If you grew up poor/LMC and became UMC in your own

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Do you feel like you need to spend ridiculous amounts of money on your kids like all the other UMC/Rich people? My circle is mostly these types, myself included. We grew up in divorced and/or low income households often where our parents made less than 50k and we all now make 300-400k in our early 30’s. We all find it crazy how people think they need to pay for expensive tutoring, private schools, travel teams, etc when we had none of that and turned out fine. One of my friends just had a baby and said he doesn’t plan on saving for their college education.

Dumbdedumm. It’s so blue collar thinking to not value education.
Does he think his kids will just be lucky and land in fortunate circumstances like he did? 400k isn’t enough to trust fund his kid, so what’s his plan? Or is that too UMC for him to consider?

College is only like 50k per year or less in most cases. So you can just pay for it, like other expenses, without needing to "save" for it. I think it's crazy when I read about how "blue collar" it is not to save for it. It's not a big enough expense to require saving.

It's blue collar thinking to forego straightforward, tax preferred savings vehicles for expected expenses.

There's no federal tax deduction

Growth is tax free- that is a massive benefit

and generally no state tax deduction for people in the highest tax categories.

that is just wrong

The only advantage is tax free growth.

that can be 10s of thousands of dollars worth of growth

And 529s don't tend to have great growth performance

my 529 is in the same vanguard funds as my IRA with the same fee structure

so there's opportunity cost, and the risk of overfunding.

then you roll it into a Roth IRA or keep it there and your grand kids have an extra 20 years of growth and college paid for from birth

I don't think funding a 529 is as straightforward for people earning a lot of money. Took a lump sum and funded 529s from the standpoint of risk management-- what if we lose everything type scenario. But as a matter of financial management, it can make a lot of sense for families to just pay for college each year without saving.

You sound like someone who is terrified of the market and that's fine, but compound growth is what sustains family wealth

We did fund them and we are very heavy into the market. But 529s are one of many financial products and they appear to be geared more at middle class people who need to save money to send their kids to college. Once you're at an income that you can easily just write a check for it, it's much less appealing. What I'm mainly reacting to is the concept that if you don't fund a 529, that means you have no intention to pay for your kid's college. I suspect many of not most people in the income level we are at are not overly concerned about 529s. College costs the same as private school; no one saves for over a decade to fund that.

Still do not understand the "much less appealing" aspect. Even if you are wealthy, why not take advantage of tax free growth? That's what rich/UMC people do. You take advantage of any and all tax breaks you can get (since there are not many). So since you will be paying for education anyhow, why not get some tax benefits? And if you overfund, then just leave it there for future generations. The rich look for any way to make money/save on taxes and this is a no-brainer.

It seems like such a marginal amount of tax savings to worry too much about. Like I said several times, we funded it. But I don't view it as a huge benefit for funding college, it might save like 10 or 15k, which isn't game changing.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Do you feel like you need to spend ridiculous amounts of money on your kids like all the other UMC/Rich people? My circle is mostly these types, myself included. We grew up in divorced and/or low income households often where our parents made less than 50k and we all now make 300-400k in our early 30’s. We all find it crazy how people think they need to pay for expensive tutoring, private schools, travel teams, etc when we had none of that and turned out fine. One of my friends just had a baby and said he doesn’t plan on saving for their college education.

Dumbdedumm. It’s so blue collar thinking to not value education.
Does he think his kids will just be lucky and land in fortunate circumstances like he did? 400k isn’t enough to trust fund his kid, so what’s his plan? Or is that too UMC for him to consider?

College is only like 50k per year or less in most cases. So you can just pay for it, like other expenses, without needing to "save" for it. I think it's crazy when I read about how "blue collar" it is not to save for it. It's not a big enough expense to require saving.

It's blue collar thinking to forego straightforward, tax preferred savings vehicles for expected expenses.

There's no federal tax deduction and generally no state tax deduction for people in the highest tax categories. The only advantage is tax free growth. And 529s don't tend to have great growth performance so there's opportunity cost, and the risk of overfunding. I don't think funding a 529 is as straightforward for people earning a lot of money. Took a lump sum and funded 529s from the standpoint of risk management-- what if we lose everything type scenario. But as a matter of financial management, it can make a lot of sense for families to just pay for college each year without saving.

