Business Innovators Radio - Interview With Rick Mosley, President of Black Pearl Insurance Solutions – College Planning Tips

Episode Date: August 16, 2023

Rick is an insurance executive with a wide breadth of experience backed by a 20+ year record of delivering solid improvements in operating efficiency, productivity, and overall financial performance in Fortune 40 affiliated insurance companies, Rick Mosley has spent his career finding money where others could not. While providing over $1 billion in revenue for his employers he uncovered how tax-advantaged income benefits businesses and, by extension, individuals.Black Pearl is offering a free book on Social Security retirement strategies ($15 value) for the first 10 people to schedule consultations.Learn more: https://www.myblackpearl.co/T: 1-310-974-3255Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-rick-mosley-president-of-black-pearl-insurance-solutions-college-planning-tips

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of Influential Entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have with us Rick Mosley, who's the president of Black Pearl Insurance Solutions, and we'll be talking about college planning tips. Rick, welcome to the program. Good morning, Mike, and thank you. Glad to be here.

You know, I think we could probably talk for like a full three-day weekend workshop on college planning tips. So we'll dive in with jumping with both feet because I know this is such a relevant topic. You know, you hear statistics like the average student gets done with college with X amount of student loan debt, which is staggering. And then you think, hey, and those people that graduated with that staggering, student loan debt are going into the educational field to teach, you know, high school and their average salary is unbelievably low. So there's something going on in, you know, education where things just don't line up. So I know that if you can help your clients and us understand some of these considerations, it's going to really help out financially. So where do you start

with your clients helping them to understand, you know, this whole concept of planning for college. Well, before we even get to that stage, you know, we really have to take a look at just, you know, the state of higher education and the cost of higher education in general. You know, just recently, there's been some recent articles that have been published. And the number that's out there right now is that it's cost $40,000 a year for a top graded private school. So you have $40,000 per year. So if your student or your child is going to that particular school for four years, you know, that's $160,000. And when you take a look at an Ivy League school, such as Harvard, that amount, it jumps again, goes up to about $57,000 a year. And that's not even

including housing, books and other cost-to-living expenses, which when you factor them in, increases the number further to $95,000 a year. So, you know, as parents, we are dealing just with this huge number that many people don't know how to overcome. You know, from 1980 to 2020, tuition is increased by 169%. But when you look at median wages for young adults during that same period, the increase has only been 19%. So, you know, so before we could even get to that discussion, you know, we just have to, you know, bottom line, you know, just throw it out there.

College is expensive. And, you know, according to certain reports, parents can expect to cover about 57% of the cost. And, you know, so how do this? And when they find this question, when they ask this question, when they ask this, question, that's when they end up coming to someone like me so that I can help them, you know, identify ways to reduce that cost and to make it so that it's somewhat, you know, easier on them financially and it doesn't eat into the retirement or other assets. You know, and that's the, I probably will put you on the spot asking this statistic,

but what's a, what's an average stat on this? What percentage of college age people, students, go to college? these days. So where I'm going with it is, you know, hey, my child is graduating high school in a month and they're not going to go to college. That's probably a very small percentage of time. So in other words, when we are throwing out numbers like the cost of colleges X, it's probably going to hit your family if you've got students that are, you know, heading toward that age group, right? That's correct. That's right. Yeah. Statistic-wise, I'd have to, you know, do some researching it back to you, but I can tell you that.

it's a lot. Overall, the numbers aren't down because of the financial concerns, financial considerations. People do not want to go into, you know, long-term debt, everlasting debt in order to, you know, in order to obtain a college education. But when you have a proper college planning program in place, you know, you can't bring that number down. And that's, you know, and that's very critical, having that financial plan in place and having the ability to bring that number down. A lot of people think I'm planning for retirement, so I've got to have all my ducks in a row and all this. And then they don't think about some of the things that can poke holes in the bucket like taxes or inflation, things like that or expenses. But college, that's a chunk of time that is coming. And if you've got more than one child, then start multiplying. And it's something that needs to be planned for because if the parents are going to help out as much as possible, it's going to hit the retirement plan. Oh, definitely. You know, when someone has a kid or someone has a child, you know, and I'll be honest, I was in this boat myself. You know, I thought, okay, you know, college, oh, that's a long time away.

That's 18 years. But before you know it, in the blink of an eye, you know, it's there. And you have some parents out there that have tried to, you know, put assets into 529s and set other assets to the side or aside, rather. But, you know, by the time, because if you don't account for inflation. By the time the student becomes college age, sometimes those funds are not enough and they're insufficient. 100%. Well, what are some of the things that people can do? And I know that there's myriad ways that you can do this. But what are the first places that you would start in planning for these college planning expenses coming up? Well, first off, I think what's critical is that people keep

in mind that there is financial aid available. And the FAFSA is a very important application that needs to be completed. That needs to be completed annually. And FAFSA, what that stands for is the free application for student aid. And what it does is it determines student eligibility for financial aid in the forms of grants, loans, or work study programs. Now, for every year that year in college, it needs to be completed. And the application that has to be submitted October 1st or late. for the following school year. So, you know, the site to go to in order to complete the FAFSA is FAFSA.gov.g. And completing this form is extremely important when it comes to calculating your EFC.

