Markus Andrews

After the Supreme Court blocked President Joe Biden’s first plan to forgive student debt, his administration set out to create a relief package that would survive legal attacks.
Here’s why the U.S. Department of Education thinks the revised plan will endure.

US President Joe Biden speaks about student loan debt relief at Madison Area Technical College in Madison, Wisconsin, April 8, 2024. 
Andrew Caballero-Reynolds | AFP | Getty Images

The aid package is narrower

Biden’s 2020 campaign promise to erase student debt was thwarted at the Supreme Court in June.
The majority-conservative court ruled that Biden didn’t have the authority to erase $400 billion in student debt without prior authorization from Congress. Biden had tried to forgive the debt of nearly all 40 million federal student loan borrowers, with many people getting up to $20,000 in cancellation.
This time, the Biden administration has narrowed its aid by targeting specific groups of borrowers, including those who’ve been in repayment for decades or attended schools of low-financial value. It hopes this will help the plan survive in front of a court that is skeptical of broad loan cancellation, experts say.

More than 25 million borrowers still stand to benefit from the program.
As a result, for critics of broad student loan forgiveness, Biden’s new plan looks a great deal like his first.

After the president touted his revised relief program on April 8, Missouri Attorney General Andrew Bailey, a Republican, wrote on X that Biden “is trying to unabashedly eclipse the Constitution.”
“See you in court,” Bailey wrote.

There’s a different legal justification

In addition to the fact that this effort is a more targeted aid program, the U.S. Department of Education is also using a different law — the Higher Education Act — as its legal justification. Biden’s first forgiveness plan was based on the Higher Education Relief Opportunities for Students Act, or HEROES Act, of 2003.
The HEROES Act was passed in the aftermath of the 9/11 terrorist attacks and grants the president broad power to revise student loan programs during national emergencies. The Biden administration initially tried to use this law because, at the time, the country was under national emergency status from the Covid-19 pandemic.

However, the conservative justices didn’t buy that argument.
Chief Justice John Roberts wrote in the majority opinion for Biden v. Nebraska: “But imagine instead asking the enacting Congress a more pertinent question: ‘Can the Secretary use his powers to abolish $430 billion in student loans, completely canceling loan balances for 20 million borrowers, as a pandemic winds down to its end?'”
“We can’t believe the answer would be yes.”
The HEA, which the Biden administration is now using, was signed into law by President Lyndon B. Johnson in 1965 and allows the Education secretary some authority to waive or release borrowers’ education debt.
When Sen. Elizabeth Warren, D-Mass., was running for president in 2020, she pointed to the HEA as a law that would allow her to deliver sweeping loan relief.
“This authority provides a safety valve for federal student loan programs, letting the Department of Education use its discretion to wipe away loans even when they do not meet the eligibility criteria for more specific cancellation programs,” Warren wrote in her student loan forgiveness proposal back then.

Biden administration is using rulemaking process

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The federal tax deadline was April 15, and if you missed it, you should file your return and pay your balance as soon as possible.
If you still owe taxes for 2023, you’ll continue racking up penalties and interest until you file and pay, according to the IRS.

Delmaine Donson | E+ | Getty Images

The federal tax deadline was April 15 for most filers — and if you missed it, you should file your return and pay your balance as soon as possible, experts say.
If you still owe taxes for 2023, you’ll continue racking up penalties and interest until you file and pay your outstanding balance, according to the IRS.

The late filing penalty is 5% of your unpaid balance per month or partial month, capped at 25% of your balance. The fee for failure to pay is 0.5% per month or partial month, with a maximum fee of 25% of unpaid taxes. Interest is based on the current rates.
“The longer you wait to file, the bigger the risk of higher penalties and interest from the IRS and state,” said Mark Steber, chief tax information officer at Jackson Hewitt.
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However, that doesn’t mean you should rush to file a return if you’re still missing key information, like tax forms for your investments or other earnings.
“A return needs to be completely accurate,” Steber said. “No guessing or estimating.” 