Why does your 529 not have "good growth opportunities"? Majority do, as long as you pick the funds yourself and do not do the "my kid has X years until starting college". The tax benefits from tax free growth is huge. We aimed to underfund, but in reality if you are worth that much, just fund as you see fit, and leave the rest in for future generations. The 50K left in my one kid's 529 could be enough in 25+ years for one grandkid to go to college, all while it's in aggressive growth funds for now and we don't pay taxes. So the $10K we put in 15+ years ago will pay for a grandkids full college most likely.

Like I said, we did fund them out of an abundance of caution. We weren't able to deduct at all (HHI around 1M annually) on either federal or state.

I will say, I've also long believed education is in a bubble that will burst, and this adds to my skepticism of 529s. And also, we ended up moving to a state that mostly covers in-state tuition, which makes me even more blasé about it.

With that income/networth, why would you not allow your kids to attend private or OOS schools, if they desire? Great if kids want to attend In-state (and can get in), but why limit them?

How will the education bubble burst? Do you think 529s will disappear? That is highly unlikely. And I seriously doubt we are going to see colleges go back to costing $50K vs $85K+. It may slow over time, but it's not going to drop at the private/OOS level.

Me personally, we plan to fund future grandkids education by continuing to contribute to 529s. Biggest impact we can make on the future generation and to avoid estate taxes is to start giving it away

We are looking at some OOS schools, and our state gives a direct benefit for instate private schools also. We'd prefer they stay in state for logistical reasons.

The estate tax benefit of 529 is real and appealing. It's just not appealing to fund a 529 vs just pay for school. The tax savings aren't substantial enough for me to get excited about.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Do you feel like you need to spend ridiculous amounts of money on your kids like all the other UMC/Rich people? My circle is mostly these types, myself included. We grew up in divorced and/or low income households often where our parents made less than 50k and we all now make 300-400k in our early 30’s. We all find it crazy how people think they need to pay for expensive tutoring, private schools, travel teams, etc when we had none of that and turned out fine. One of my friends just had a baby and said he doesn’t plan on saving for their college education.

Dumbdedumm. It’s so blue collar thinking to not value education.
Does he think his kids will just be lucky and land in fortunate circumstances like he did? 400k isn’t enough to trust fund his kid, so what’s his plan? Or is that too UMC for him to consider?

College is only like 50k per year or less in most cases. So you can just pay for it, like other expenses, without needing to "save" for it. I think it's crazy when I read about how "blue collar" it is not to save for it. It's not a big enough expense to require saving.

It's blue collar thinking to forego straightforward, tax preferred savings vehicles for expected expenses.

There's no federal tax deduction

Growth is tax free- that is a massive benefit

and generally no state tax deduction for people in the highest tax categories.

that is just wrong

The only advantage is tax free growth.

that can be 10s of thousands of dollars worth of growth

And 529s don't tend to have great growth performance

my 529 is in the same vanguard funds as my IRA with the same fee structure

so there's opportunity cost, and the risk of overfunding.

then you roll it into a Roth IRA or keep it there and your grand kids have an extra 20 years of growth and college paid for from birth

I don't think funding a 529 is as straightforward for people earning a lot of money. Took a lump sum and funded 529s from the standpoint of risk management-- what if we lose everything type scenario. But as a matter of financial management, it can make a lot of sense for families to just pay for college each year without saving.

You sound like someone who is terrified of the market and that's fine, but compound growth is what sustains family wealth

We did fund them and we are very heavy into the market. But 529s are one of many financial products and they appear to be geared more at middle class people who need to save money to send their kids to college. Once you're at an income that you can easily just write a check for it, it's much less appealing. What I'm mainly reacting to is the concept that if you don't fund a 529, that means you have no intention to pay for your kid's college. I suspect many of not most people in the income level we are at are not overly concerned about 529s. College costs the same as private school; no one saves for over a decade to fund that.

Still do not understand the "much less appealing" aspect. Even if you are wealthy, why not take advantage of tax free growth? That's what rich/UMC people do. You take advantage of any and all tax breaks you can get (since there are not many). So since you will be paying for education anyhow, why not get some tax benefits? And if you overfund, then just leave it there for future generations. The rich look for any way to make money/save on taxes and this is a no-brainer.

It seems like such a marginal amount of tax savings to worry too much about. Like I said several times, we funded it. But I don't view it as a huge benefit for funding college, it might save like 10 or 15k, which isn't game changing.

