Let's Talk Money

This is my concern, especially moving forward. The Trades are going to be in even higher demand down the road. So who know what a baby born in 2021 may want to do in 2040.....

 

Exactly. Electronics and Electrical not even programmers but actual people who know how to troubleshoot electrical and electronics I can only see increasingly in demand across HVAC, Automotive, Home Security, not to mention manufacturing etc...

 

College is the "American Class" system.... Trades? Military? Those are only choices for poor working class families because any father worth anything would never let his kids go into those. You want little Jimmy to get his legs blown off so Haliburton and Lockheed can make their shareholders happy?

 

Curious about this. I feel I should know, but know nothing about Trusts - specifically Family Trusts(?). I hear it's a way to legally separate yourself from your assets while being in sole control of them?

Cuz once all the advice pans out and I get a bit of money in my pocket, don't want to become the target of an ambulance chaser.

 

I might have made it sound worse than it is. I appreciate the concern and always take advice.

I am getting older. My job was high stress and affecting my health significantly. My 401k was not huge since we focus on the wife’s 401k. Her company matched, mine didn’t. I already made enough to cover any tax losses in the market plus whatever cap gains are coming. I was just hoping to be totally debt free before I stopped working. Had to change my plans. Besides, meth isn’t selling like it used to.

 

This is huge statement. In all fields. The auto repair industry here in Charlotte has a huge lag in incoming talent. I know a lot of body men that are artists, but they are leaving the field. Very few are coming behind them that can do what they do. Most of them that are coming are usually related or friends.

 

Pretty close to my view. My advisor for over forty years (we were young together) pretty much retired at 48. He kept his original clients after that until he decided he was time to fully retire. We’re both very comfortable.

 

Lots going on in here today! I’m pretty busy out of town today so I’ll just give a couple quick comments…
Regarding the 529 vs UTMA conversation, 529 growth is tax free which is a major benefit. And it can be transferred to other family members. Also, if your kids do opt to go to school and they get scholarships, you can take out the scholarship amount from the 529 penalty-free. UTMA doesn’t have those benefits, but it can be used for anything as you guys mentioned.
Regarding my income, like a couple others have said, it’s mostly a moot point. $100k well managed can go a lot further than $250k that is mismanaged… and while I am well versed and trained in many personal finance topics, I’m not here to “give advice”, we’re here to have conversations and learn from each other about how we can be better stewards of our money.

 

I have not read thru all your posts, but I guess a good question would be not how rich you are but what experience, qualifications, certification, and achievements have you made in your field to be able to talk and give advice on finances.

 

We went with UTMA, similar situation. Who knows what the future holds, but that should provide my children more opportunities to make the best decisions for what they want to do.

 

Ahhh see we are not having the same conversation because I didn't stop at $250K. Basically you are talking french fries and Im talking Kelly from Denmark bringing me french fries on my own chartered jet, Not the same conversation but at least you are trying to help people!

 

You are so big time

 

FIFY

 

Its not hard to make money. Here let me tell you a little secret. You know those 3rd GEN "Progressive" turn signals and "Tacoma" black out badges? There are suppliers in China who will sell you that stuff in bulk dirt cheap and even drop ship it for you! One seller had over 1500 sales last month and I'm pretty sure he was buying for $12 and selling for $49 so.... you just really have to want it more than the next guy!

How would an extra $40/$50K a month change your life?

 

Don’t feed the troll. He just wants attention, in whatever form he can get it.

 

Seems more future-proof to me. Any other investment vehicle I should consider?

 

I believe 529's can be used for vocational/trade schools, it's not just college. If you don't use it for post-high school education, then you pay a 10% penalty on earnings and also have to pay federal income tax (I believe just on earnings as well). You can also transfer the 529 to another family member, so if your child doesn't use it, then you can transfer to a future grandchild.

You can transfer it to yourself as well... and go get that helicopter pilot's license that everyone wants.

 

You may be correct, and at this point its semantics but; a general mutual fund portfolio within the shell of a trust will allow you the most flexibility to use the money how you see fit. Let's say your child at 16 gets into a car accident and you need to have them in an assistive living situation for the rest of their life, how will a 529 help then? Unless your state has specific tax benefits for 529s then IMHO I would look elsewhere for better money management and control. In a conversation with one of my financial advisors we talked about trusts being good avenues for money control over kids spending, to ensure that if the kid gets into drugs or something they won't cash out their 529 with a penalty to just go on a bender at 18.

 

Won't you be paying for that flexibility in the form of taxes on the mutual fund gains versus the tax free gaines of the 529? My family trust is virtually only about estate planning, not minimizing income taxes, so maybe i'm missing something about "mutual fund portfolio within the shell of a trust".

My personal calculus is that it's vastly more likely my child will go to college than need assistive living for the rest of their lives due to a low probability accident or get so into drugs they'll steal the 529. Not that those terrible things have zero percent chance of happening, but with confidence in my parenting abilities and what I know about my child, I'm pretty hopeful it'll be college over a feeding tube. So sequestering funds by taking advantage of the tax incentive with 529s is worth it for me.

 

Then it sounds like 529 is a good option for you.

{Mutual funds
Mutual funds are an option to save for college costs. They offer unlimited investment control and flexibility as you can choose from a wide variety of funds that meet your risk tolerance, time horizon, and overall investment preferences. And there are no restrictions or penalties if you sell your shares and use the money for something other than college.

But 529 plans are generally a more powerful tool than mutual funds when it comes to saving for college because they offer federal tax benefits that mutual funds don’t. First, assets in a 529 plan accumulate tax deferred, which means you don’t pay incomes taxes each year on the income earned by the fund’s underlying assets. With mutual funds, you’ll pay income tax every year on the income earned by the fund (dividends and capital gain distributions paid by the fund), even if that income is reinvested. Second, withdrawals from a 529 plan that are used to pay the beneficiary’s qualified education expenses are completely free of federal income tax (and typically state income tax). With mutual funds, you’ll pay capital gains tax on any gain in the value of your fund when you sell your shares.

The main drawbacks of 529 plans is that they offer less investment control and flexibility. Regarding investment control, you’re limited to the investment portfolios offered by the plan (investment portfolios typically consist of groups of mutual funds) and you can change your investment options on your existing contributions only twice per calendar year. This can make it difficult to adjust to changing market conditions. Regarding flexibility, if you use 529 plan funds for non-educational expenses, the earnings part of the withdrawal is subject to income tax and a 10% federal penalty (state income tax and a penalty may also apply).

Keep in mind that both mutual funds and 529 plans involve risk — your ultimate college fund could be worth more or less than the principal you invested.} from https://www.wilkinsonwm.com/blog/529-plans-vs-other-college-savings-plans

Again IMHO sometimes unlimited investment control and flexibility will allow you to earn more even after paying taxes annually on the money invested. It is kind of like choosing to pay with a credit card because of points instead of taking the 2% discount for paying cash... No offense its just my opinion and I think we will be doing both and like I originally said

I cannot predict the future and I can only prepare for it the best way I know how.