With missing information, the IRS could flag your tax return for audit, processing could be delayed or you could receive an agency notice. 
Still, “file an accurate return as soon as you’re able,” Steber suggested. 
Of course, some filers in disaster areas automatically have more time to file federal returns and pay taxes owed.

How to make a late payment for your taxes

There are several online choices for late tax payments, including IRS Direct Pay and your IRS online account.
If you can’t pay your tax balance in full, you have “various payment options,” including payment plans, according to the IRS.
IRS online payment plans, or “installment agreements,” include:

Short-term payment plan: This may be available if you owe less than $100,000 including tax, penalties and interest. You have up to 180 days to pay in full.

Long-term payment plan: This may be available if your balance is less than $50,000 including tax, penalties and interest. You must pay monthly, and you have up to 72 months to pay off the balance.

You could also qualify for first-time penalty abatement, which is like a “‘get out of jail free’ request,” according to Nicole DeRosa, tax partner at accounting firm Wiss & Company.
However, eligibility depends on the type of penalty and your past compliance with the IRS, she said. More

If you’ve inherited an individual retirement account since 2020, you could have a shorter timeline to withdraw the money, which can trigger tax consequences.
Under the Secure Act of 2019, certain heirs have a 10-year window to deplete an inherited IRA, but there’s no penalty for missed 2024 distributions.
There are several factors to consider when deciding to take inherited IRA withdrawals, experts say.

Jacob Wackerhausen | iStock / 360 | Getty Images

If you’ve inherited an individual retirement account since 2020, you could have a shorter timeline to withdraw the money, which can trigger tax consequences. But there are a few things to consider before emptying an inherited account, experts say. 
Under the Secure Act of 2019, so-called “non-eligible designated beneficiaries,” have a 10-year window to deplete an inherited IRA. Non-eligible designated beneficiaries are heirs who aren’t a spouse, minor child, disabled or chronically ill. Certain trusts may also fall into this category.

In 2022, the IRS proposed mandatory yearly withdrawals for heirs if the original account owner had already started their required minimum distributions, or RMDs. But the agency has since waived penalties for heirs’ missed RMDs amid confusion.
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These waived RMDs could create a tax problem for certain heirs who still must empty inherited accounts within 10 years, experts say. The shorter window could mean larger distributions and higher-than-expected income for those years.
However, “most beneficiaries don’t even care about the 10-year rule. They just want the money,” said individual retirement account expert and certified public accountant Ed Slott. 

Most beneficiaries don’t even care about the 10-year rule. They just want the money.

Individual retirement account expert

Heirs tend to earmark an inheritance for certain expenses and “the money is coming out on the way to the funeral,” he said.

Indeed, nearly 40% of Americans expecting an inheritance will use the money to pay off debt, according to 2023 survey from New York Life.

Tax changes are ‘one of many moving parts’

Provisions from the Republicans’ signature 2017 tax overhaul are slated to sunset after 2025 and without changes from Congress, individual federal income tax brackets could be higher.
Before 2018, the federal individual brackets were 10%, 15%, 25%, 28%, 33%, 35% and 39.6%. But five of these brackets are temporarily lower through 2025: 10%, 12%, 22%, 24%, 32%, 35% and 37%.
Lower brackets through next year could prompt some heirs subject to the 10-year rule to make pretax withdrawals sooner.
But the expected tax law changes are just “one of many moving parts,” according to certified financial planner Edward Jastrem, chief planning officer at Heritage Financial Services in Westwood, Massachusetts.
“To a certain extent, I would lean towards other aspects of a client situation potentially being more important,” he said.
Before withdrawing money from an inherited account, you’ll need to consider one-off situations like selling a business or a home, which could temporarily boost income. You should also weigh your expected retirement date and when to start taking RMDs from your own retirement accounts, Jastrem said.
“It’s the big picture of each unique client’s plan,” he said.

