Off to college!

So, you’re out of school

…and off to college. Congratulations! Order a pizza! Treat yourself to a tub of Haagen Dazs.

But wait — isn’t college just a different type of school?

Well, yes and no. Yes, you’ve got loads to study, and it isn’t going to be easy, either. But hey! — you don’t need to wake up at six in the morning anymore, classes are thoughtfully interspersed with snack breaks and you get to meet a whole bunch of cool people.

Best of all, you’ve seen the last of that awful uniform!

Year One

Freedom:

Your newfound freedom is going to take some getting used to, but are we going to tell you to behave yourself? Nah! Have fun, by all means! Just remember what you’re in college for, and don’t miss too many classes ;).

Money

It’s easy to get caught up in the fashionista race in college, and you’ll want to be hip at all times. But whatever you do, don’t use the college fees your parents are slogging for. If you insist on only the best styles, get a part-time job.

Independence

You also have to start taking charge of your own life, now. No one is going to punish you for not finishing your homework, but that doesn’t mean you don’t have to do it. (Most of the time, anyway).

Year Two

Freedom:

If you partied all through Year One, now is when you should wizen up. No more late weeknights and missing class the next day.

Money

By now, you’ve probably realised that there is no such thing as easy cash — you’ve learned one of life’s bitterest lessons. Good for you! Now, why not start saving a little towards the semester hols?

Independence

Start asking yourself how far behind you are in your studies, and take measures to curb your lag. Get to know your library better. No more doodling whilst your lecturer explains the wonders of Keynesian economic theory. And absolutely no more SMSing at tutorials!

Year Three

Freedom:

Typically, this will be Exam Year. You shouldn’t be going out much at all — yes, that means no shopping and no clubbing. College is about studying, nor partying.

Money

Anxiety is murder on the pocket, as you start drowning your exam fear in Chachos and (admit it) chocolate. Then again, you should be saving on your shopping binges. Keep a loving eye on your savings, and add to it — it’s going to be your reward for getting through this tough period.

Independence

Remember how teachers used to give you reams of sample test papers in school when your exams were round the corner? They served a purpose, you know. This time around, though, you have to plan your own training schedule. Good luck!

In the College Life series:

• College life: new freedom, new independence
• College life: new friends, new rules
• College life: your body, your health
• College life: boys, boys, boys!
• College life: study hard, study smart
• College life: fun, fun, fun!

Can't buy yourself friends, oh no.

It is sad that our attitudes to moolah should change so much between childhood and adulthood. For some of us, the few things that money cannot buy aren’t worth having anyway. At least Jessie thinks so, and when she had had enough of a couple of her friends freeloading off her, she told them in no unsimple terms to take a hike.

“Of course, they started accusing me of being a lousy friend,” says Jessie, 24. “They said I was selfish. Can you believe that? After all those buffet lunches and Starbucks treats!”

Some of you may be jumping at her injustice right now, agreeing with Jessie’s friends: if she’s keeping count of those treats, then she isn’t sincere anyway. But Jessie argues that she didn’t really care about the money. Rather, she was upset at the way they did it: they would ask her out, and expect her to pay. Jessie didn’t mind at first — their boldness was endearing. But then, when she had to turn them down on a couple of occasions because of other appointments, they accused her of being tight-fisted. And that’s what really ticked her off.

“I think that that was when I realised that I was a friend of convenience,” Jessie says. “As long as I could treat them, I could be their friend. Otherwise, our friendship meant nothing.”

Such ‘useful’ alliances are not uncommon, especially in the city. People are always befriending other folk because they think they might get something out of it — a useful career contact, maybe. Help with the authorities. Business opportunities. No one can honestly say that they are not guilty of at least trying to get close to someone for their advantage at some point in their life. But if both parties know what the score is, then no one gets hurt. It’s when one party believes that she really has a true-blue friendship going that things can go sour.

Michael Wano, author of Refill for Life, thinks that Jessie made the right move by ditching her friends, especially considering the way they took her for granted.

“The Beatles once sang, ‘Money Can’t Buy Me Love,’ and how right they were,” says Mr Wano. “If your friends are freeloading, they may also short-change the love and care you deserve. And you should never short-change yourself.”

Bill Cottringer, author of You Can Have Your Cheese & Eat It Too, agrees, but thinks there is a little more to it: “People generally don’t like to talk about money matters, especially when they need to most,” he says. “You should approach this uncomfortable issue directly and assertively, sharing your values and inability to finance someone else, as you may be having a difficult enough time taking care of yourself!”

