California 529 (scholar share)

Thanks buyinghouse.

1 Like

Mothers who renounce to a payday for the sake of their children are my admiration. You are one of them. :heart_eyes:

1 Like

Verifiable facts aren’t personal attacks. They are facts.

1 Like

Net worth != Intelligence :grinning:

Wisdom != Intelligence :grin:

Net worth is outcome of your choices

Wisdom comes from experience

2 Likes

Wisdom comes from lots of years of living on this earth, nothing to do with money nor materialistic endeavors.

Ask the lottery winners that have gone BK. Or, as an immigrant, ask yourself: Why didn’t I do this “over there”?

Wisdom is knowing how to keep your mouth shut instead of praising yourself when nobody is asking your qualifications. That is called Narcissism.

And before opening mouth, verify foot, you may be stepping into poop. Like berating anybody for mentioning black, when the topic is about colors. You really leave a feeling you are in it for the sake of contradicting and being looked at as an idiot.

See how you don’t need to own 2 phds to say something gracious? :laughing::laughing::laughing:

Wisdom is knowing you’re going to get called out for being a fraud and keeping your mouth shut. That way you don’t get exposed over and over.

Also, if you’re lecturing people on how they are idiots, don’t understand, are too negative to get it, etc. Then you should be ready to withstand scrutiny of your qualifications and your track record of success. When their qualifications and success are greater than yours, you should stop lecturing them and shut up. You might just learn something.

1 Like

You can’t even write a post without lying. I didn’t say the illustration was wrong. Your description of it is wrong. It’s like you show a picture of the sky and tell us it’s the ocean. Anyone that can read basic financial numbers realizes your description of the illustration ranges from complete ignorance to fraud.

Do they look at asset? Say you own 5 million dollar rentals and have a low income but 3M equity, can your kids still qualify for financial aid?

I think that primary home is not considered. If you own a 10M primary home and no rentals, no stocks, have a low income from a part time job, your kids can still qualify for financial aid.

I’m pretty sure they look highly at assets. But I think they do exclude primary now. So you’re probably right about what you said. That said, you’re going to need some income to pay your property tax… even assuming you paid off the house already.

So what’s the TL;DR; of this thread?

My TL;DR from back in the day was:

  1. 529 limitations and lack of deduction in cali makes it not worth it.
  2. Buying a rental with some appreciation potential and cashflow (even if it’s a future cashflow) might be worth it. If cashflow becomes great, it’s great. It’s also an asset for the child potentially exempt from estate tax (11M limit).
  3. 529 is counted as an asset for financial aid, at least some percantage of it. But some grandparent trick might be doable.

How about keeping all these behind trusts & llc & corp etc? What’s the best way to limit negative impact on financial aid applications?

1 Like

If you place your rental property in a LLC, you are still the owner of the LLC. How to report LLC asset? Is it repaired to list LLC asset?

I did not have 529 plan, never had money for that, even paying low 5%-6% for 401k when I started in BA. My two kids completed colleges, paid by me. I took from two sources, one from my income and another from HELOC primary home.

Colleges have few types of assistance,

  1. Grants (I think fed or state or some other grants) - Exceptional candidate gets it, but that is limited may be 30% of fees. They also need to maintain good grades. Tough to get it, but it is based on her/his skills.

  2. Low cost loans (2.8%) ==> Most of the Childs won’t get this if parents joint income is above 80k (I do not know current limit)

  3. High cost loans (6.8%) ==> Rich colleges give them, but no parents (if they have money) prefer it. I took HELOC (3.25% and tax write off) instead of this.

  4. Research or Teaching assistance ==> My kids worked 20 hours in school and received it. They will get 1099 and file tax on it. Worth doing it, rarely kids get it first year, but likely from 2nd year onwards.

  5. External part time work ==> Many companies come to college for internship. Worth going through as kids will have hands on experience with real environment. My kids worked during every summer break. They will get 1099 and file tax on it.

My friend makes 529 contribution, just 500/month/kid. He said it is perfectly fine as this streamline his burden and help this handy during their study times. I do not know about it, but he said it varies state by state and education must be in those states. He does not plan to send them out of bay area and it is fine for him.

Aside the above, 4) and 5) are really good for kids. Since I (we both) firmly believed that I need to fund their education, I have opened a Roth IRA on kids name, filed tax separately and contributed full Roth every year based on their income. If properly invested/grown, it will give them tax free 1M by mid 60s !

Do not forget Roth IRA.

The one I missed doing is buying a small condo for my kid near by college. This would save you his/her rent, but gives a eternal cash flow. I missed it hesitating to do. Do not miss yours…Do not hesitate if you can.

4 Likes

You touched all the good points, thank you.