, Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s Chief Executive, Justin King has acknowledged the ongoing worries regarding consumer spend across all economies, declaring Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s to be à ¢Ã¢â€š ¬Ã‹Å"clearly under pressureà ¢Ã¢â€š ¬Ã¢â€ž ¢, expecting the market to continue to be à ¢Ã¢â€š ¬Ã‹Å"intensely competitiveà ¢Ã¢â€š ¬Ã¢â€ž ¢. He has also positively indicated that à ¢Ã¢â€š ¬Ã‹Å"people eat at home more rather than spending money on visiting restaurants.à ¢Ã¢â€š ¬Ã¢â€ž ¢ [29] Which will obviously falls in favour of the retail food market. Sainsburys has lost some of its share in the market recently and customers have been turning to cheaper supermarkets. In response the company launched their à ¢Ã¢â€š ¬Ã‹Å"Feed your family for a fiver campaign earlier in the year, championed once again by Jamie Oliver. The scheme seeks to provide customers with a range of h ealthy, fresh and tasty meal options for four people at a budget of  £5 or under. Another interesting point to note is that Justin King as declared food price inflation to exist at 2% with regard to Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s supermarkets, whereas the Office for National Statistics quotes the figure to be 6.6%. Time will only tell how Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s fair the recent storm involving the impact of the credit crunch. Sainsbury shares have also dramatically recovered after decreasing to 320p in March this year. But overall the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s high volume of sales and their cost efficiencies will help to ease any impact of investment in price and new salary increases. Primarily Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s has fought to focus on providing for the specific needs of the customer over the past few years and has succeeded in benefiting from those objectives. Bibliography Boyer, K.K, Frohlich, M.T, Hult,T.M (2004) à ¢Ã¢â€š ¬Ã‹Å"Extending the Suppl y Chain: How Cutting-edge Companies Bridge the Critical Last Mile Into Customers Homesà ¢Ã¢â€š ¬Ã¢â€ž ¢, AMACOM Div Mgmt Assn Financial Times (2008) https://markets.ft.com/tearsheets/performance.asp?s=uk%3ASBRY, Date accessed 12/09/08 Food and Grocery conference (2008) https://www.igd.com/cir.asp?menuid=22cirid=2563, Date accessed 12/09/08 Investment Advisory site article à ¢Ã¢â€š ¬Ã‹Å"Donà ¢Ã¢â€š ¬Ã¢â€ž ¢t Sell Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢sà ¢Ã¢â€š ¬Ã¢â€ž ¢, Rodney Hobson (2008) https://www.fool.co.uk/news/investing/company-comment/2008/05/14/dont-sell-sainsbury.aspx, Date accessed 12/09/08 Jivkov, M (2006) à ¢Ã¢â€š ¬Ã‹Å"The Week Ahead: Huge profits leap in store for J Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢ Independent Newspaper Knights, M (2005) à ¢Ã¢â€š ¬Ã‹Å"Sainsburys calls time on IT outsourcing contractà ¢Ã¢â€š ¬Ã¢â€ž ¢, Computing magazine MacArthur Foundation (1999) J Sainsbury Plc and the Home Depot: J. Sainsbury PLC and the Home Depot U. K. /U. S.: Island Press Walsh, F (2007), à ¢Ã¢â€š ¬Ã‹Å"Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s: a history in Picturesà ¢Ã¢â€š ¬Ã¢â€ž ¢, The Guardian newspaper Ibaraki, T, Nonobe, K, Yagiura, M (2005) Metaheuristics: Progress as Real Problem Solvers: Springer Wildman, M (1998) The BSE Inquiry / Statement No 166, J Sainsbury plc (2008), Flex News J Sainsbury plc: Three-Year Targets Exceeded https://www.flex-news-food.com/pages/16427/Sainsbury/j-sainsbury-plc-three-year-targets-exceeded.html J.Sainsbury plc (2003), Annual Report and Financial Statements https://www.jsainsburys.co.uk/files/reports/ar2003/pdf/annual_report.pdf, Date accessed, 11/09/08 J.Sainsbury plc: Investors Report: Company News (2004) https://www.jsainsburys.co.uk/index.asp?PageID=418news_filter=allYear=2004NewsID=489, Date accessed 11, 09, 08 J.Sainsbury plc, Company news (2005), https://www.jsainsbury.com/index.asp?PageID=322subsection=news_releasesYear=2005NewsID=531, Date accessed 10/09/08 J.Sainsbury plc, Corpo rate Responsibility Report (2005) https://www.j-sainsbury.com/files/reports/cr2005/index.asp?pageid=22, Date accessed 10/09/08 J.Sainsbury plc: Annual Report (2005) https://www.jsainsburys.co.uk/files/reports/cr2005/files/pdf/report.pdf