Can’t buy you friends, either

But what if the friendship is sincere, but the circumstances too demanding? Although friendships between two people of vastly different income brackets are rare, they do exist. Carol was best-friends with the wealthiest girl in her form throughout school. But when they started going to college, things got difficult. Zafina dined at posh lunch venues. Her make-up was Mac, and her shoes were Manolo’s. She could afford shopping every other day, and never went home without buying at least one new blouse.

Carol tried as best she could to keep with Zafina’s spending habits, but she soon found herself reduced to Chinese takeouts three times a day just one week after she got her monthly allowance. Every second week, she was forced to call her poor dad to ask him for more money. She is embarrassed to admit it, but she thinks that it was only then, at nineteen, when she really learned the value of money.

“Zafina was disappointed when I started having to turn down her extravagant proposals towards the middle of every month,” recalls Carol. “She went shopping with other rich girls, and I remember feeling very hurt about that. But she never ditched me.”

It turns out that their friendship was stronger than that. Although Carol did accept Zafina’s treats occasionally, she refrained from becoming the freeloader that Jessie’s friends were, and paid her back in kind whenever she could. Zafina soon learned to appreciate cheap breakfasts, found that she could do without a new blouse every week. All in all, she discovered the joys of the simpler things in life… all thanks to Carol.

“If your friends cannot see and enjoy the beauty of little things, all of the wealth in the world will still leave them empty,” says Mr Wano. “Memories are not material. When we think about the joyous times in our lives, more often than not, they are about the people we were with rather than where we were or what we were doing. Friendship is paid for with caring and love. Not money.”

A girl’s best friend

Carol says that there is no price on the friendship she shares with Zafina. It is one that has weathered many complications like this, precisely because they come from such different backgrounds. She is smart enough to recognise that whereas any most rich kids would have dumped her in favour of someone more their equal (financially, that is), Zafina didn’t. And there is no way you can put a price on that kind of loyalty.

“There will probably be more tests of our friendship in the future,” says Carol hesitantly. “But I hope we’ve passed the worst, and I’m very glad that she’s stuck by me.”

Not all stories like Carol’s end so happily, of course. In fact, if we put our minds to it, we can probably all remember being subtly rejected by someone who thought we’d never be able to live the life they do. Dealing with this rejection is especially hard when you know that it’s not really your fault you were not born wealthy — it makes it seem all the more unfair. But, putting things into perspective, those rich kids didn’t ask to be born wealthy, either.

In an ideal world, being a girl’s best-friend should have nothing to do with money. But history, culture and society combine to make us aware of the obvious cost of poor friendships, blinding us to their hidden value.

“Friends are good for you,” writes Michelle Casto, a WholeLife Coach and author of the GetSmart! (www.getsmartseries.com) series of books. “They make you laugh, give you hope and encouragement, and lighten the load of your life.”

Admittedly, some friendships are probably not worth a cent. But they still cost nothing to foster, making them one of the best things life has to offer.

“Friendship is free for the creating,” continues Ms Casto. “All you have to do to get a friend is to be one. And that special bond of friendship makes for a wonderful life.”

Money makes people smile.

Sound familiar? The sudden explosion of Get-Rich-Quick schemes that have spread over the Internet have made it a billion dollar industry. In society’s impatience to get ahead and move up, some have taken the opportunity to exploit the rat-race. Thousands of people have been cheated out of millions of dollars, time and effort; relationships have been severed and friendships broken as a result of the cunning and masterful tactics of marketers and conmen, who prey on the one of the fundamental characteristics of humankind: survival.

But whilst dozens of companies are involved in these schemes illegally, they have also tarnished the reputation of the few legitimate businesses that offer legitimate career opportunities. But who can tell? Quite simply, if it sounds too good to be true, then it probably is.

The Ponzi Scheme – A Lost Investment

The 30% Interest Investment!

How’s this for a quick buck? – I take $1,000 from you, and promise you $1,200 in three months (12 weeks). That’s an unheard-of interest rate of 80% p.a. Interested? Read on.

In one week’s time, I convince your friend to do the same. I now have $2,000. Word gets around about a ridiculously easy way to make money overnight. I collect $20,000 from 20 investors.

When your money is due, I happily give you back $1,200. I keep my promise. You’re pleased. You invest again, also at the agreed quantum of 20% interest in three months’ time. I take $5,000 from you. My bank balance now = $20,000 – $1,200 + $5,000 = $23,800.

But then something goes wrong: unemployment spikes, and my ‘investors’ want their money back. Two have fulfilled the 3-month period. I give all the other 18 investors their deposits back, no interest. Bank balance is now $5,800. I give the last investor his due $1,200, and avoid your calls. Why?