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YOUR GUIDE TO NAVIGATING YOUR FINANCIAL FUTURE

More than eight in 10 teenagers have already thought about their retirement, according to a recent report. However, far fewer know the best way to set up a long-term plan.
Ed Slott, a certified public accountant and the founder of Ed Slott and Co., recommends starting with a Roth individual retirement account.
He said contributions can be small at the outset because “time is the key asset.”

Getty Images

When it comes to teens and money, there is often a disconnect.
Overall, teenagers are taking a greater interest in their long-term financial health — although far fewer understand basic retirement planning.

A majority, or 83%, of 13- to 18-year-olds, said they had already thought about their retirement, according to the results of a survey from Junior Achievement and MissionSquare.
But most teens mistakenly believed saving money in a bank account was the best long-term strategy. Only 45% said investing in stocks and bonds with the help of a financial advisor, which would offer a greater long-term return, was the preferred way to go.

More from Your Money:

Here’s a look at more stories on how to manage, grow and protect your money for the years ahead.

“This research shows retirement is more top-of-mind for teens than one might think,” said Jack Kosakowski, Junior Achievement’s president and CEO. “While young people have given retirement planning some thought, it’s apparent they still need information on the best way to go about it.”

‘The greatest money-making asset you can possess’

Although retirement can seem far away, particularly for those just starting out, teens have a unique opportunity that others do not, according to Ed Slott, a certified public accountant and the founder of Ed Slott and Co.
“The greatest money-making asset you can possess is time,” he said. “Someone who starts at 15 has a huge advantage even over someone who starts at 25.”

Slott recommends opening a Roth individual retirement account to get a head start.
Contributions to a Roth IRA are taxed upfront, and earnings grow tax-free. In retirement, withdrawals are completely free of tax and penalties, as long as the account has been open for at least five years.
Since there are no age restrictions, anyone with earned income — say, from a summer job — can contribute.

Even if a teen only puts some money away, parents can add funds on their child’s behalf, as long as the combined amount doesn’t exceed the teenager’s earned income for the year. Once contributed, the money inside a Roth IRA account can be invested appropriately to suit any type of long-term goal.
In Christopher Jackson’s 12th-grade personal finance class, students open Roth IRAs with an initial grant of $100 from the community, which they then learn to maintain on their own. Jackson, who teaches at Da Vinci Communications High School in Southern California, tells his students that “this is going to be the most important class they are going to take in their life.”
“My No. 1 goal is to affect their children’s children,” he recently told CNBC.

How Roth IRAs help you start saving

While there is a maximum IRA contribution limit of $7,000 for 2024, it’s less about how much you save and more about the act of saving, Slott said. “It doesn’t have to be a lot. Time is the key asset.”
Meanwhile, both the investment and all the interest, dividends and growth on these assets will accumulate tax-free over the years.

If there are more immediate needs before hitting retirement age, account holders can withdraw their contributions at any time without taxes or penalties if, for instance, they need the money for college or a down payment on a house down the road, according to Slott.
However, Slott advises young adults to view tapping into these funds as a last resort.
“Roth money is the last money you should touch because that money is growing the fastest and it will never be eroded by current or future taxes,” he said.
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Just an inch of floodwater can generate tens of thousands of dollars in property damage. Homeowners trying to move and start over after such a disaster might find a surprising buyer for their home: the government.
The Federal Emergency Management Agency, or FEMA, has spent around $4 billion assisting in the purchase of about 45,000 to 50,000 damaged homes since 1989, according to A.R. Siders, director of the University of Delaware’s Climate Change Science and Policy Hub, who analyzed FEMA’s data in 2019.

These homes have been marred by floods to the point where the homeowners decide to move away. To encourage homeowners not to sell to new buyers and stop what Siders calls “that terrible game of hot potato,” FEMA’s Hazard Mitigation Grant Program supports local and state governments in purchasing the homes, demolishing them and turning the property into public land, in what are called floodplain buyouts.

‘I have no regrets’

Andrea Jones accepted a floodplain buyout for her home in the Charlotte, North Carolina, area.