Date accessed 08/09/08 J.Sainsbury plc: Annual Report (2006) https://www.j-sainsbury.com/ar06/overview/groupperformance.shtml, Date accessed 09/09/08 J.Sainsbury plc: Chief Executiveà ¢Ã¢â€š ¬Ã¢â€ž ¢s Operating Review, Annual Report (2006) https://www.j-sainsbury.com/ar06/ceor/ceor10.shtml, Date accessed 09/09/08 J.Sainsbury plc: Full Financials, Annual Report (2006) https://www.j-sainsbury.com/ar06/fullfinancials/summary9.shtml, Date accessed 10/09/08 J.Sainsbury plc-Financial Review Annual Report (2007) https://www.j-sainsbury.com/ar07/businessreview/financialreview4.shtml Date accessed 08/09/08 J.Sainsbury plc Governance Directorà ¢Ã¢â€š ¬Ã¢â€ž ¢s Report, Annual Report (2007) https://www.j-sainsbury.com/ar07/governance/ Date ac cessed 09/09/08 J.Sainsbury plc: Chairmanà ¢Ã¢â€š ¬Ã¢â€ž ¢s statement (2008) https://www.j-sainsbury.com/ar08/chairman/index.shtml, Date accessed 10/09/08 1 Footnotes [1] Boyer et al (2004) à ¢Ã¢â€š ¬Ã‹Å"Extending the Supply Chain: How Cutting-edge Companies Bridge the Critical Last Mile Into Customers Homesà ¢Ã¢â€š ¬Ã¢â€ž ¢, AMACOM Div Mgmt Assn [2] Wildman,M (1998) The BSE Inquiry / Statement No 166, J Sainsbury plc [3] (2008), Flex News J Sainsbury plc: Three-Year Targets Exceeded [4] https://www.jsainsburys.co.uk/files/reports/ar2003/pdf/annual_report.pdf [5] https://www.jsainsburys.co.uk/files/reports/ar2003/pdf/annual_report.pdf [6] https://www.jsainsburys.co.uk/files/reports/ar2003/pdf/annual_report.pdf [7] Ibaraki,T, Nonobe,K, Yagiura,M (2005) Metaheuristics: Progress as Real Problem Solvers: Springer [8] https://www.j-sainsbury.com/index.asp?PageID=322subsection=news_releasesYear=2005NewsID=531 [9] https://www.j-sainsbury.com/files/reports/cr2005/index.asp?pageid=22 [10] https://www.j-sainsbury.co.uk/files/reports/cr2005/index.asp?pageid=90 [11] https://www.jsainsburys.co.uk/files/reports/ar2003/pdf/an nual_report.pdf [12] https://www.jsainsburys.co.uk/index.asp?PageID=418news_filter=allYear=2004NewsID=489 [13] https://www.jsainsburys.co.uk/files/reports/cr2005/files/pdf/report.pdf [14] Jivkov,M (2006) à ¢Ã¢â€š ¬Ã‹Å"The Week Ahead: Huge profits leap in store for J Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢ Independent Newspaper [15] https://www.j-sainsbury.com/ar07/businessreview/financialreview4.shtml [16] https://www.j-sainsbury.com/ar07/governance/ [17] https://www.j-sainsbury.com/ar06/overview/groupperformance.shtml [18] https://www.j-sainsbury.com/ar06/fullfinancials/retailing.shtm [19] https://www.j-sainsbury.com/ar06/fullfinancials/retailing.shtm [20] https://www.j-sainsbury.com/ar06/ceor/ceor10.shtml [21] Miya Knights (2005) à ¢Ã¢â€š ¬Ã‹Å"Sainsburys calls time on IT outsourcing contractà ¢Ã¢â€š ¬Ã¢â€ž ¢, Computing magazine [22] https://www.j-sainsbury.com/ar06/fullfinancials/summary9.shtml [23] https://www.j-sainsbury.com/ar07/businessreview/financi alreview7.shtml [24] Fiona Walsh (2007), à ¢Ã¢â€š ¬Ã‹Å"Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s: a history in Picturesà ¢Ã¢â€š ¬Ã¢â€ž ¢ , The Guardian newspaper [25] Fiona Walsh (2007), à ¢Ã¢â€š ¬Ã‹Å"Sainsburyà ¢Ã¢â€š ¬Ã¢â€ž ¢s: a history in Picturesà ¢Ã¢â€š ¬Ã¢â€ž ¢ , The Guardian newspaper [26] Chairmanà ¢Ã¢â€š ¬Ã¢â€ž ¢s statement (2008) https://www.j-sainsbury.com/ar08/chairman/index.shtml, Date accessed 10/09/08 [27] https://markets.ft.com/tearsheets/performance.asp?s=uk:SBRY [28] Food and Grocery conference (2008) https://www.igd.com/cir.asp?menuid=22cirid=2563 [29] https://www.fool.co.uk/news/investing/company-comment/2008/05/14/dont-sell-sainsbury.aspx

Tuesday, May 19, 2020

Does College Prepare You For Life - 850 Words