I'm worth mid 8 figures, but part of how you get there/maintain it is to still value money. If I can save/earn an extra 10-15K, I'm all for it. That's 15K I can donate/spend elsewhere. That's a significant amount!!!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Do you feel like you need to spend ridiculous amounts of money on your kids like all the other UMC/Rich people? My circle is mostly these types, myself included. We grew up in divorced and/or low income households often where our parents made less than 50k and we all now make 300-400k in our early 30’s. We all find it crazy how people think they need to pay for expensive tutoring, private schools, travel teams, etc when we had none of that and turned out fine. One of my friends just had a baby and said he doesn’t plan on saving for their college education.

Dumbdedumm. It’s so blue collar thinking to not value education.
Does he think his kids will just be lucky and land in fortunate circumstances like he did? 400k isn’t enough to trust fund his kid, so what’s his plan? Or is that too UMC for him to consider?

College is only like 50k per year or less in most cases. So you can just pay for it, like other expenses, without needing to "save" for it. I think it's crazy when I read about how "blue collar" it is not to save for it. It's not a big enough expense to require saving.

It's blue collar thinking to forego straightforward, tax preferred savings vehicles for expected expenses.

There's no federal tax deduction

Growth is tax free- that is a massive benefit

and generally no state tax deduction for people in the highest tax categories.

that is just wrong

The only advantage is tax free growth.

that can be 10s of thousands of dollars worth of growth

And 529s don't tend to have great growth performance

my 529 is in the same vanguard funds as my IRA with the same fee structure

so there's opportunity cost, and the risk of overfunding.

then you roll it into a Roth IRA or keep it there and your grand kids have an extra 20 years of growth and college paid for from birth

I don't think funding a 529 is as straightforward for people earning a lot of money. Took a lump sum and funded 529s from the standpoint of risk management-- what if we lose everything type scenario. But as a matter of financial management, it can make a lot of sense for families to just pay for college each year without saving.

You sound like someone who is terrified of the market and that's fine, but compound growth is what sustains family wealth

We did fund them and we are very heavy into the market. But 529s are one of many financial products and they appear to be geared more at middle class people who need to save money to send their kids to college. Once you're at an income that you can easily just write a check for it, it's much less appealing. What I'm mainly reacting to is the concept that if you don't fund a 529, that means you have no intention to pay for your kid's college. I suspect many of not most people in the income level we are at are not overly concerned about 529s. College costs the same as private school; no one saves for over a decade to fund that.

Still do not understand the "much less appealing" aspect. Even if you are wealthy, why not take advantage of tax free growth? That's what rich/UMC people do. You take advantage of any and all tax breaks you can get (since there are not many). So since you will be paying for education anyhow, why not get some tax benefits? And if you overfund, then just leave it there for future generations. The rich look for any way to make money/save on taxes and this is a no-brainer.

It seems like such a marginal amount of tax savings to worry too much about. Like I said several times, we funded it. But I don't view it as a huge benefit for funding college, it might save like 10 or 15k, which isn't game changing.

I don't see how you claim you're only avoiding $10 to 15K in taxes. If you're as rich and high income as you claim, you're avoiding 20% capital gains taxes on the 529 used for the cost of college and grad school. That's well over $10k.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Do you feel like you need to spend ridiculous amounts of money on your kids like all the other UMC/Rich people? My circle is mostly these types, myself included. We grew up in divorced and/or low income households often where our parents made less than 50k and we all now make 300-400k in our early 30’s. We all find it crazy how people think they need to pay for expensive tutoring, private schools, travel teams, etc when we had none of that and turned out fine. One of my friends just had a baby and said he doesn’t plan on saving for their college education.

Dumbdedumm. It’s so blue collar thinking to not value education.
Does he think his kids will just be lucky and land in fortunate circumstances like he did? 400k isn’t enough to trust fund his kid, so what’s his plan? Or is that too UMC for him to consider?

College is only like 50k per year or less in most cases. So you can just pay for it, like other expenses, without needing to "save" for it. I think it's crazy when I read about how "blue collar" it is not to save for it. It's not a big enough expense to require saving.

It's blue collar thinking to forego straightforward, tax preferred savings vehicles for expected expenses.

