Are 529's Really The Best Investment For College?
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- Опубликовано: 27 сен 2024
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Guys - I’m a doctor (MD board certified pediatrician with my own practice). I’ve been asked ONCE in twenty years where I did undergrad, maybe twice where I went to medical school, and not a single time where I did residency training. I had a full scholarship to a state school and the Army paid for medical school. Zero debt higher education is possible!
Similar. I went to state schools on scholarship for undergraduate and medical school. I can't remember a patient asking me where I went to undergrad and med school.
Wow. That is an awesome deal!
Because patients can search your bio before they choose to go with you.
@@KS-cl8br maybe, but reputation and subsequent word of mouth advertising seem to be much more beneficial than those credentials on our website and hanging on my wall.
I will admit that in the world of of the “ivory tower” programs, one’s pedigree makes a difference. My argument is that it all depends upon what your goal is - neurosurgery at Mass General? Probably need that Ivy League education. Private practice pediatrics in a mid-sized city? Not nearly as important. Also, I had classmates at my small state school attend Ivy League medical, law, and graduate schools.
I’m just very against folks getting themselves in an impossibly deep financial hole for their education.
This makes me want to ask my doctors loll
they make 500k and they're afraid of paying for college? I'm crying
Oh brother, 500k? Get off the phone.
George and Ken were the only ones afraid of anything, the caller just wanted investment advice not a lecture about not going to ivy league schools.
@@Lon1001 They were smart to uncover the bigger problem in the caller's situation. If she listens to their advice, it will save her hundreds of thousands of dollars.
It's because they are levered to the hilt
@@JegtoDFW504 you see I hate these calls man. It’s like a slap in our faces. I can’t watch
I’d rather have $800k than a degree lol
Fair, but in 20 years that $800k will only be worth $400k today. And that’s at normal rates of inflation. Not the current rate though…
@@BabyGators Can’t leave it sitting around as cash, but to give that amount to a university in exchange for a degree is silly.
@@Fullofbull58 agree there
If you are like most people in a few years you would have neither.
@@edhcb9359 it’s good not to be like most people
It is not about top-tier schools; it is about finding the best fit for your kids.
Top tier schools generally offer the best scholarships.
Yeah, you’re future employer won’t care what school you went to. What they care about is your skills and if you can do the job.
@@jeffmiesen Maybe at the jobs that you’ve applied to, but believe me at a certain level they do care.
@@edhcb9359 I’m an engineer and everyone could care less on where I got my degree. At the end of the day, you just have a piece of paper that says you got a degree in so and so. What really matters is how you apply yourself.
@@jeffmiesen At your level, yes.
This was a great video. I have 4 kids and one went to Indiana University, one to University of Oklahoma, Vanderbilt and this last child Purdue. I made my kids do cost spreadsheets for every school they wanted to go to. You had to prove to me the whys and how. All 4 college educated and debt free. The Vandy child was a full ride and the others were tuition free. I'm not killing myself by having so much debt and now I can't live. I have a cousin who happens to be a MD and he started at a community college and worked his way up. Great video.
That's incredible! You've set your kids up for incredible success!!! Congratulations!
Top colleges are about making connections. That’s really what you pay for
That may be true if you join a fraternity/sorority. For everyone else, top colleges are about learning how to work hard. I went to both an average college and a top-tier college in engineering. They taught all the same stuff, but the top-tier college gave far more challenging homework assignments and expected more out of students. That’s why graduates of top-tier universities are more valuable in the marketplace - they are accustomed to working very hard.
@@markroberts8975 that is somewhat true. You can still accelerate your career with connections made there. I think both your point and mine are valid.
I assume she is in her late 20's or possibly early 30's. If you're making $500K / year, the baby steps aren't baby steps, they are giant leaps and bounds. The steps aren't steps....All she has to do is put $100K in the 529 for each kid. Put $500K in the retirement accounts. You do both of those early enough, you just use time on your side to watch it grow. This is part of the coast FIRE calculation that works.