Because my bank balance now stands at only $4,600 – you’ve lost $400… if I’m nice enough to return it all. Otherwise, you’d have been relieved of all $5,000, and I’d be on the next flight to Phuket.

That was a best-case scenario, one in which I was kind enough to give back investors’ deposits, leaving them (for the most part) untouched. Ordinarily, I would have been using my bank balance’s funds to support myself, eating into your deposit. A sudden flood of withdrawals from the scheme would have resulted in losses for everyone. In fact, you’d probably never see me again as I take to the hills.

With the Ponzi scheme — also loosely-termed Deposit-Taking Schemes — money appears to be made because of large funds that will support individual ‘matured’ withdrawals. Early investors are paid with the money of later investors, with interest. But it always runs at a deficit, and should all participants want to get their money back immediately, the scheme crumbles. It lasts as long as people continue to join and there is a constant inflow of money… or as long as the operator sticks around.

Either way, you rarely see your dosh again.

The Pyramid Scheme – Get In On The Ground Floor

Don’t want to work anymore? Become a member of my little company, and if you work hard, you’ll be able to hang your boots up and retire in a year. Sounds too good to be true? I’ll prove it.

I’m recruiting ten ‘members’ as part of my organisation. You each pay me a ‘nominal’ $1,000 joining fee. My bank balance is now $10,000.

In order to benefit from my idea, my ten members (‘downliners’, in marketing-speak) have to each find ten members to join as their downliners. You get $500 for each member signed up as a commission. I get the other $500.

You all succeed, and your bank balances now stand at $5,000 each. You’ve made a cool $4,000; I, on the other hand, have just topped by my bank balance by another 100 x $500 = $50,000. I have now made a profit of $60,000 from my little company. You are happy; I am happy. Now the real fun starts.

Your downliners (the third generation) have to each find ten members each. By some miracle, they all succeed, recruiting 1,000 members collectively, each paying the $1,000 fee. $500 goes to your downliners for their hard work; $250 to you, as their ‘upliners’, and the other $250 to me. My company now has 1,111 people involved. Bank balances now stand at: you (2nd level) = $30,000; your members (3rd level) = $5,000; Me (1st level) = $310,000. You’re positively ecstatic. So are your members. I encourage all of you to tell your friends and family to ‘get in on the ground floor’, because we’re going to keep growing and growing. (Keep in mind that I have done nothing since I recruited you, except maybe play computer games).

You scour the city you live in, approaching everyone you know – friends, family and distant relatives. Many agree, and you ‘refer’ them to your downliners’ downliners (the 4th level in my plan). But there are now 1,000 new members looking for a further 10,000 members.

If the newly-recruited 1000 manage their momentous task, I’d have 11,100 members; then 111,100 members; then 1,111,100.  My little company would be bigger than many governments. But that won’t happen.

Instead, my scheme begins to fall apart at the 4th level, and people quit left, right and centre. The market is saturated. But why should I care? My bank balance, after this latest wave, stands at $435,000.

Is it legal? Take the test!

This is a test devised by Jon M. Taylor, PhD of the Consumer Awareness Institute of the US. Before taking part in any scheme which promises unlikely returns, you should ask yourself these questions:

1. Deposit – If you’re asked to put anything other than cash down, sound the alarms. This is an almost positive sign of something being amiss.
2. Interest – Anyone who claims that they can make your money earn interest at rates much higher (20% and up) than banks (usually between 4 – 8% p.a.) falls under suspicion.
3. Opportunity – Were you asked to participate in a scheme because of the great products or because of the ‘opportunity’? Any company or person that puts opportunity before product is suspect.
4. Product – If there is product-selling involved, then carefully scrutinise the products and ask yourself if they’re really worth the price-tag. If you think they’re over-priced, start worrying.
5. Compensation – Do some calculations, and see if you can make a respectable income by just selling the products alone WITHOUT having to recruit downliners. If it’s paltry, then it’s not genuine.
6. Income Disclosure – People will hype the incomes of certain distributors as an incentive for you to join. Make them prove it.
7. Credibility – Many people use fantastic testimonials to lure you in. Beware, as many of these testimonials are paid for. Verify them first.
8. Support – Are you expected to pay for company training material (audio/video tapes, manuals etc.) or does the company sponsor them. If you have to pay, that’s just another way that they make money.
9. Gut – The best test is to ask yourself if you feel pushed or pressured. Offended? A good opportunity will not disappear. Don’t fall for the ‘get in on the ground floor’ trick.