There's no federal tax deduction and generally no state tax deduction for people in the highest tax categories. The only advantage is tax free growth. And 529s don't tend to have great growth performance so there's opportunity cost, and the risk of overfunding. I don't think funding a 529 is as straightforward for people earning a lot of money. Took a lump sum and funded 529s from the standpoint of risk management-- what if we lose everything type scenario. But as a matter of financial management, it can make a lot of sense for families to just pay for college each year without saving.

Why does your 529 not have "good growth opportunities"? Majority do, as long as you pick the funds yourself and do not do the "my kid has X years until starting college". The tax benefits from tax free growth is huge. We aimed to underfund, but in reality if you are worth that much, just fund as you see fit, and leave the rest in for future generations. The 50K left in my one kid's 529 could be enough in 25+ years for one grandkid to go to college, all while it's in aggressive growth funds for now and we don't pay taxes. So the $10K we put in 15+ years ago will pay for a grandkids full college most likely.

Like I said, we did fund them out of an abundance of caution. We weren't able to deduct at all (HHI around 1M annually) on either federal or state.

I will say, I've also long believed education is in a bubble that will burst, and this adds to my skepticism of 529s. And also, we ended up moving to a state that mostly covers in-state tuition, which makes me even more blasé about it.

We get a small state deduction on well over 1M HHI.

[Anonymous]

Anonymous wrote:

Anonymous wrote:hah, you'd laugh at us then. We pay $86 x 3 for private lessons a week. Two kids do tennis, one does gymnastics. We also paid for them to take private skiing and snowboarding lessons back when they were first learning.

However, it actually makes a huge difference in outcome. My daughter was struggling to get her back handspring with a year's worth of group lessons. Nails it in one month of 2 private lessons a week. Now is moving on to a roundoff back tuck. With the skiing - now they can all keep up on black diamond trails. Makes family ski trips more fun for everyone.

Anyway, our fixed expenses are low (no mortgage or other debt) and we make more than enough money to afford all of this so I don't see the problem with it.

It’s the little things I guess. How do you have no mortgage? Family help or you paid it off? How much mortgage did you have and good old are you?

Bought in 2005, always had a -5 year mortgage, refinanced a couple times as rates lowered, then paid it off

[Anonymous]

Anonymous wrote:
My husband was a war refugee, and now spends his considerable wealth on our kids' education and activities. Not on himself (and he grumbles about any expense that's not directly tied to some financial or educational investment). The frugality is strong with him, except when it comes to our children's potential.

+ we don’t spend our money on anything except education.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Do you feel like you need to spend ridiculous amounts of money on your kids like all the other UMC/Rich people? My circle is mostly these types, myself included. We grew up in divorced and/or low income households often where our parents made less than 50k and we all now make 300-400k in our early 30’s. We all find it crazy how people think they need to pay for expensive tutoring, private schools, travel teams, etc when we had none of that and turned out fine. One of my friends just had a baby and said he doesn’t plan on saving for their college education.

Dumbdedumm. It’s so blue collar thinking to not value education.
Does he think his kids will just be lucky and land in fortunate circumstances like he did? 400k isn’t enough to trust fund his kid, so what’s his plan? Or is that too UMC for him to consider?

College is only like 50k per year or less in most cases. So you can just pay for it, like other expenses, without needing to "save" for it. I think it's crazy when I read about how "blue collar" it is not to save for it. It's not a big enough expense to require saving.

It's blue collar thinking to forego straightforward, tax preferred savings vehicles for expected expenses.

There's no federal tax deduction

Growth is tax free- that is a massive benefit

and generally no state tax deduction for people in the highest tax categories.

that is just wrong

The only advantage is tax free growth.

that can be 10s of thousands of dollars worth of growth

And 529s don't tend to have great growth performance

my 529 is in the same vanguard funds as my IRA with the same fee structure

so there's opportunity cost, and the risk of overfunding.

then you roll it into a Roth IRA or keep it there and your grand kids have an extra 20 years of growth and college paid for from birth

I don't think funding a 529 is as straightforward for people earning a lot of money. Took a lump sum and funded 529s from the standpoint of risk management-- what if we lose everything type scenario. But as a matter of financial management, it can make a lot of sense for families to just pay for college each year without saving.

You sound like someone who is terrified of the market and that's fine, but compound growth is what sustains family wealth

We did fund them and we are very heavy into the market. But 529s are one of many financial products and they appear to be geared more at middle class people who need to save money to send their kids to college. Once you're at an income that you can easily just write a check for it, it's much less appealing. What I'm mainly reacting to is the concept that if you don't fund a 529, that means you have no intention to pay for your kid's college. I suspect many of not most people in the income level we are at are not overly concerned about 529s. College costs the same as private school; no one saves for over a decade to fund that.