I’m here taking notes! I have fully funded my emergency fund now moving on to investment accounts 🙂
500k household income and you have a question like that and don't clearly understand you can cash flow college? I need to know what they do for a living because I'm definitely doing something wrong.
And she wasn't even sure it was 500k...she's definitely been sleeping under a rock!!
Guarantee her husband is making all the money, she just spends it 😁
Doesn’t seem those top tier degrees helped them think logically.
Rough times. I pray that they can get though all of it.
Man I feel that. How ever will they make it. Le sigh
Wrong line of reasoning. The patient doesn’t ask for where the doctor went to college, but the hospital administrators did before they rolled out the offer.
And the hospital administrators don’t care either about a doctors alma mater. The administrators are just checking to make sure the applicant has the necessary credentials for the job that is being filled.
Makes 500k, sounds like she makes 30k... perhaps that name brand school really does count 😂
It’s all about connections. Fancy college=connection
Yea I’m really interested to know what scholarships she has personally received 🥴🤦🏾♂️🤷🏾♂️✊🏾
What is this “top tier” school!?!?
It sounds like she wants a good quality of education for her children and that costs money.
Schools matter.
I have friends that went to better universities than me and I can tell you that even though i have the same job, the value of a good education surpassed how much you make.
Just a thought.......
That's funny. Because the college graduates that work for me went to top tier schools. I don't have a college degree. Yet I'm a millionaire at 40.
But I'm just a dumb truck driver.
@@I_like_turtles_67 🤣🤣. With their doctorate in left handed puppetry.
@@Primitive_Code I have a neighbor who went to college. She blew about 70k to realize she could make more money selling houses. Got all her realtor licenses and sells 700k+ homes in the bay area. I tired to tell her college was a waste of time.
Totally admire you!!!+
That was a great doctor analogy.
This video made me even less impressed with "top tier colleges"
4:05 😂wow thats a good one Ken Coleman you got me thinking on that one !!!!!!!!!!! Nice love it !!!
Better than sinking your $ into a 304.
Haha...got it🤣
Every doctor I have had always has all their diplomas, degrees and certificates plainly on display and I know where they all went to medical college. If I was rich and money was no object it might actually matter where that degree is from.
Also, the caller is in the top 0.1%, doesn't matter where they put their kids college fund because it will be amply funded.
They act astonished at the amount, but tuition rates have far outpaced inflation and wage growth, and if it continues at current rates, yeah, $800k is about average for a higher-end university education (including room & board).
Not nobody, the people who matter do care where you go to school. Your employer, your grad school/medical school admissions committee, your residency / fellowship admissions committee. Your social circle and your partner’s mom and dad. Sure, lots of people care. We say they don’t, but that is a big lie.
That’s true. It matters when it comes to getting hired to more prestigious jobs. It sucks, but yeah.
Ken's sweater game is strong...
500k income is actually 300k take home, after taxes and other deductions. So huge difference. So they need to think about options how to save for kids college and so forth. I would do custodial brokerage account instead of 529.
You're think small why not both or multiple accounts
Where you go to college DOES matter for top jobs in large firms like PWC and many famous law firms. I worked in a courthouse and the judge would toss any resume from students that went to lower level schools and had GPAs lower than 3.3. Also, if you go to a small community college, you will most likely get overlooked compared to someone who goes to Yale. Does that matter for everyone? No, but this is how rich kids stay rich, by getting top paying jobs out of school. And kids of blue collar workers like me, get the bottom of the barrel jobs until we have enough working experience to move up. I’m finally making more than my rich friends in my late 30s but it took a long time.
I worked in higher ed for over 20 years. Degree paper matters, college name doesn't. Only bragging rights.
Only if you’re in the humanities where high degrees don’t mean much. Not if you’re in the sciences.
That’s only in the fields that don’t matter. In science, it’s meritocracy, or at least it was before the ‘green’ movement hijacked true science.