Andrea Jones, 59, sold her home in the Charlotte, North Carolina, area in a floodplain buyout. Jones, who works in the wealth and investments department of a bank, purchased her home in 2006 for $135,000. Her home was appraised in 2022 at a value of $325,000.
Jones said her home never flooded but her street did.
“Within three years of me being in the house was the first time I experienced the heavy flooding. It came up to my mailbox,” Jones said. “You could not see the street. You could not see the beginning of my driveway.”
Commuting to her home, which was not in a flood zone when she bought it but was later rezoned into one, made her worry.

“At times when I would be at work and it’d be raining really hard and I’d be like, am I going to be able to get home? Am I going to be able to get to my house? Am I going to have to park my car up the street?” she said. “It just didn’t happen a lot. But when it did happen, it was scary.”

The image on the left shows the former home of Andrea Jones before it was demolished following a floodplain buyout. The image on the right is how the land looks now.
Courtesy: Andrea Jones

Jones put the proceeds from the sale toward the purchase of a new home, which she said is nicer, for $437,000. Since the home is more expensive and interest rates are higher, Jones said, her monthly mortgage is double what it once was.
Her new home is outside the floodplain and about a 10-minute drive from her former neighborhood.
“I miss the neighborhood; I miss my friends,” she said. “I miss seeing people walking their dogs, standing out, talking with them, having conversations … things like that.”
However, she said she feels more comfortable and has peace of mind living in her new home because she doesn’t need to worry about her street flooding.
“I wouldn’t go back. I have no regrets [about] having made the decision that I made,” she said.

How floodplain buyouts work

Floodplain buyouts help a homeowner move out of harm’s way and potentially help the community by creating open space and/or an area that can collect flood waters to protect the other homes in the region.
For FEMA’s floodplain buyouts, executed under the Hazard Mitigation Grant Program, 75% of the buyout funding is provided by the federal government, and the remaining 25% comes from state, local and community funds. In some instances, the 2021 Bipartisan Infrastructure Law can cover 90% of the buyout with federal funds.
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However, buyouts as a strategy can be controversial, experts say.
“It’s a bit of a mixed bag. I think in some cases they’re successful and in some cases they’re not,” said Mathew Sanders, senior officer for U.S. conservation at Pew Charitable Trusts.
Sanders said some communities may be apprehensive about taking on the responsibility of the deeded land. “There’s legal liability associated with owning property generally, and so it ends up, in some cases, being a fairly significant drain on local resources,” he said.
The Congressional Research Service found that, without full participation, floodplain buyouts can also lead to problems such as blight, community fragmentation, difficulty with municipal services and inability to restore the floodplain to be able to properly absorb water.

For homeowners, it can be ‘a long time to wait’

Of course, a buyout can be a huge advantage for a person who does not want to live in a floodplain but may not have the resources to abandon their home.
Even so, the buyouts can take a long time. On average, federal buyouts can take two to five years, though 80% of the FEMA acquisitions are approved in less than two years.
“That’s a long time to wait, if your home has mud in it and you’re trying to figure out whether to rebuild or not,” said Siders, of the Climate Change Science and Policy Hub.
Jones’ buyout was delayed by the pandemic, but once she started the process up again in May 2022, things moved quickly. She purchased her new home in January 2023.
How long the buyout takes often depends on which program is funding the buyout. In addition to FEMA, the U.S. Department of Housing and Urban Development and many state and local communities fund floodplain buyouts.

And all of this is happening as the U.S. is facing a housing shortage of at least 7.2 million homes, according to Realtor.com.
“We’re talking about a crisis of affordability in housing across the country, combined with the crisis of the climate change effects. How do we ensure that we provide for our population while making sure that they’re not in harm’s way?” asked Carlos Martín, director of the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University.
Watch the video to learn more about how floodplain buyouts work and whether the U.S. should continue investing in buying and destroying homes facing flooding. More

President Biden hasn’t not given up on the idea of free community college nationwide.
Unlike student loan forgiveness, free college is a better way to combat the college affordability crisis, some experts say.
Even though Biden has yet to make college tuition-free at the federal level, the number of statewide free-college programs is growing.

