Expert: Dr. Joseph de Beauchamp - 7/2/2005

Question
Dear Mr. Beauchamps,

I about to start my MBA in the Fall - a huge departure for me as I have been in the field of education for the last seven years.  As I'm sure you know, b-school is very expensive and I am taking out almost $50,000 in student loans just this year to make my schooling possible.  I recently found out that I was given an entrance award of $10,000 (a big sum at a canadian school...) and so my question is this:

Is it smarter to take all the loans that I can (since they are interest free until I graduate) and invest the grant money or to take fewer loans and use the grant money supplementally?  If I did make a small investment of 5-10 thousand dollars, what is the safest way to get a decent return?  I don't think I can afford a risky investment in a stock considering how little money I have.

Any advice would be much appreciated.

Thank you!

Ellie Avishai

Answer
Ellie,

Hold the cash in liquid funds. Things are unstable now, and not certain to make money. I view the market as bearish for the next ten years. The last 6 years: most people have lost vast amounts of money in the market.

I teach in the doctorate level in education and business. I think you are doing well to go towards business. Education is big business now. I believe educators need more business background. Loans are a good way to pay for school, and look for grants and scholarship also.

Dr. Joseph de Beauchamp