I'm an amateur with a portfolio of 7k but it's hard for me to build confidence. I want to invest another 70k over a one month span, but I want to be strategic about doing it so I can grow more and not stay stagnant. Any stock suggestions?
Not offering any particular advice, but I can assure you that it's not as hard as many people think it is. Ordinary investors lack the requisite level of diligence, so having a financial advisor on board is usually highly beneficial. In the market, this is how people generate enormous profits.
I agree. There's a lot of potential in the market.
My friend introduced me to a financial advisor in 2023, and even though I was skeptical, I went on. I finally was making enough monthly dividend to quit my soulless job and pursue my dream to start a restaurant in New Jersey and still earn five figures in monthly dividends.
That's really great. I've tried doing some research myself to hire a financial advisor, but it's really overwhelming. Could you recommend who you work with, please?
Search him by His name "Chrissy Barymoer"
On f.a.c.e.b.o.o.k
How do you not know how much you earn a year? She sounded like very unsure if 500k?
NO! NEVER ASSUME your 529 will appreciate! It totally depends on the 529 you choose. Our daughter was gifted money by a dear relative to be designated toward college. Her dad and I immediately put it into a 529 out of Rhode Island in her name. Thank God we never added more to it, because by the time she went to college, it had lost 20% of its value!
Then you guys did something wrong.
@@MD-pz3cn Ergo, “NO! NEVER ASSUME your 529 will appreciate!”
Lol funny thing is if your kid had a full scholarship you dont have to worry about any side of this because one the school will be free. And two your money will be worth it anywhere they go because they are actually smart and focused.
If Ken doesn't care where his doctor went to school.
Will he be OK if his doctor went to Hollywood Upstairs Medical College?
He'd never know...
How about nationwide a permit on your license is due payable on your birthday amount and determined and we have a college fund colleges apply to, and if you’re on the payroll, they may even pay for upgrades expansion and certain percentage of that go to student loan forgiveness
Remember. You can also withdraw the monies you contributed (tax and penalty free) Example: If you contribute let's say $25k over the life of the 529. You can take back that $25k tax free, no penalties.
Not sure if this video was taken before this took place, but now if your child decides to not go to college or gets a scholarship, you can transfer the 529 into the child’s Roth IRA. Great deal!
Just put it in a regular brokrage.
Which though?
This is what I'm thinking..
Actually, I always look up what schools doctors went to when looking for one. Schools and where their residency was. It matters to me because there are tons of mediocre doctors out there. It’s absolutely not true that college does not matter. There are many companies out there that won’t even look at you if you’re not a graduate of certain top tier schools. Sad, but a fact. Her husband (they sound young) has a job that pays $500K in part because he graduated from such school.
There’s always a shortage of doctors whenever you go, so of course you don’t care where they trained, as long as they cure you. For some professions, the name brand does make a difference and make you stand out.
What professions?
A: Doctors do not “cure” people, they treat people with a plan they devise per the situation based on what they learned in undergraduate biological science studies and Med school.
B. Only in ridiculously rare occasions does school name matter, the vast majority of those rare occasions are in taking on a career as a professor at a prominent university.
There is no data whatsoever that shows an individual from a large name university outperforms, out-earns, or is more successful than an individual from a smaller university.
There is evidence that some individuals who graduated from prestigious universities are more prone to carrying a greater sense of entitlement into the workplace which often adversely affects their career with that employer.
In accounting, no one cares, except if you went to an online school. State schools have great accounting programs.
Uh no, I DO care about the training my doctor has had LOL
@@kbanghart Have you ever cared enough to ask where specifically they went to school, and would the answer affect your decision to continue using that doctor or not? That's the point.
If she could not figure this out by herself. I think that fancy school doesn't make you any smarter
She should just buy property for her children instead. Then they're set no matter what career they choose. They have a place they own that they aren't burdened by the debt of. $800k is much better spent there than in an education.
Can you please give your baby 800k when she grows up she will be much better off❤
I make $500,000/year and I have to pause to consider if I can cash flow my kids college tuition…..