When President Joe Biden unveiled the details of his Plan B for student loan forgiveness, he revealed that his hope to make some college free was not dead.  
“I also want to make community college tuition free so you don’t need loans at all,” Biden said after including free community college as part of his $7.3 trillion budget for fiscal 2025.

Unlike loan forgiveness, free college is a better way to combat the college affordability crisis, some experts say — and although a federal effort has yet to get off the ground, it could have a good chance of securing widespread approval going forward.
“Student loan forgiveness is a Band-Aid,” said Ryan Morgan, CEO of the Campaign for Free College Tuition. “It’s not a permanent solution but it’s certainly better than nothing.”
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Critics have panned the president’s efforts on loan forgiveness for overstepping his authority while only impacting those graduates with existing education debt.
“Loan forgiveness is a snapshot in time in terms of a fix,” Morgan said.

Alternatively, free college appeals more broadly to those struggling in the face of rising college costs, rather than after the fact.
“If you remove cost as the barrier than everyone who wants to, and is qualified to go, can attend some sort of higher education program,” Morgan said.
“That makes it “a very popular bi-partisan issue,” he added.

And yet, the Biden administration’s plan to make community college tuition-free for two years was ultimately stripped from the Build Back Better Act in 2021.
However, while the White House turned its focus to student loan forgiveness, states have been moving forward with plans to pass legislation of their own to make some college tuition-free.
As of the latest tally, 35 states already have some type of program in place.
Most are “last-dollar” scholarships, meaning the program pays for whatever tuition and fees are left after financial aid and other grants are applied. In other words, students receive a scholarship for the amount of tuition that is not covered by existing state or federal aid.

The problem with free college

Critics say lower-income students, through a combination of existing grants and scholarships, already pay little in tuition to state schools, if anything at all.
“The reality is that there’s a very good chance you aren’t going to pay tuition,” said Sandy Baum, senior fellow at Urban Institute’s Center on Education Data and Policy. “That’s not really solving an access problem.”
Further, in most cases the money does not cover fees, books, or room and board, which are all costs that lower-income students struggle with, and community college may not be the stepping stone to a four-year school it is often believed to be.
In fact, just 16% of all community college students go on and attain a bachelor’s degree, according to recent reports by the Community College Research Center at Columbia University, the Aspen Institute College Excellence Program and the National Student Clearinghouse Research Center.

“It’s a really risky way to think you are going to save money because very few people go on to get a bachelor’s degree,” Baum said.
In addition, community college is already significantly less expensive. At two-year public schools, tuition and fees averages $3,990 for the 2023-24 school year, according to the College Board. Alternatively, at four-year, in-state public schools, that number is $11,260 per year and, at four-year private universities, it’s $41,540.

New Mexico’s program is ‘our gold star’

Among all state-based plans, the New Mexico Opportunity Scholarship Act has been hailed as the most extensive tuition-free scholarship program in the country — “that’s our gold star in terms of programs,” Morgan said.
New Mexico’s Opportunity Scholarship goes a step further than most by opening up access to returning adult learners, part-time students and immigrants, regardless of their immigration status, in addition to recent high school graduates. (The average scholarship recipient in New Mexico is under 25 years old, female and Hispanic.)
In New Mexico, the state aid is applied first, so federal aid and private scholarships can go toward books, room and board and childcare to help cover the total cost of going to school. 
Since its inception in 2022, overall college enrollment has increased by nearly 7% in the state, reversing more than a decade of declines, according to Higher Education Department Secretary Stephanie Rodriguez.
That’s “telling us that students are ready to go to school, they want to be there and they want to reskill or upskill,” she said.
“It’s gratifying to see that the scholarship is doing exactly what it was intended to do,” Rodriguez added.
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A Goldman Sachs logo is displayed on an android smartphone.
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Macroeconomic woes and geopolitical tensions have been weighing on investor sentiment, shaking up the major averages in the past week.
Investors seeking stability may want to turn to dividend-paying stocks.