Still do not understand the "much less appealing" aspect. Even if you are wealthy, why not take advantage of tax free growth? That's what rich/UMC people do. You take advantage of any and all tax breaks you can get (since there are not many). So since you will be paying for education anyhow, why not get some tax benefits? And if you overfund, then just leave it there for future generations. The rich look for any way to make money/save on taxes and this is a no-brainer.

It seems like such a marginal amount of tax savings to worry too much about. Like I said several times, we funded it. But I don't view it as a huge benefit for funding college, it might save like 10 or 15k, which isn't game changing.

I'm worth mid 8 figures, but part of how you get there/maintain it is to still value money. If I can save/earn an extra 10-15K, I'm all for it. That's 15K I can donate/spend elsewhere. That's a significant amount!!!

I'm from generation wealth and you know how my family has preserved it? By being really effing cheap and taking every possibly tax advantage over the years, even to save a "measly" 15k. Why would you ever leave money on the table like that.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Do you feel like you need to spend ridiculous amounts of money on your kids like all the other UMC/Rich people? My circle is mostly these types, myself included. We grew up in divorced and/or low income households often where our parents made less than 50k and we all now make 300-400k in our early 30’s. We all find it crazy how people think they need to pay for expensive tutoring, private schools, travel teams, etc when we had none of that and turned out fine. One of my friends just had a baby and said he doesn’t plan on saving for their college education.

Dumbdedumm. It’s so blue collar thinking to not value education.
Does he think his kids will just be lucky and land in fortunate circumstances like he did? 400k isn’t enough to trust fund his kid, so what’s his plan? Or is that too UMC for him to consider?

College is only like 50k per year or less in most cases. So you can just pay for it, like other expenses, without needing to "save" for it. I think it's crazy when I read about how "blue collar" it is not to save for it. It's not a big enough expense to require saving.

It's blue collar thinking to forego straightforward, tax preferred savings vehicles for expected expenses.

There's no federal tax deduction

Growth is tax free- that is a massive benefit

and generally no state tax deduction for people in the highest tax categories.

that is just wrong

The only advantage is tax free growth.

that can be 10s of thousands of dollars worth of growth

And 529s don't tend to have great growth performance

my 529 is in the same vanguard funds as my IRA with the same fee structure

so there's opportunity cost, and the risk of overfunding.

then you roll it into a Roth IRA or keep it there and your grand kids have an extra 20 years of growth and college paid for from birth

I don't think funding a 529 is as straightforward for people earning a lot of money. Took a lump sum and funded 529s from the standpoint of risk management-- what if we lose everything type scenario. But as a matter of financial management, it can make a lot of sense for families to just pay for college each year without saving.

You sound like someone who is terrified of the market and that's fine, but compound growth is what sustains family wealth

We did fund them and we are very heavy into the market. But 529s are one of many financial products and they appear to be geared more at middle class people who need to save money to send their kids to college. Once you're at an income that you can easily just write a check for it, it's much less appealing. What I'm mainly reacting to is the concept that if you don't fund a 529, that means you have no intention to pay for your kid's college. I suspect many of not most people in the income level we are at are not overly concerned about 529s. College costs the same as private school; no one saves for over a decade to fund that.

Still do not understand the "much less appealing" aspect. Even if you are wealthy, why not take advantage of tax free growth? That's what rich/UMC people do. You take advantage of any and all tax breaks you can get (since there are not many). So since you will be paying for education anyhow, why not get some tax benefits? And if you overfund, then just leave it there for future generations. The rich look for any way to make money/save on taxes and this is a no-brainer.

It seems like such a marginal amount of tax savings to worry too much about. Like I said several times, we funded it. But I don't view it as a huge benefit for funding college, it might save like 10 or 15k, which isn't game changing.

I'm worth mid 8 figures, but part of how you get there/maintain it is to still value money. If I can save/earn an extra 10-15K, I'm all for it. That's 15K I can donate/spend elsewhere. That's a significant amount!!!

