hi, everyone, welcome to "o the money" i'm becky quick. paying what you can afford when you graduate from college. a radical idea whose time has come or a failure? the man warren buffett goes to for advice how old were you when you figured this out ' >> about 7 >> the debit card aimed at kids. how parents can control what they spend, where they spend it, and even pay a little interest if they manage to save and the bizarre viral video that helped launch a successful ice cream company. "on the money" starts right now.

>> announcer: this is "on the money," your money, your life area your future now becky quick. >> we begin with the cost of the college. somehow it continues to climb higher even with inflation factored in. but one university is experimenting with new ways for students to pay. our scott cone found one possible solution to the college cost crisis. it's this week's cover story. >> savannah williams is an education major in her third year at purdue university. she knew going in the manl wth s not on her side. >> i'm going to be a teacher and i won't make a whole lot of income in the future. >> how to pay for herd occasion without drowning in debt purdue offered an alternative. instead ever paying out loans, she'll pay a percentage of her income for ten years after she graduates. >> if i would have gone with a traditional loan i would have had to pay it all off, you know, who knows how long that would have taken. >> it's called an income sharing agreement. the latest attempt to tackle

america's debt crisis. that crisis is massive, a $1.6 trillion drag on the remembering are affecting people's ability to buy a home, buy a car, start a family for years after gradation. purdue's president says the programnow in its third year shifts the risk away from the student. >> it gives them certainty and some protection and safety they're not going to have that much money borrowed piling up compound interest whether they're doing well or not. >> if the graduate doesn't work, she doesn't pay. and if she does really well, her total payments are capped. 2017 grad watt charlotte herbert who got a job as a technical writer making about $32,000 a year financed her senior year with the program. >> i think it's a good balance between you have to pay for school and keeping people from decades and decades of unmanageable debt. >> purdue says it's the first

four-year college to offer income sharing brurt concept is taking off elsewhere in higher education as well. in san francisco, they cofounded the lamb da school which teaches computer coding, free up front in exchange for 17% of your income for two years if you make $50,000 a year. >> if your job as a cool is effectively promising a job, it doesn't make sense that a student pays you a bunch of money and it doesn't work out on the other side schools don't want to do that for obvious reasons. >> it's too soon to tell if it will be the way colleges works in the future. they're unregulated so far and they leave students with an obligation not that much different than student loans but had is one way schools are trying to bend the curve for admission. >> so how can students find the right school that they can actually afford to attend? we have the editor and chief of the principleton review and the

author the 2019 edition of the best value colleges. rob, thanks for being here. >> good to be back. >> let's talk about what we just saw with purdue university had this is a really unusual experiment wou pay 30% to 4%, getting out over a period of time and is it a good deal? >> it could be there are few schools doing it purdue one of the newest ones, clarks university, relative handful,but there's an initiative in the senate right now that says, listen, let's try to simplify the repayment process. one of those simplifications is going to be income share agreements same thing with the california state house. >> i get it it's a great way for a student to say i'm bet opening my future. >> absolutely. >> but there are going to be some students who end up paying more by doing this >> that's what students don't know about if you do better over those ten years of time, then you could be paying much more for an isa than a traditional. >> it's lower risk and you're not going to be mired in debt so i guess that's the tradeoff. >> that's right.

because if a student makes less than $25,000, then those payments would stop. >> student debt is such a huge problem, trillion and a half dollars. >> yeah. >> is that a sustainable debt load it will continue to grow like this >> it's a scary number but just to level set the number, 1.5 trillion concludes law school, "b" school, as well as for profit colleges so it brings it well below that 40% mark for the trillion. but it's a scary number, but a lot of students aren't paying that number. if they're going to state schools nearly 80% of students across the country will go to a state university. >> the other brig problem for so many of those those people who take out the loans don't finish their degree meaning they're saddled with the downside. >> you didn't persist and succeed but you're saddled with the debt. >> in terms of what offfigured out for the best value colleges, there's some schools i've never heard of but there's schools

like johns hopkins and harvard and really expensive schools what's the framework you use for this how do you find best value >> we looked at 40 different factors. we looked at 900 schools, in the book 2 thirds are private, 1 third are public many of the ivy leagues in this book because they have great financial wear with all. harvard can meet your financial need 100% as well as other schools. some schools will meet it at 90%, 80%, 75%. but the thing that they're all doing is not making your mortgage out your future to pay for school. >> i think part of the problem is you don't know what kind of financial aid you're going to get. how does that process work does that in itself scare people off and keep them from applying? >> it does it's one of the things that we see most cross aing an expensive school off your list because of the cost but do the homework so that when you're a college bound student with your parents, with your counselors that you can say, you know what? baits college is charging nearly

79,000 -- or $69,000, but the average aid package is $60,000 bringing that down to what a student could expect to pay for public college this gives you the information you need. >> what's the biggest secret that people don't understand beyond what you just told us about the financial aid. >> yeah. >> what's the biggest thing people don't understand when they're going through this process that if i knew that a year ago, three months ago >> totally $180 billion in financial aid is given out each year. that's a huge number if you cross that stream with doing well in high school, the s.a.t. and a.c.t., that factors in academic prowess and combine that with need-based grants and college can become affordable. that's what i would like students to know when they're sophomores in high school. >> it's worth flipping through this book if you're going through this process in the next few years. thanks so much for coming in.