Now, when you're completing the FAFSA, there are some common mistakes that people make that you want to watch out for. So, you know, when it comes to making, reporting your net worth, you want to make sure that you report it correctly. there's a lot of net worth mistakes that people make where they overreport their number and that can throw off their EFC. You want to make sure that you use your gross income or excuse me, use your adjusted gross income versus using your gross. Do not use your gross income when reporting it. Also, when it comes to home equity, you do not need to put that information on the FAFSA

because doing that will also overstate your assets. And just overall, just making certain asset mistakes in reporting such as in your 529 a custodian accounts, et cetera, those could also lead to some issues with your FAFSA as well. Now, you mentioned EFC. What does that stand for? And how does that impact the planning? Now, that's a great question. EFC, that stands for expected financial contribution. And, you know, for me, it's a critical figure that you need to get right. And what it is, it's a number that the government uses to calculate the amount that they think that you can afford, and by you, I mean the student and the family, that you can afford for college. Now, the federal government uses over 74 factors to

determine EFC, but the top six that are used for EFC calculations are parents' income, parents' assets, students' income, students' assets, the number of people in the household, and the number of students attending college. You know, I think that what you just mentioned there, like when you're saying use adjusted gross versus gross and that could have impact EFC. Well, that also impacts the financial aid, right? Because that FAFSA form is filled out. And then that's what then the schools and then grants and scholarships and opportunities, they go off of that form. So if you put in a number that is true, but maybe not necessary, you know, it's like, hey, I put in my home equity, it's not necessary. But now that factors into the calculation, doesn't it? Yes, that's exactly correct. In fact, I have

some examples of families that I've helped. For example, I have this one family where it was a family of four making a modest reported income of about $55,000 a year. When they first completed or initially completed their FAFSA, their expected financial contribution was calculated at $16,000. However, after we were involved and we helped them and we took a look at the numbers that they were reporting and we reviewed their documentation, We were able to assist them with updating the FAFSA, which reduced their EFC or expected financial contribution, down to $4,176.

So that's for, you know, a family income of about $55,000. Now, there's some misconceptions also out there when it comes to financial aid. You know, people think that financiality is only, you know, for people. If you're a high income earner, financial aid is not for you. That's not true. Definitely not true. If your grades are too low, financial aid is not for you. is also incorrect. If you own a home, financial aid is not for you. That is also an untruth.

It's also a misconception that financial aid is only for special groups. And based on this conversation, it's also a misconception that it's an easy process. And another misconception is that people at school can help you as well, because a lot of them, these counselors are overwhelmed. Now, when it comes to the income being too high, as I said before, that is not a barrier to financial with another one of my examples, I have another family that I work with, and they had a much larger adjusted gross income of $467,000. And it was a family of four. And they had some pretty decent assets, you know, taxable assets of about 360,000, home equity,000. And when this family completed their FAFSA, their expected financial contribution, it can.

came out to be $78,000 initially, which, I mean, that's a large amount, even for our family making that amount of money. However, we, you know, stepped in. We assisted this family, and we were able to get their EFC down to $11,000. And we were also able to get them a financial aid award of $21,000 as well. So the EFC, like I said, getting that number is very critical because it reduces what you expect to pay out of pocket. And, you're not a lot of And it can also impact our financial aid awards as well. You know, you went through several of those misconceptions, like a lot of people think this, that's not the case. College planning and making financial moves sounds to me like it's not something you could just Google, download a document, fill out this, and yep, you've maximized everything.

So what are some of the things that you do at Black Pearl that you work with your clients on that helps them really optimize this process? That's a great question, Mike. So at Black Pearl, we do several things, but in our college, with our college planning team, we have what we call our college planning process, which is based on three pillars. With these three pillars, what we try to do, or what we do is, you know, we work with the student to get them accepted. We work with the student to get them financial aid, and we work with them to fund the cost. Now, the way we do this is by, once you, you know, partner up with us, we explore your student's career. interests, your skills, their skills, their dream colleges in academic history. We also work with

the family to take a look at their out-of-pocket costs and contributions toward the students' college education. In addition to that, we analyze the financial goals and the challenges that they'll be facing. And then what we do is we review their current strategies, the family's current strategies, to see how they can afford the student education. So we do this, we set it up, we do all those things initially, and then what we do on a monthly basis, or sometimes weekly basis, depending on the need. If we go back and we work with both the students and the family to identify the colleges that are going to be the ones that are ideal for them, and also to develop a plan for funding that college as well. Yeah. So is there any examples that you can give on maybe working

with a student that you were able to get some of these accomplished? Oh, definitely, definitely. So, you know, there's one student that we were working with. He had an SAT score of 1,200. And he was being considered or looking around about 11 different colleges across the country. And with this student, we were able to, you know, like I said, we were able to assist his family with updating and properly reporting their EFC. So with this family, and this is going back to the family where that I was talking about earlier. one of them, where we were able to get the EFC down to $4,000 a year, which was significant for this family.