+1
I really don't get the people who are too rich to care about these things but somehow have time to post about it on a forum. It takes no more time to do it the optimized way than not--you just set it in motion, automate it and it's done. You can even frontload it and then get the state tax benefit each year. 529s are especially good for wealthy people as they offer a way to do generational transfers easily now that stretch IRAs are gone. For instance, I'm still contributing to my kid's 529 even though he's out of college, when he has a kid I'll change the beneficiary to the kid and make my kid my contingent owner if my spouse and I die. Tax deferred growth for multiple generations that must go to education (which I value). If it grows to more than their kid needs, they can pass the extra to the next. It's a great tool to fund education for generations--especially now that it can be used for privatek-12 or college and the extra can be rolled over into the beneficiaries IRA.

[Anonymous]

Anonymous wrote:I think people just raise their kids based on what worked in their personal experience. If someone grew up poor and in public school and without lots of lavish toys and then did well (bootstraps!), they’re disproportionately likely to think the same will work for kids based on their priors. If someone raised with lots of privilege and has the ability to pass that on, likely will offer kids privilege. I personally fall in my own weird camp on raised in poor-ish family but went to a fancy private school on scholarship and this attribute much of my success to the influence of my fancy private school and the friends and community offered to me that started with that - and relatively rich now and more likely to send kids to private.

This also describes me.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Do you feel like you need to spend ridiculous amounts of money on your kids like all the other UMC/Rich people? My circle is mostly these types, myself included. We grew up in divorced and/or low income households often where our parents made less than 50k and we all now make 300-400k in our early 30’s. We all find it crazy how people think they need to pay for expensive tutoring, private schools, travel teams, etc when we had none of that and turned out fine. One of my friends just had a baby and said he doesn’t plan on saving for their college education.

Dumbdedumm. It’s so blue collar thinking to not value education.
Does he think his kids will just be lucky and land in fortunate circumstances like he did? 400k isn’t enough to trust fund his kid, so what’s his plan? Or is that too UMC for him to consider?

College is only like 50k per year or less in most cases. So you can just pay for it, like other expenses, without needing to "save" for it. I think it's crazy when I read about how "blue collar" it is not to save for it. It's not a big enough expense to require saving.

It's blue collar thinking to forego straightforward, tax preferred savings vehicles for expected expenses.

There's no federal tax deduction

Growth is tax free- that is a massive benefit

and generally no state tax deduction for people in the highest tax categories.

that is just wrong

The only advantage is tax free growth.

that can be 10s of thousands of dollars worth of growth

And 529s don't tend to have great growth performance

my 529 is in the same vanguard funds as my IRA with the same fee structure

so there's opportunity cost, and the risk of overfunding.

then you roll it into a Roth IRA or keep it there and your grand kids have an extra 20 years of growth and college paid for from birth

I don't think funding a 529 is as straightforward for people earning a lot of money. Took a lump sum and funded 529s from the standpoint of risk management-- what if we lose everything type scenario. But as a matter of financial management, it can make a lot of sense for families to just pay for college each year without saving.

You sound like someone who is terrified of the market and that's fine, but compound growth is what sustains family wealth

We did fund them and we are very heavy into the market. But 529s are one of many financial products and they appear to be geared more at middle class people who need to save money to send their kids to college. Once you're at an income that you can easily just write a check for it, it's much less appealing. What I'm mainly reacting to is the concept that if you don't fund a 529, that means you have no intention to pay for your kid's college. I suspect many of not most people in the income level we are at are not overly concerned about 529s. College costs the same as private school; no one saves for over a decade to fund that.

Still do not understand the "much less appealing" aspect. Even if you are wealthy, why not take advantage of tax free growth? That's what rich/UMC people do. You take advantage of any and all tax breaks you can get (since there are not many). So since you will be paying for education anyhow, why not get some tax benefits? And if you overfund, then just leave it there for future generations. The rich look for any way to make money/save on taxes and this is a no-brainer.

It seems like such a marginal amount of tax savings to worry too much about. Like I said several times, we funded it. But I don't view it as a huge benefit for funding college, it might save like 10 or 15k, which isn't game changing.

I'm worth mid 8 figures, but part of how you get there/maintain it is to still value money. If I can save/earn an extra 10-15K, I'm all for it. That's 15K I can donate/spend elsewhere. That's a significant amount!!!

I'm from generation wealth and you know how my family has preserved it? By being really effing cheap and taking every possibly tax advantage over the years, even to save a "measly" 15k. Why would you ever leave money on the table like that.