They can follow the recommendations of Wall Street analysts, who conduct a thorough analysis of the financials of the dividend-paying companies and assess their ability to grow their dividends over the long term.     
Here are three attractive dividend stocks, according to Wall Street’s top experts on TipRanks, a platform that ranks analysts based on their past performance.
Enterprise Products Partners
This week’s first dividend stock is Enterprise Products Partners (EPD), a midstream energy services provider. The limited partnership has increased its cash distribution for 25 consecutive years at a compound annual growth rate of 7%.
On April 5, Enterprise Products announced a quarterly cash distribution of $0.515 per unit, payable on May 14. This payment reflects an increase of 5.1% year over year. EPD stock offers an attractive dividend yield of 7.1%.
Following the company’s investor update call held earlier this month, RBC Capital analyst Elvira Scotto reiterated a buy rating on EPD stock with a price target of $35. The analyst said that the call supported her view that the company is well-positioned to gain from its organic growth projects, which are expected to come online through 2026.

Scotto added that the company’s organic projects (like the Mentone West 2 natural gas processing plant in the Delaware) are mainly focused on the Permian Basin, where it expects consistent growth for at least another 10 years.
The analyst is confident about EPD’s ability to support its growth investments, thanks to a strong operations base and balance sheet. Further, she expects mid-single-digit growth in the company’s distributions.
“EPD remains comfortable returning 55-60% of its adjusted CFO (cash flow from operation) to investors through distributions and buybacks,” said Scotto.
Scotto ranks No. 84 among more than 8,700 analysts tracked by TipRanks. Her ratings have been profitable 64% of the time, with each delivering an average return of 17.8%. (See EPD Technical Analysis on TipRanks) 
Goldman Sachs
Let’s move to Goldman Sachs (GS), one of the leading investment banks in the U.S. The bank recently reported better-than-anticipated first-quarter results, driven by a rise in trading and investment banking revenue. A rebound in capital market activities helped it deliver solid performance.
In the first quarter, Goldman Sachs returned $2.43 billion of capital to shareholders through share repurchases worth $1.5 billion and dividends of $929 million. The bank declared a dividend of $2.75 per share, payable on June 27. GS stock offers a dividend yield of 2.7%
In reaction to the impressive Q1 print, Argus analyst Stephen Biggar upgraded his rating for Goldman Sachs to buy from hold with a price target of $465, saying that the results “demonstrated the considerable strengths of the Goldman franchise during an investment banking upturn.”
While there were some appearances of false rebounds in the investment banking space in 2023, the analyst thinks that the current recovery appears to have the power to persist. His optimism is supported by the encouraging sequential improvement in the equity and debt underwriting business. He is further encouraged by the high-teens year-over-year growth in industrywide announced M&A deal value in the first quarter.
Biggar expects these factors to drive improved revenues in the second half of 2024. He highlighted data from the Securities Industry and Financial Markets Association, which indicates a triple-digit year-over-year increase in capital formation in Q1 2024. Notably, the value of IPO issuance jumped 239%, while secondary issuance surged 110% in the first quarter.
Biggar ranks No. 603 among more than 8,700 analysts tracked by TipRanks. His ratings have been profitable 60% of the time, with each delivering an average return of 11.8%. (See Goldman Sachs Stock Buybacks on TipRanks)
Cisco Systems
Finally, let’s look at Cisco Systems (CSCO), a networking equipment maker. In the second quarter of fiscal 2024, the company returned a total of $2.8 billion to stockholders through share repurchases and dividends of 39 cents per share.
Cisco announced a roughly 3% increase in its dividend to 40 cents per share, beginning the payment in April 2024. The stock has a dividend yield of 3.3%.
On April 15, Bank of America Securities analyst Tal Liani upgraded Cisco Systems to buy from hold and increased the price target to $60 from $55, citing valuation and three catalysts: AI-related tailwinds, growth in the security business and synergies from the recently completed Splunk acquisition.
“We expect Networking to start normalizing and see renewed growth driven by Cisco’s share gains in Ethernet-based AI buildouts of hyperscalers,” said Liani.
While the analyst agrees that the next two quarters may continue to be under pressure, he contends that this downtrend is fully reflected in Wall Street’s expectations. He thinks that management’s guidance is adequately conservative.
Meanwhile, Liani expects the company’s security business growth to accelerate, driven by stabilization in the firewall space and its recently launched products.
Liani holds the 532nd position among more than 8,700 analysts tracked by TipRanks. His ratings have been successful 55% of the time, with each delivering an average return of 10.9%. (See Cisco Ownership Structure on TipRanks) More