Does College prepare you for life? Colleges and Universities are windows of knowledge that many people try to break, in doing so, people are ready for the next stage of their life. But not many have the option to go the world where knowledge is everything, and end being a simple worker all his life. People would judge a person for not having a degree, bachelor and many more. But do they ever think that colleges or universities are really preparing you for any jobs, does a piece of paper worth a lot now a days. Freeman Hrabowski wrote an article responding to people that think educations is a waste of time, and it is called â€Å"College Prepare People for life† (Hrabowski). In the article he mentions many positive thing about going to college and what is the outcome of going to college. But I believe that, he hasn’t done a very good job to explain why college is a good place to go prepare yourself for the real world. I believe that college is very important for our life , but not many of us know if we are really learning something while being in college. I feel like colleges or universities has become a place where we go just to go or try to earn a degree in any field. Therefore, I believe that colleges doesn’t enhance our basic skills, doesn’t give us a certainty of us getting a good job, doesn’t give us the hardships of the real world and it isn’t a place where everyone gets treated it equally. Colleges and Universities are places where we go and learn about us and what weShow MoreRelatedJiddu Krishnamurti s Concept That The True Function Of Education1351 Words   |  6 Pageseducation should be to prepare people for life. In addition, I will relate Jiddu Krishnamurti’s concept to my own personal life. As a result, one should agree that the true function of education should be to prepare people for life. By demonstrating the consequences of following the formulas society has given us and are expected of us to c onform to, Jiddu Krishnamuti’s The Function of Education suggests that the true function of education should be to prepare people for life by allowing people toRead MoreEssay on Is College Worth The Effort?883 Words   |  4 PagesIs College Worth The Effort? College has been a total waste of your time and money! Imagine telling that to a student who just finished four years of hard, grueling, expensive work; or, even worse, a parent who paid for their child to finish that same grueling work. But, in some ways, that statement can’t be any further from the truth. College can prepare a student for life in so many more ways than for a career. However, in the way that college is supposed to prepare soon-to-be-productiveRead More Uses of a College Education Essay801 Words   |  4 PagesUses of a College Education Is there really a difference between common sense and book sense? In general, common sense is that sixth sense or that survival intuition that has been given to every animal on earth. Therefore, common sense is literally an instinct or an advanced understanding about one’s surroundings. Many people think of common sense as intuition or wisdom that comes from living a life that exposes one to many different experiences and circumstances. On the other hand, bookRead MoreWhy People Choose The College That They Attend933 Words   |  4 PagesFour There are many reasons why people choose the college that they attend, but is a two year college better than a four year college? This is the question Liz Addison answers in her chapter Two Years Better Than Four (Pg. 255-58). Addison was enrolled in Virginia Community College, Southern Maine Community College, and Royal Veterinary College. She has two degrees; her first degree in biology and the second degree is from Royal Veterinary College and is now a veterinarian in Virginia. When discussingRead MoreMy Decision to Study Mechanical Engineering Essay824 Words   |  4 Pages I want to go to college because I know without a college degree, I would be going nowhere in my life. I want to pursue a degree in mechanical engineering; I have been dreaming about working as a marine surveyor since I was eleven years old. There are many reasons why I want to pursue a degree in mechanical engineering. One reason why I want to become a marine surveyor, marine surveying is my dream job; another reason is as a kid growing up I have always found it fascinating to create things andRead MoreCritical Analysis : Senior Year1320 Words   |  6 Pages2016 Throughout the pass centuries college has been a controversial issue all around the world. â€Å"Will you go to college, which college will you attend and why,† are questions that seem to attack all of high school seniors. Senior year is one of the most important years of the high school journey. Why? 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