Is this lady playing with Monopoly money? How can you NOT cash flow college making that amount?
Anyone arguing that fancy schools matter so much probably profit from your naivety
He asked if she thought the schools were worth it and was very dismissive even after finding out that they make $500k/year. Yes, it’s probably true that the average person will not benefit from going to an “elite” school, but it clearly worked for them. Most jobs probably don’t care where you went to school, but I would guess that it’s a leg in the door to some high paying jobs. In addition there is probably some preference at those high paying jobs when the other people at the company also went to that same school. If you just want a good paying job, it’s likely not needed. If you want a $500k+ job, it *might* make some difference. Maybe it’s more about making those connections than the actual education. Right or wrong, the host’s reaction was a little off-putting.
Where did the two hosts go to school? Asked nobody 😂
I wouldn't do these kind of plans. Just go through the community college and then state school route. Secure some scholarships and work on the side. No need to graduate with a big load of debt
Your child is three and you’re already deciding what college she’s going to? Lol hate to burst your bubble, but as a father of a 23-year-old college isn’t always their first choice. He is not making more than most of my friends with four year degrees
They make $500,000 a year. My gawd.
As a Harvard grad, I can tell you it ain’t worth it. I should’ve just gone to someplace below that level. It would’ve been a much better value. 4:40
this is good advice.
It doesn't matter to the patient where the doctor went to school, the practice that hires the doctor it does matter. I can't believe the strawman argument that is presented here. Usually I'm on board with you guys, but I think you missed the mark with your analogy.
Glad that someone else noticed this. Even college graduates commenting on here don't seem to understand it, saying "I've only been asked once!"....yeahh that's because we know there is a process in place with the hospital and you would have never gotten that spot without a respectable degree
They're missing the point that people follow the online calculators that in 18 years at 6% a year increase makes all colleges absurdly expensive.
Right, those calculators do tell people it will cost $600k - 800k in 18 years to send your kid to an out of state private school (i.e. ivy league)
500k it doesn't matter what she does lol
George, "Im confused. Where else would you put your kids college savings other than a 529". 🤔 odd response. Mom is asking about options! Mutual funds in the kid's names will pay for college and beyond. A 529 can Only be used for for college. Yeah it can be transferred to siblings (etc) but it can only be used for college.
And these people making 500k/yr should have no problem cash flowing their kids college- making it a mute point.
I want to know if it’s better for me to select strictly a Custodial IRA or a 529 account.
“It goes in tax free” @ 5:50…….does it though? Thought it was like a ROTH after tax investment.
My daughter turned 8 a few months ago. I have not started a 529 for her. Is it too late to get an account started and build some value for her? Thank you.
800k?
Is it 100% confirmed you can withdraw the 529K funds tax free? I have one for my daughter and it’s been very clear from the start that if the funds aren’t used towards tuition, room and boarding, books, etc. there would be a hefty penalty when withdrawing!😳
You need to use the funds for school as you say. If not, there are hefty penalties.
If your child receives a scholarship you can take a distribution from the 529 for that same amount without paying the 10% penalty, but the distribution would still be taxable
@@ryanwood1684 Wouldn't just the earnings on the distribution be taxable? As you can't deduct the 529 contribution?
@@joeb1522 Contributions to 529 plans are deductible for state income taxes. There are even a few states where you don't even have to contribute to your state's plan (you can contribute to other state plan) and you still receive the state income tax deduction. Check with your CPA
@@ryanwood1684 I'm a CPA (tax accountant). Many states allow you to deduct contributions. Contributions are non deductible for federal tax purposes. So you can always withdraw the contributions federal tax free. Maybe not state tax free, depending on the state laws.
Top colleges are a waste of money. You can get a great 100hr a week job with it and 150k job. Congrats
33.9 I just inherited from my late father after a legal battle with my sister who was withholding it I live in NYC and the property is in Houston Texas? need y'all advice
Billion, million, or thousand?
