Prudent economic and financial planning has become more important than ever for graduating Boston University students.
Professor Laurence Kotlikoff addressed the importance of foresight while speaking about his book, ‘Spend ’til The End: The Revolutionary Guide to Raising Your Living Standard — Today and When You Retire’ at the BU Barnes & Noble to around 20 attendees.
Kotlikoff’s insights gained special urgency for the student population amid the New York Stock Exchange’s $1.2 trillion loss Monday, event coordinator Jeanne Haight, said.
‘Everyone is worried about the economy and their money, so I am sure they will want to learn about the new ways to save and protect their income,’ Haight said. ‘I think that ‘Spend ’til the End’ offers some insights and challenges conventional wisdom about finances.’
Kotlikoff’s book corresponds with a financial planning software program that he designed with co-author Scott Burns. He developed the program just five years ago with the help of investment and support from BU.’
The software uses two programs that ‘talk’ to each other to come up with a financial solution to achieve a desired living standard, he said.
He said the financial industry has provided contrasting advertisements, some of which seek to sell a product, while others recommend saving without providing the tools to do so, a mixed message he termed ‘malpractice.’
‘They urge us to set targets that are so high, and tell us to save every penny today,’ he said. ‘Then, they want you to invest in their mutual funds. There is not a single piece of financial planning advice that is correct.’
The programs use factors including a family’s income, number of children and mortgage payment as well as a tax increase feature to anticipate future changes in financial planning, Kotlikoff said.
‘My software helps smooth and protect your living standards, and price your passions,’ he said. ‘The book helps tell you how you can raise your living standard. A lot of it is about making money by finding out when to walk across the street.’
Kotlikoff also addressed the current economic crisis during the discussion.
‘The whole industry is full of con-artists,’ he said. ‘The government allowed this to happen. Every major investment company went under, and banks are being reorganized. I think they will pass this [revised] bailout . . . and we’re going to be OK.
‘I hope, after the election, the next president forgets everything he’s been saying, and starts with a clean slate . . . and gives me a call,’ he said.
The program was designed for people between 40-and 60-years old, Kotlikoff said after the event. He said he thinks students can use it when they decide whether their anticipated careers will support their desired living standards.
College of Communication junior Ayesha Aleem said she did not think the book or the program were pertinent to her current finances.
‘At the moment, I’m just not dealing with the kind of money he’s talking about,’ she said.
College of Arts and Sciences sophomore Deenah Shutzer said she does not fully understand the economy, but is optimistic about the future.
‘With the election, a lot of change is coming,’ she said. ‘History shows that things can get really low, but then go up again, so I’m not too worried.’