And for this particular student, they received, they were accepted to the University of San Diego. And they received a financial aid award package of $42,000. So I would call that a significant, a huge. Yes. Yeah. Yeah, that's pretty big. And now, and then with the other family that I referenced earlier, you know,

For this family, the son was a business management major. SAT score 1388. They were considering approximately 24 colleges. And this was the offspring or the son of the high-income earner family, where we were able to reduce the EFC down to $11,200. With that particular student, we were able to get him into Baylor University with a financial aid package of $21,000, almost $22,000. And this is for a family that has family income of $467,000.

So that's why I say the FAFSA and EFC, you know, making sure that that information is accurate is extremely critical. And doing that is critical in order to, and to making sure that you're able to, you know, get a package together where you receive financial aid and you're not paying, you know, full price for college. Yeah, that's a really good point. And also, I think that you had mentioned previously that you are working with a family member. Your son is going through this. And so you're applying these concepts to your own family. Exactly. I sure am, Mike. So I currently have a, myself, I have a senior. He's going to be a senior this year. He's going into a senior year. And we've been doing this ourselves. We've been doing the college trips. We just recently came back from a two-week trip on the next. East Coast. He was invited out there actually for some football camps because he's a student athlete. But a couple of little football schools that are interested in him are Ivy Leagues. One of them is Harvard. Another one was Brown. He had a chance to actually play on both fields. I'll tell you, the Harvard field is very impressive from a historical standpoint.

I won't go there right now. Yeah, that's another story. But that's a field. Awesome. That's a factor, though. That goes into choices, doesn't it? It does. It does go into making sure that they're comfortable with the environment and the area and everything. So, you know, we've checked out these schools. We visited those schools, Penn, Penn State, you know, multiple schools is down in the south. And we just had a very, you know, enjoyable trip. It's expensive, as you know, but it was quite enjoyable. But, you know, when it comes to the Ivy League schools, and I'm not sure of everyone, you know, listening to this who knows this, but even if you are a student athlete, the Ivy League schools do not provide student athletes with student, with athletic scholarships.

It's all based on academics. So, you know, so even if he is accepted to Harvard or he's accepted to Brown, you know, this type of college planning, which I'm sharing with everyone else, this is, I'm currently doing it with my own son. Because if he gets accepted either one of those schools, he wants to go there, you know, I'm going to be the one that has to fund it. And I want to make sure personally, even for my family, that you see the best financial aid package possible and receive the, you know, the best or the lowest EFC that we can. You know, being in this business, you know how it is. I mean, I'm fortunate that I have an inside view of it.

But even, you know, having an inside view of it with all of these other things going on, I'm just as busy as any other parent trying to juggle all these things. I'll tell you that if it weren't for the team that I'm utilizing, even for my son's case, I don't know how I would get it done with all this travel. It's been very overwhelmed. Yeah, huge point. Well, you know, it's just I think the big thing that we'll just reiterate here is the fact that this is something that you cannot do on your own. You could try, but what if you miss something? What if you do something not as optimal and you leave money on the table or things fall through

cracks kind of a thing. So I think that's a big opportunity just to keep in mind that way. So what are some final thoughts on college planning tips? And then let us finish up with how can people learn more and reach out, connect with you to see what you could potentially do to help them. Okay. I'm glad to do that, Mike. So if you're listening to this interview, I mean, it's going to be a parent that you care about your college, your child's college aspirations. You know, if they're going into either ninth grade or 10th grade this year. Now is definitely a good time to start working on college planning, you know, as you heard us say earlier in this interview. College planning is even more important if you're in the 11th or even going into 12th grade. So once you become a senior,

the deadlines, they start. That's when they start. And getting the right assistance during that senior year is extremely important because if you don't and you miss certain deadlines, there's money that you can leave on the table. And you may end up paying full price for college. So regardless of of income, assets or GPA, getting the appropriate EFC is key to making that happen. And without it, you or your family may end up sacrificing either retirement funds or other assets to pay for college. So if you're motivated, if you're serious about college, you're from a friendly family and you have parents who are serious about money or retirement, I urge them to take action today. You know, don't delay. Get moving on it because if you don't, you know, someone else

who's already doing the planning, they will, and they'll get access to the funds that you've left on the table. So that's my closing advice. So, you know, my name is Rick Mosley, Black Pearl Solutions is my company. We are at MyBlack Pearl.co, and our phone number is 818, 9-18-4-6-44. And my personal email is Rick, R-I-C-K-M-O-S-E-Y, at My Black Pearl.co. So if anyone has any questions, please feel free to reach out to me and I'll see what we can do to help you and your family. Excellent. Well, Rick, thank you so much for coming on.

It's been a real pleasure learning some of these tips from you. It's my pleasure, Mike. You've been listening to Influential Entrepreneurs with Mike Saunders. To learn more about the resources mentioned on today's show or listen to past episodes, visit www. www.influentialentrepreneursradio.com.