>> pleasure. up next, you probably know billionaire warren buffett but you might not know his right hand man and business partner for more than four decades we'll sit down with charlie to sample his wealth of wisdom. and later, banking on mom and dad. you want to teach your kids how to spend wisely and save this debit card could help right now, look how the stock market ended the week. with tough food, your dentures may slip and fall. fixodent ultra-max hold gives you the strongest hold ever to lock your dentures. so now you can eat tough food without worry.

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warren and charlie have been business partners for more than 40 years both men have a lot of wisdom beyond just their business success. we recently sat down with charlie and asked about amazon's decision to cancel its plans for a new hq 2 in new york city. >> the idea that you're going to help new york by driving -- out, of course it hurts new york. i think it's really stupid for a state to drive the rich people out. they're old, they keep your hospitals busy, they don't burden your schools, the police department, your prisons they give a lot. who wouldn't want rich people? i think florida and hawaii have both been very smart in the way they've recruited rich people. and i think connecticut and california have been stupid. >> do you think the country risks some of those same stupid policies if you tax -- >> some of the people in california are so antigrowth

they like driving the rich people out that's not my view, but you can understand why some people think that way. >> charlie, so many of the people who come here come because they're looking for advice, not on business or investments as much as they're looking for just advice on life. there are a lot of questions today, people trying to figure out what the secret to life is, to a long and happy life and i just wonder if you were -- >> that is easy because it's so simple >> what is it? >> just don't have a lot of envy, don't have a lot of resentment, don't oversight your income, you deal with reliable people and do what you're supposed to do all these simple rules work so well to make your life better, and they're to trite. >> how old were you when you figured this out >> about 7 i could tell that some of my

older people were a little bonkers. i've always been able to recognize other people who were a little bonkers and it helped me because there's so much irrationality in the world and i've been thinking about it for a long time, it's cause and preventions. sure, it's helped me and starriying cheerful with -- because it's the right thing to do, is that so hard? >> is there any advice you would go back and give your 20-year-old self >> i have not -- many of my children have worked out well. and i've had very little to do with it. i think they come under the world a certain extent premade and you just sit there and watch. the shy baby is a shy adult.

booming, obnoxious, domineering baby is the booming, domineering, ab noxious adult. i've never found a way to fix that i can be cheerful about it, but i can't fix it i can change my reaction, but i can't change the outcome >> i want to thank charlie munger for his time. that interview, by the way, took place recently in los angeles after the annual shareholders meeting of the daily journal that's a newspaper and computer company of which he is also the chairman 95 years old, as sharp and as quick as ever. up next we're on the money you need a lesson to teach your kids about money why giving them a debit card may be a good idea and later, putting the scream in ice cream. how this company turned millions of youtube views into a million dollars.

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internet that puts you in charge. that protects what's important. it handles everything, and reaches everywhere. this is beyond wifi, this is xfi. simple. easy. awesome. xfinity, the future of awesome. starting in september, new jersey will require middle school students in grades ix, seven, and eight to learn lessons in personal finance from budgeting and saving tocredit and investing. one company that aims to help parents raise financially savvy kids is green light. it's a debit card for kids with builtin parental controls. we have the cofounder and ceo tim sheehan. thanks for being here today. >> thanks for having me. >> let's talk about this debit card in the futures.

why should a parent choose that over a typical debit card? >> think of it as like four accounts built into one. it's not a spending debit card but it has parental controls so the parents can decide how much they can spend, here's $10 for chipotle, $50 for target then a savings account, a giving account, and it allows you to track chores and automate allowances as well have some how do you teach kids about investing, about saving, about, i guess, waiting -- not getting instant gratification? >> essentially by giving them money whether they're earning through an allowances or job or anything like that, they have to make these tradeoff decisions. so they have to decide now it's real money, it's their money, they have to decide to do i spend this and buy this game or this thing that they're thinking about buying or i do hold off and maybe by the bigger thing, better thing that i want later

there's a feature called a parent-paid interest rate and the parent can set that at 50% or 100% or, you know, to kind of -- >> on annualized basis or how does that work >> it's like an apy. >> i do it with my kid on a weekly basis, if you haven't spent your money i'll give you that much next week. >> i have it set at 12%, so it's 1% a month. >> we're not going to teach them what it's really like in the real world, you get 1%. >> exactly but what it does do is it allows you to kind of exaggerate the point to make the point. >> wheeze tat's the ideal age g kid a card like this >> right around 12 middle school, 12, 13, they're starting to spend time away from the parents and the parents will have the need to give them money and it's quite convenient to be able to go tap tap and they have $20 to spend at chick-fil-a or wherever it might be. >> you're charging $5 a month. is that high when you consider most banks offer free checking and savings?

