XYZ's of Money - Lesson 2: Funding Kid's College

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Well, Alan, you're you're amazing and super honored to be on here.

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in an industry like this that are as real as Alan Akina.

And Alan, I thank you for what you do and how you serve these people so passionately. All right everyone, we're going to get started, and I just want to welcome all of you on Zoom, all of you on Facebook, to another edition of the XYZs of Money. My name is Alan Akina, and if you are joining us for Today's second lesson, and you were there last week, welcome back. Today we are going to talk about funding your kids' college education. This is lesson number 2 of XYZs. I'm sure most of you have kids, and as a parent, it is something that's internal. That motivates us to work hard, to do things for our family, for our kids, and one of the best things that we all know we can do Is give them opportunities to be educated, right? We know education is something that they'll have with them for the rest of their lives. So we always want to have them do good in school. We want to try to send them to the best schools and give them these chances, the chance to have success. And one of the biggest things you can do for your kids to set them up for success is to give them an opportunity to go to college. And not only go to college, but go to the best college that they can, that is for them. And, and there's so many different college options. We're going to talk about that. But I do want to put in a disclaimer because I do know this to be true, that college is not for everyone. Okay, for me, I was able to start One on One Financial and build it to an Inc. 500 company, a multi, multi-million dollar operation without a college degree. Now I do have one today because I went back and graduated, but I was a college dropout. Before I started One on One Financial. And so it doesn't necessarily have to be that way. I'm living proof, but I'm also a huge advocate of having kids go to college, and the numbers speak for themselves. At One on One Financial, we like to use numbers to help us to develop plans and give us ideas of what we can do. And I'm going to share with you some numbers of why I think college is is an excellent choice for the majority, not all, but for the majority. And so when you look at these colleges, right, there's all kinds of colleges out there from MIT to Harvard to Princeton and University of Hawaii and, you know, BYU. There's some great, great colleges out there. And they have the ability to give your kids a chance at really escalating their income. So here's some of the different degrees that, you know, we could get, you know, from our associate's degree, which is a 2-year degree, bachelor's, a 4-year degree, master's or an MBA, getting a PhD or specialty degrees. So those would be like, you know, maybe you're a coder or you go to coding school, learn how to build software and games. Maybe you'd go for, you know, like a beauty salon school, you Do things, you know, mechanic school. There's, there's all types of specialty schools that can put you in a position to increase your income when you start your career. And of course, there's professional degrees like being a doctor or a dentist or an attorney of those sorts. But let me share with you some charts. Okay, so this is, this is reports as of like, I think, a year or so ago. So look at the income scale by degree. Okay, so this is the median weekly earnings, and then I'll talk about the unemployment rate by education. This was in 2017. So for those that don't have a high school degree, weekly earnings is going to be about $500. But then go to an associate's degree where you're at, you know, $800 to $900 a week. Compare that to just a high school diploma where we're under $750. Then you go to a bachelor's, you're at almost $1,250, and then a master's at almost $1,500. You can see the professional degrees earn more on average than the doctoral degree because that's, you know, attorneys and doctors. But in general, and this is not for everyone, there's always people that break the mold like I did. Okay, but in— on, on an average, you will see that the more education we get And our kids get, the higher potential earnings they have. And this is weekly. So when you compound weekly earnings over a lifetime, right, 40 years of work, it is significant. That's significant. Now I want to share with you a chart by state. So look at this chart by state. Look at this, guys. Look at the chart here. So this is the difference in earnings. Those that don't have a college degree to those that do. Look at the gap between the two. So I know a lot of you are in Hawaii. Look at Hawaii. There is a 50% difference, okay, in earnings or income between graduates and non-graduates. So in Hawaii, If you're a graduate, you're going to earn— college graduate, you're going to earn 57% on average more than a nongraduate. If you're in California, I saw some of you in California, the numbers are even more disturbing. 