It honestly sounds like none of you know how to make money so you’re hell bent on saving every last penny.

[Anonymous]

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Anonymous wrote:Do you feel like you need to spend ridiculous amounts of money on your kids like all the other UMC/Rich people? My circle is mostly these types, myself included. We grew up in divorced and/or low income households often where our parents made less than 50k and we all now make 300-400k in our early 30’s. We all find it crazy how people think they need to pay for expensive tutoring, private schools, travel teams, etc when we had none of that and turned out fine. One of my friends just had a baby and said he doesn’t plan on saving for their college education.

Dumbdedumm. It’s so blue collar thinking to not value education.
Does he think his kids will just be lucky and land in fortunate circumstances like he did? 400k isn’t enough to trust fund his kid, so what’s his plan? Or is that too UMC for him to consider?

College is only like 50k per year or less in most cases. So you can just pay for it, like other expenses, without needing to "save" for it. I think it's crazy when I read about how "blue collar" it is not to save for it. It's not a big enough expense to require saving.

It's blue collar thinking to forego straightforward, tax preferred savings vehicles for expected expenses.

There's no federal tax deduction

Growth is tax free- that is a massive benefit

and generally no state tax deduction for people in the highest tax categories.

that is just wrong

The only advantage is tax free growth.

that can be 10s of thousands of dollars worth of growth

And 529s don't tend to have great growth performance

my 529 is in the same vanguard funds as my IRA with the same fee structure

so there's opportunity cost, and the risk of overfunding.

then you roll it into a Roth IRA or keep it there and your grand kids have an extra 20 years of growth and college paid for from birth

I don't think funding a 529 is as straightforward for people earning a lot of money. Took a lump sum and funded 529s from the standpoint of risk management-- what if we lose everything type scenario. But as a matter of financial management, it can make a lot of sense for families to just pay for college each year without saving.

You sound like someone who is terrified of the market and that's fine, but compound growth is what sustains family wealth

We did fund them and we are very heavy into the market. But 529s are one of many financial products and they appear to be geared more at middle class people who need to save money to send their kids to college. Once you're at an income that you can easily just write a check for it, it's much less appealing. What I'm mainly reacting to is the concept that if you don't fund a 529, that means you have no intention to pay for your kid's college. I suspect many of not most people in the income level we are at are not overly concerned about 529s. College costs the same as private school; no one saves for over a decade to fund that.

Still do not understand the "much less appealing" aspect. Even if you are wealthy, why not take advantage of tax free growth? That's what rich/UMC people do. You take advantage of any and all tax breaks you can get (since there are not many). So since you will be paying for education anyhow, why not get some tax benefits? And if you overfund, then just leave it there for future generations. The rich look for any way to make money/save on taxes and this is a no-brainer.

It seems like such a marginal amount of tax savings to worry too much about. Like I said several times, we funded it. But I don't view it as a huge benefit for funding college, it might save like 10 or 15k, which isn't game changing.

I'm worth mid 8 figures, but part of how you get there/maintain it is to still value money. If I can save/earn an extra 10-15K, I'm all for it. That's 15K I can donate/spend elsewhere. That's a significant amount!!!

I'm from generation wealth and you know how my family has preserved it? By being really effing cheap and taking every possibly tax advantage over the years, even to save a "measly" 15k. Why would you ever leave money on the table like that.

It honestly sounds like none of you know how to make money so you’re hell bent on saving every last penny.

This is weak trolling. 529s are an effective tax avoidance vehicle that has little cost, particularly compared to the tax savings. Unless you have a family office managing your massive wealth, you can get off your high horse.

[Anonymous]

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Anonymous wrote:

Anonymous wrote:Do you feel like you need to spend ridiculous amounts of money on your kids like all the other UMC/Rich people? My circle is mostly these types, myself included. We grew up in divorced and/or low income households often where our parents made less than 50k and we all now make 300-400k in our early 30’s. We all find it crazy how people think they need to pay for expensive tutoring, private schools, travel teams, etc when we had none of that and turned out fine. One of my friends just had a baby and said he doesn’t plan on saving for their college education.

Dumbdedumm. It’s so blue collar thinking to not value education.
Does he think his kids will just be lucky and land in fortunate circumstances like he did? 400k isn’t enough to trust fund his kid, so what’s his plan? Or is that too UMC for him to consider?