>> well, the devil's always in the details. sometimes minimum balance is required and there might be a maintenance fee that you're charged if you don't main than i balance in a bank account. and so we tried to massively simplify things and have no hidden fees and just say it's $5 a month, you can have both parents and up to five kids on there, and -- >> for the same $5 >> and there's no other fees. >> amazon is one of your investors. is some something that's going to be wrapped in in amazon, because i have an amazon card too, or is this completely separate spl maybe we'll see. one thing we have started to work on is the alexa integration so that parents could say alexa, send $20 to jack. >> alexa, freeze jack's account. >> exactly exactly. >> tim, thanks so much for coming in. i appreciate it. >> sure are the. >> good to talk to you.

>> yeah. up next, a look at the news ahead. and we just can't stop staring at this. the inspiration for the yo video is some unusual ice cream flavors like dill pickle >> is it big with pregnant women because they get pickles and ice cream? >> that is where it came from, yeah

here are the stories coming up that may impact your money this week. on tuesday, the philadelphia fed

nonmanufacturing report willing released that's a window on the services sector which is the largest part of the economy and we'll get housing starts numbers for december as well on wednesday, we'll see how much we imported and exported in the last month of the year on thursday, the delayed first read of the fourth quarter gdp is out and then on friday we'll see how much money people took home in january with personal income also, it's national read across america day. so take some time and get your nose into a book, a tablet, or whatever so, what happens when you mix earl gray and sirracha you get a delicious flavor of ice cream, of course it's not just of the quirky flavors that have made one company a success. we have more. >> this ice cream has cannabis extract into it. >> chocolate with a little grassy aftertaste. >> and this ice cream tastes like a dill pickle

is it big with pregnant women because they get pickles and ice cream? >> that's where it came from. >> i eat little baby's ice cream. >> and this is the weird promooetional video seen 14 million times. a strange success that puts the scream in ice cream. >> i'm pete, i'm 35 years old old and item owner of little baby's ice cream. >> pete created little baby's ice cream in philadelphia eight years ago, even though he knew nothing about making ice cream or creating a company. he was a musician. >> i kind got tired of living in a van after a while. one night i couldn't sleep, i was up in my kitchen just fooling around, making ice cream. i was creating an earl gray base. i was like what else could i throw in here? and just as kind of a gag on myself, i squirted in some siracha hot sauce. i threw it in the freezer and woke up the next day and it was delicious. >> this was 2010 another musician friend was experimenting with ice cream and

they joined forces he spent the $11,000 he had inherited from his late mother to start a business. >> i love my job i love my life. >> this video was a turning point made by him and his friend from high school back in 2012 for $3,500 >> somehow within maybe 48 hours we had over 2 million views. at the time, the only only phone number associated with the company was my cell phone, and that was a bad idea. >> revenues went from 27 grand in 2011 to a million dollars last year. what makes little babies different besides the crazy flavor combos. >> and now. >> chipotle. >> chipotle. >> a little -- it's made without eggs and the cream comes from pennsylvania grass-fed cows, though half the menu is vegan. they have six stores and 50 employees. people eat this stuff up well, not everything. >> when we were first getting

started, we tried to make a champagne and lucky charms flavor, which was repulsive. >> it's so good. >> he remains an artist at heart, even though he's in this unexpected position of also being an entrepreneur running a company. but he realized he would never compete with hagen daas, so he decided to make this instead >> did you try the earl gray and siracha because that sounds disgusting >> i did not i tried the butter flavored popcorn. >> i hate the jelly beans that are buttered pop dorn, was it better than that >> don't judge until you've tried it, i'm just saying. but my favorite was the chipotle chocolate cl was amazing >> i can see spicy chocolate, i think i can get with that. you said his cell phone was the

only number that was associated with that. what happened? does he still have the same cell phone number >> no. no, in fact, when i do these stran strange successes, a lot of times people have their cell phone starting out as the number and when they hit it back, all of the sudden, kaboom. so, no, he went to that again and he got rid of that delaware cell phone. >> jane, thank you always a fantastic job thank you. >> thank you. >> that's the show for today i'm becky quick. thank you so much for joining us. next week a start up that will buy your house and rent it back to you. is there a downside to it? we'll talk about it. each week keep it right here, we're "on the money. have a great one and we'll see you next weekend

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the guys here are getting ready for a big show in the meantime, here's what's coming up. the nasdaq just announced a historic winning streak and dan has a way to make money if the group goes up, down, or nowhere at all and he'll show you how do it plus. >> this is murder. >> it's not, it's ketchup. >> kraft shares are getting killed but if you think the selloff is overdone, mike has a crafty way to make some of your