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September 5, 2000

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by Edmund Tsang

I became a father for the first time last April. The experience has truly opened my eyes to the joy, wonder, and mystery of life. It has also made me a target of advertising, with some playing on the fear and concern that is part and parcel of parenthood -- how to be a good provider and protector of one’s offspring.

One such letter arrived the other day, informing me, in the format of a bulletin, that "in 18 years, when that cute toddler is college-bound, a public college education may cost more than $40,000 per year," and that "rapidly rising college costs that threaten to balloon further well into the next century -- putting the educational future of their children at risk."

The brochure then advertises, "College tuition seems staggering to many investors. But how about $100 a month?", complete with a scheme showing how much that monthly saving of $100 can become, when that cute toddler completes high school and is ready for college. Well, what responsible parent would purposely put "the educational future of their children at risk," especially with a "College Investment Plan" that working folks without any inherited wealthy seem to be able to afford?

It turns out that you really cannot take part in the "affordable opportunity" in the way the brochure states with bold letter: "just $100 a month." A person from the company that sent me the slick package tried to explain to me the reasons why that "$100 a month" won’t allow you to take part in the "affordable opportunity," but I found her explanations, delivered full of jargon and in a tongue-twisting manner, confusing and seemingly contradictory to the information described in the brochure, which led to more questions. I consider myself to possess average intelligence -- I have a Ph.D. in engineering and a reasonably good grasp of the English language -- and I thought I could read a brochure and comprehend the information described therein. Exasperated with my many questions for clarification, she finally informed me that the "strategy" described in the brochure "is an IRA," even though I told her the way an IRA works would not let it do what the brochure says. Furthermore, I told her if she performs a search of the entire text of the brochure in question, she would not find the word "IRA" or a single mention of it.

Both of this year’s presidential candidates, Al Gore and George W. Bush, want some part of the Social Security monies invested by the individuals planning for their retirement. If they cannot afford their own financial investors, would the general public find investing the modest amount of money they plan to set aside every month for retirement any less confusing and/or easier than my own experience with the "reputable" investment firm telling me how to save for college for my son?


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