YOUR GUIDE TO NAVIGATING YOUR FINANCIAL FUTURE

In her upcoming book, “Financially Lit!: The Modern Latina’s Guide to Level Up Your Dinero & Become Financially Poderosa,” author Jannese Torres discusses how she became the first woman in her family to graduate from college, build a career and achieve what she believed were marks of success.
“Homeownership is one of those things where more people need to question if they have the personality, lifestyle, or the value system for this, or are you just wanting to do it because that’s what everybody else is telling you to do,” Torres said.

Jannese Torres is the founder of the blog Delish D’Lites and the podcast “Yo Quiero Dinero.”
Photo Jannese Torres

In her upcoming book, “Financially Lit!: The Modern Latina’s Guide to Level Up Your Dinero & Become Financially Poderosa,” author Jannese Torres discusses how she became the first woman in her family to graduate from college, build a career and achieve what she believed were marks of success.
Yet in her pursuit of the American dream, she realized that she didn’t know what to do with her financial success. She also realized certain milestones, such as homeownership, often aren’t so much achievements as a new set of challenges.

“It’s just important for people not to just feel this pressure to buy a home because you’re a certain age or you’ve reached a certain life milestone,” said Torres, a Latina money expert who hosts the podcast “Yo Quiero Dinero” and an entrepreneurship coach who helps clients pursue financial independence.

As part of its National Financial Literacy Month efforts, CNBC will be featuring stories throughout the month dedicated to helping people manage, grow and protect their money so they can truly live ambitiously.

CNBC spoke with Torres in early April about what drove her to write her new book, how she has worked through “financial survivor’s guilt,” and why pursuing the American dream can become a nightmare for some.
(This interview has been edited and condensed for clarity).

‘Nobody talks about the grief that comes with growth’

Arrows pointing outwards

“I wanted to write the book that I needed when I was graduating from high school and that could have saved me from making a lot of financial mistakes because I didn’t learn anything about money,” said Jannese Torres, author of “Financially Lit!: The Modern Latina’s Guide to Level Up Your Dinero & Become Financially Poderosa.”
Courtesy: Jannese Torres

Ana Teresa Solá: What drove you to write this book? 
Jannese Torres: When I was doing the market research for the book, one of the things that I did was look and see what the competitive market looked like out there, or if there is a reason that this book needs to exist. 

I couldn’t find a single book that was specifically marketed to the Latina community or Latinos in general being the majority minority in this country. 

Our families have told us to go and pursue the American dream, but we haven’t been given instructions for how to manage the emotions that come with it.

Jannese Torres

I felt like I wanted to write the book that I needed when I was graduating from high school and that could have saved me from making a lot of financial mistakes because I didn’t learn anything about money. The more that I’ve talked to folks through the podcast and through my social media platforms, that’s been a very common sentiment. We’re told to go to school, get a job and make money, but then that’s the end of the conversation. What do we actually do with it? 
ATS: Like many younger generations of Latinos in the U.S., you overcame many hurdles and achieved major goals. But you describe in the book that these milestones also come with a sense of guilt. Why is guilt tied to success? 
JT: I call it “financial survivor’s guilt” because this is one of those things that we have not been prepared for. Our families have told us to go and pursue the American dream, but we haven’t been given instructions for how to manage the emotions that come with it. Nobody talks about the grief that comes with growth. Nobody talks about what it feels like to be on the other side of the struggle when so many people that you love are still there and you feel powerless to help them all. 