College is only like 50k per year or less in most cases. So you can just pay for it, like other expenses, without needing to "save" for it. I think it's crazy when I read about how "blue collar" it is not to save for it. It's not a big enough expense to require saving.

It's blue collar thinking to forego straightforward, tax preferred savings vehicles for expected expenses.

There's no federal tax deduction

Growth is tax free- that is a massive benefit

and generally no state tax deduction for people in the highest tax categories.

that is just wrong

The only advantage is tax free growth.

that can be 10s of thousands of dollars worth of growth

And 529s don't tend to have great growth performance

my 529 is in the same vanguard funds as my IRA with the same fee structure

so there's opportunity cost, and the risk of overfunding.

then you roll it into a Roth IRA or keep it there and your grand kids have an extra 20 years of growth and college paid for from birth

I don't think funding a 529 is as straightforward for people earning a lot of money. Took a lump sum and funded 529s from the standpoint of risk management-- what if we lose everything type scenario. But as a matter of financial management, it can make a lot of sense for families to just pay for college each year without saving.

You sound like someone who is terrified of the market and that's fine, but compound growth is what sustains family wealth

We did fund them and we are very heavy into the market. But 529s are one of many financial products and they appear to be geared more at middle class people who need to save money to send their kids to college. Once you're at an income that you can easily just write a check for it, it's much less appealing. What I'm mainly reacting to is the concept that if you don't fund a 529, that means you have no intention to pay for your kid's college. I suspect many of not most people in the income level we are at are not overly concerned about 529s. College costs the same as private school; no one saves for over a decade to fund that.

Still do not understand the "much less appealing" aspect. Even if you are wealthy, why not take advantage of tax free growth? That's what rich/UMC people do. You take advantage of any and all tax breaks you can get (since there are not many). So since you will be paying for education anyhow, why not get some tax benefits? And if you overfund, then just leave it there for future generations. The rich look for any way to make money/save on taxes and this is a no-brainer.

It seems like such a marginal amount of tax savings to worry too much about. Like I said several times, we funded it. But I don't view it as a huge benefit for funding college, it might save like 10 or 15k, which isn't game changing.

I'm worth mid 8 figures, but part of how you get there/maintain it is to still value money. If I can save/earn an extra 10-15K, I'm all for it. That's 15K I can donate/spend elsewhere. That's a significant amount!!!

I'm from generation wealth and you know how my family has preserved it? By being really effing cheap and taking every possibly tax advantage over the years, even to save a "measly" 15k. Why would you ever leave money on the table like that.

It honestly sounds like none of you know how to make money so you’re hell bent on saving every last penny.

I mean I know you're just trying to be an ass, but you kind of hit the nail on the head without realizing it. The point of generational wealth is to make sure everyone will be taken care of even if someone is a dud. The whole point it to preserve wealth. I don't want my grandkids to starve because my idiot kids decided to go to art school, just like my grandparents wanted to make sure my cousins are ok even though my uncle decided to never work. You do that by saving every last penny.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Do you feel like you need to spend ridiculous amounts of money on your kids like all the other UMC/Rich people? My circle is mostly these types, myself included. We grew up in divorced and/or low income households often where our parents made less than 50k and we all now make 300-400k in our early 30’s. We all find it crazy how people think they need to pay for expensive tutoring, private schools, travel teams, etc when we had none of that and turned out fine. One of my friends just had a baby and said he doesn’t plan on saving for their college education.

Dumbdedumm. It’s so blue collar thinking to not value education.
Does he think his kids will just be lucky and land in fortunate circumstances like he did? 400k isn’t enough to trust fund his kid, so what’s his plan? Or is that too UMC for him to consider?

We don’t need to save because the family trust has individual accounts within the main account. My FIL put money in every year and we spent about $40,000 a year from it. My oldest has finished her education and it was fully paid for. I don’t think he ever set aside “college” accounts and “house accounts”. Just paid as the bills came in.

I know other families who never saved for college. One friends husband’s income went up astronomically over 20 years and he paid for four colleges in a row with monthly payments.

Don’t be so quick to judge the way other people do things.

[Anonymous]

We spend a ton on sports and music as our kid really enjoys it. Don't expect them to do the sport in college, music maybe. Why not? I am glad they found things that interest them and they enjoy. I'd rather spend money on that than a fancy house, trips, clothing, purses.