@@fonz-ys6xu more elaborate
@@fonz-ys6xu millions
I should've started with, sorry for your loss, and sorry to hear that it had to take a legal battle with your sibling to inherit anything.
I guess my biggest piece of advice would be to hire a financial advisor that you can trust! I wouldn't go taking too much advice from the average Joe an the internet! Good luck Mac, make your dad proud.
These guys are all over the place. They are too focused on putting down the expensive school to even understand her question.
Dude, Dave Ramsey just keeps finding new ways to piss me off. If it’s not judging somebody for their financial situation, it’s questioning somebody for this school. They chose to go to or doubting the effects of compound interest. This video is not about whether or not a 529 is worth it, and if it is, I’m not gonna watch that far into it. At the very least change the title to somethin like “ radio host ostracizes listener for going to a good college”
These interviewers asking all the wrong questions holy crap
I can't figure out how this caller can be making $500k/yr. My teenage daughter sounds more knowledgeable than her.
Hey, my dog is pretty smart!
If you're going to grad school, they care where you came from.
529 capital goes in tax free?
It’s post tax
Don't really mean any offense but this is what I would call a school snob. And I don't mean to be mean but our society is built this up the more you spend the better the education is I highly disagree. My wife on the other hand would disagree with me she thinks that a school's name really matters.
There is no tax deduction for 529 plan contributions. George misspoke. contributions grow tax deferred and withdrawals for qualified expenses are tax free, but there is not tripe tax advantage in a 529 plan like there is in an HSA for example.
I do have a question though . What's the best investment for retirement fund ? I have a Roth I have cds right now
Get Dave's book.
Get an etf find an advisor to help you
@@jonahlems4192 Fidelity is in that business!
I opened a 529 a year ago. Thank god I didn’t put more bc it is not worth it. Not enough time to do any real damage to today tuition.
Feel sorry for parents who make their kids do things because they did it
You can't really "make" your kids attend an ivy league. If their dumb, they won't get in.
Top tier schools are worth it. Only cherry picked data shows other
Nobody cares where you did the first couple of years of your undergrad. And when you go for grad studies, your undergrad is equally irrelevant. Community college and then transfer to a good state school from where you can get into Ivy league. And when it comes to medicine, no one gives a f. Once you are board certified, you are set.
@@mathisnotforthefaintofheart I mean you can find data to support that but you can also find tons of data showing the ivy league schools are clearly worth it. All about how you want to interpret the data.
@@mathisnotforthefaintofheart for example nation average starting salary for bachelors is like 52k. Average starting salary for bachelors from MIT is like 180k.
@@brendondowdy5651 MIT does not offer an undergrad in gender studies. Your data is not backed up by anything credible. Please show a credible link for your numbers.
@@mathisnotforthefaintofheart what are you talking about gender studies? And okay one second.
800k!?
I always check what med school the doctors i go to went to, and where they did their residency.
This lady…
Baa baa sheep … hope she learns how to grow food soon
🤦
Vocal uptalk! Please STOP!
She sounds really really silly
I call bullshi7 on the $500k. You wouldn’t need 529 with that, TRUST
You do realize there folks making over $500K but they’re living paycheck to paycheck?
It would help bringing your point through if you did not misspell
Unless they're doctors (or another rock-solid stable profession), they won't necessarily be making as much as $500K when their kids are in college more than 10 years from now. If that $500K is from a business, the business could shrink or go kaput. If it's from corporate jobs and they get laid off, the next jobs could pay a lot less than that.
These people need to realize, there really isn't such a thing as a top tier school, just an overpriced school
I went to a #1 school,
Highest Median Starting Salary from a public institution in the USA.
I went for FREE, a former alumnus offered to pay the $1000/yr in 1975
The school can matter. I know one place that shreds low ranked school job apps. Industry connections from professors are also a big deal.
At 5:50, George misspoke. Money does not go into a 529 plan tax free. Some states do allow a deduction when you contribute. Your federal return does NOT allow a deduction.