Looking back at it now, it’s like I was making all these decisions because of what other people valued versus asking myself what I actually value.

Jannese Torres

It’s going to require folks to give themselves some compassion, and to be okay to feel those feelings. But don’t let them sabotage you. It’s going to require some boundaries that you learn to exercise and also being okay with feeling like you’re on this island by yourself. When you’re the first to do something, it’s always going to feel uncomfortable. But if we don’t have examples of people who can make it out, I think it’s going to be much harder for folks to believe that they can do it, too. 

‘I was over my head very quickly’

ATS: Walk me through the chapter or that point in time when you bought a house, but it wasn’t all you thought it would be. 
JT: Looking back at it now, I was falling victim to the American dream. As a first-generation kid, my parents didn’t invest. The only thing that we saw as examples of “making it” was when family members would buy homes: The sacrifices were worth it and this is the thing that you have to show for your success.

When you’re the first to do something, it’s always going to feel uncomfortable. But if we don’t have examples of people who can make it out, I think it’s going to be much harder for folks to believe that they can do it, too. 

Jannese Torres
Latina money expert and entrepreneurship coach

I definitely felt the pressure to keep up with the Joneses in that respect. I was turning 30 years old and I saw friends buying homes, getting married, doing all those things that are on the successful adult checklist of life. When I decided to purchase the home, it was coming from a place of, “Well, I need to do this too, because this is just what everybody does.”
I quickly realized that I bought a home in a place that I didn’t even want to live in. 
Looking back at it now, it’s like I was making all these decisions because of what other people valued versus asking myself what I actually value. The freedom to have that flexibility that comes with renting is something that I valued much more.
But I felt like I was falling victim to that narrative that says, “You’re wasting money if you rent, and successful adults purchase homes.” It took a lot of unlearning of those narratives and realizing that just because something works for one person doesn’t mean that it’s universally applicable. 
Homeownership is one of those things where more people need to question if they have the personality, lifestyle, or the value system for this, or are you just wanting to do it because that’s what everybody else is telling you to do. 

Jannese Torres
Courtesy: Jannese Torres

ATS: What would you tell someone who’s financially comfortable or has reached certain benchmarks where they could potentially invest in a property but are still wary about it? 
JT: One of the things that made me realize I was over my head very quickly was the fact that two weeks into moving into the home, I discovered that the basement would flood. The sewer line was blocked, and that was not something that we checked during inspection. I ended up having to spend $4,000 on replacing the pipe in the basement two weeks after moving in. That pretty much depleted the little money that I had left over after closing costs. 
I ended up having to take a 401(k) loan to pay for repairs and putting things on credit cards. It’s important to realize that closing costs, the fees and the down payment are just the beginning.

There’s this narrative where if you get a mortgage, then you’re going to be paying the same amount of money forever and that’s why you should buy a home instead of renting. And I’m like, “Absolutely not.” Your property taxes and insurance will increase. You’re not going to be able to predict when things go wrong in the home and when you need to fix something. 
You have to make sure you can afford the maintenance costs and the things that will inevitably come with homeownership. And from a value perspective, you have to really be honest with yourself: “Does this suit my lifestyle? Do I want to stay in this place for like a decade or more? … Or do I want the flexibility to give my landlord 30 days’ notice and be able to move somewhere else? Are you in a job that feels like it’s something you want to do long term? Or do you want to make a career pivot?”

‘The American dream is more of an illusion’

ATS: Do you think the American dream has changed? 
JT: I definitely do think that the American dream is in the process of being redefined because it has become so inaccessible, especially to the newer generations. I think there was this path to “success” where you could go to school, you could buy a home with a regular job, and previous generations were not saddled with the level of student loan debt and the cost of living was not as high. There’s factors in play that are making the American dream obsolete or at least inaccessible to people. 
We are seeing sort of this questioning of it and this shift. I think that the Great Recession was a big impetus for people starting to wonder. It feels very much like the American dream is more of an illusion for a lot of folks, and I am curious to see where it goes. More