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In the following video interview, Linda Shelby, a Merrill Edge executive, sits down with Brendan Byrnes to discuss the most recent Bank of America (NYSE: BAC) Merrill Edge Report. The report is a semiannual study that puts the behaviors or mass affluent consumers into perspective. With their numbers at nearly 28 million households in the United States alone, understanding the sort of massive trends that affect these individuals can have powerful implications on your investments. Understanding paradigm shifts like those discussed here are a cornerstone of Motley Fool superinvestor David Gardner's own investing strategy and are critical to his market-thrashing returns. Learn more about how he discovers his winners; just click here now to read more.

Brendan Byrnes: Was there anything that you looked at in the study that kind of startled you? That said, maybe, "This can't keep happening?" You mentioned dependent on government programs. Is there anything that worries you about the study that you saw, with retirees or with college savings?

Linda Shelby: I think I feel optimistic that people are feeling like they're getting their arms around it. Compared to where they were -- 84% is still a large number -- but feeling better than they felt in April of this year.

College costs is something that I think is going to have to concern everyone who has children, when we look at that.

Brendan: Yeah, we mentioned with college costs, a lot of people wish that they had started saving earlier. You mentioned the 529 plan may be one way to go, but that's a very small percentage of how people are actually paying for their kids' college.

How are they paying for their kids' college, if they're not using maybe a 529 plan, or haven't put their money into an index fund, Dow, S&P? How do they actually pay for this if they're not saving as much ahead of time?

Linda: Sixty percent of parents are pulling from their personal savings accounts to pay for a child's education. About 38% are looking to see scholarships and grants, and then another third are counting on their kids getting student loans. But interestingly, having the child get a student loan, about 47% are planning to help pay it back.

As one of my clients said to me: "My child can get a student loan. I can't get a loan for retirement. So we'll go ahead and take the loan, and then pay that loan back."

Brendan: Right. Relatively low interest rates.

Linda: Relatively low. Parents of small children, the mass affluent with small children, 75 percent of them are expecting to help pay back the loans, so I think what we're seeing now is the idea of college debt being a given, and then it's a matter of, "How will I manage that debt?"

That's another reason why it's so important to start planning early, so that if there is going to be that debt, you can factor that into your other expenses.

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