@@ryancraig4811 Good point. This show will struggle once Dave retires.
I noticed the same misspeak! Doesn't go in tax free, except there are some states that have some state tax break, including myself in NY (no state tax for $10k/yr of 529 contribution).
It's officially sweater season in the Kenneth household. What a great time to be alive.
A couple who makes $500k combined and they went to an elite college... but these hosts say it doesn't matter where you went to college.
If you can afford to send your kid to one of these schools then I'd do it because you're going to surround them with other smart and/or wealthy students. This network will put them on a better path in life, relationships, jobs, etc.
Now going into a ton of debt for these programs might not be a wise move but this couple should be multi-millionaires by the time their kids go to college.
This, I agree with you 100%. These people are closed mind. They have a narrative to stick to and disregard anything and everything in between. I hope she didn’t listen to these idiots. She is smart enough to figure out the best route for her kids.
I agree. Where you go matter. It might not be as huge as couple decade ago but it still matter. People might not check out where doctor go to school and did residency, but I do. Doctor need to be done at least decent college and residency hospital. I also check their reviews too. You get what you pay more. People cannot expect to go loser school and makes tons of money. Most do not. School provide foundation base. Avg folk need that foundation to mature to greatness
I don’t know man, they are making $500,000 a year. Sounds like that fancy school was worth it.
While I don't ask for physical diplomas, I do check where doctors/dentiats graduated from, as a part of their profile. I skipped one specifically that graduated from a Carribean medical school that did not have great references.
"top tier school" she doesn't know how much money she makes, can't figure out how to make things work to cash flow College with half a million coming in every year. Ya sorry, that "top tier" did nothing for you... My question is what does this person do with this level of intelligence to make that much money, sign me up!
5:46 saying that 529 contributions “go in tax free” is incorrect. Contributions are made after-tax although many if not most or all states do have tax advantages for contributions up to a certain amount annually.
Good video otherwise but that is a big distinction to make. 529 contributions are NOT like 401k contributions, for example
Kind shocks me when you have callers that seem a little clueless about there capabilities and making 500k a year ??? Weird
To be fair she met her husband prob at top tier school and I bet he makes the lions share lol
No one cares where I went as an undergraduate. I went to Carnegie Mellon for graduate school. It was very expensive, but I learned a ton. High-paying companies recruit from there. It was worth every penny in tuition. The medical field isn't a very good comparison with business and government consulting jobs. There aren't standardized certification processes and your degree does serve as a proxy for it.
Can I have my 8 minutes back. $500k household income?! Goh
Top tier universities do convey some benefits- they provide unique opportunities, offer connections, and open doors. But you wouldn’t know or appreciate that if you didn’t attend one. Whether it’s worth the cost of attending one over a good public university is a different question but don’t be fooled into thinking there are zero benefits to attending a top school.
A drivers license is a privilege if you have drivers license cars necessity
Should we $10 a month $120 a year due payable on it before your birthday to keep your license valid through over 24 million license drivers in California alone
But this would nationwide and the money would go to college fund which colleges would apply to students were not apply to this college
Every college student has to apply for financial aid and be very good so they’ll be sent out to every one who is registered to give financial aid to students $500 here $500 there
There is a lot of financially out there that’s student are not even aware about this financially application we go to everybody
He just mocked those people who went to name brand schools still calling into Dave Ramsey show. Really?
Horrible, horrible idea to even consider spending $800K on your child’s education. I spent about $30K on my bachelor’s degree 20 years ago and earn a very strong income as a Healthcare Executive. Please DONT waste your money on an elite school
My parents went to colleges 50 years ago paying less than $5k. You overpaid bro lol
Couple trust fund babies here...
My two sons are in college right now. I have 40k for each in two 529's to fund their tuition. I'm cash flowing the rest of the expenses. My older son is almost done with a bachelors degree computer science, with a minor in business and my younger son is half way through his associates degree in chemistry.
Her college was $40k per year but now it costs $800k for 4 years. She seems pretty clueless