133% difference in income. Some of you are in Utah, 68%. Las Vegas, 63%. Some of you are in Oregon or Washington, 86% in Washington. difference in pay. I mean, this is real numbers. This is a report by Business Insider. Okay, so now you take that one step further. So I'm talking about unemployment. So the more education you get, the less likely you are to be unemployed. So look at the rates here. A high school diploma, The unemployment rate is 3.7%. Compare that to a bachelor's degree at 2.2%. It's almost double, right? You're almost doubling. Then master's degree, you lessen your chance. Professional doctorate degree, you lower your chances of being unemployed and you increase the chances of earnings. The numbers are staggering, folks. It is, it is telling the truth. Now, the, the huge hurdle for this, right, we know this to be true, but the big hurdle is how do we pay for it, right? Because, because the college tuition has just skyrocketed. I mean, look at the— look at the average cost of tuition going up. So the light blue is private universities, the blue is out-of-state university tuition, and then red is in-state. I mean, the numbers are mind-blowing. Look at this report in another way. 2000 to 2020, the numbers consistently go up. And when I show you this, some of these things— so some of you know my daughter Kiani. Mm-hmm. She was helping me on the XYZs and the ABCs, so she Behind the camera. Just last week she was on a Zoom call. She's getting recruited by Harvard and Brown University. And they are— I mean, this is a staggering number, $70,000 a year to go to Harvard. Now, as a parent, do we want to deny— if our kids can get into school like this, do we want to deny them because of money? No, we don't. Exactly. If you have babies and any of you have a baby, Look at this. 18 years from now, according to CNBC, college could cost half a million dollars. Half a million dollars, guys. It's mind-blowing. Mind-blowing. That is why we need to be savvy. We need to be smart and we need to understand money. Look at debt. Now, this, this chart is a little old because the average individual Debt for students coming out of college is $35,000 now and over $1.5 trillion in total. In my opinion, this is probably the next bubble to burst in our, in our financial situation. But, but look at the middle here. So, so tuition has increased 1,120% since 1978. Compare that to this over the same period. to medical expenses, right? We like, we know medical expenses have gone through the roof, but that has only grown 600%. And food prices over the same period of time has gone up 244%. And our tuition is over 1,100%. And this is what probably holds great kids from going to some of the best schools is this student loan debt. And I know it's scaring people. So today I want to talk about the 4 options to help fund your kids' college education. Okay, so we're going to talk about scholarships, grants, financial aid, 529 college savings plan, Roth IRA, and then we're going to go into real estate. Okay, so this is the easiest and probably the most obvious. I'm not going to spend a lot of time here on this, but scholarships, grants, and financial aid— this is free money. Okay, so we start with free. And we go after all of the free opportunities. So there's scholarships, of course, athletic scholarships, academic scholarships. There's, there's skill-based scholarships and different things like music and dance and other things. Then there's grants like federal grants like Pell Grant and other types of grants that you can get for being a certain ethnicity. Then there's financial aid. These are need-based types of things. And all of these 3 do not need to be paid off. So this is far and above the best way to fund your kids' college education. It does take some digging, though. They just don't make it so obvious, like, okay, here's some money, guys, for school, go get it. It's not like that. There's, there's work that needs to be involved. There's digging around, there's searching, there's calling, there's email, there's persistence and following up. But if you do it right, this could be a huge blessing to you. It was for me and my family. My parents were not able to To help pay for my college. So fortunately, I was very blessed. Thank you, God, for that, to get scholarships and grants. So I got the Pell Grant, which was amazing. Then I got a Native Hawaiian scholarship just for being Native Hawaiian, and I was on the basketball team, so I got a basketball scholarship. And on top of that, I worked. I worked part-time as a janitor in the student center. So When I first— my first year in school, I worked from 6 AM to 8 AM and then 6 to 8 PM, and that was after practice, and then I'd go study. And so it was a lot of work, but in the end, I was able to cover all of my school, not come out with any debt, and I actually made money going to school. I made more than it cost me. So I would suggest treating this like a job. So my daughter She's a junior, so one of her jobs is to search every day. She has to look at a few things to find scholarship opportunities. And, and so if you treat it as a job, I mean, if you— let's say you go find a scholarship for $500. Well, $500 and your tuition is $20,000 or $50,000, it doesn't seem like a lot, but it all adds up. And if you think about it, if it took you 5 hours or your kid 5 hours to go find and apply and write the letter for it or your essay and do all that, it's like making $100 an hour. So it's definitely well worth it. And when you start to do these things, always start with the FAFSA. That's where they, they use things that they use the information, your financial information on the FAFSA for grants and financial aid. You can find the FAFSA by going to studentaid.gov. So studentaid.gov, they'll walk you through how to fill out the FAFSA. You do it right online and you do this as your kids are in high school, junior, senior year. I would also say apply for hundreds. Don't just do the obvious one, but go for hundreds of them. Why? Because you may only get 5 of them or 10, but you would never have got it if we didn't try. Okay, so I highly encourage you to go for hundreds, and there's, there's strategies behind that. So I had a question on the last broadcast. So I would have an essay. So you write a general essay about yourself, put a lot of time, make it good. Tell, tell us about yourself, right? Tell those schools about you and why you're so special. And then you customize that for each application, you customize it for each program or each grant or scholarship and make it specific. So you need to, you need to change it around, but the bulk of it could be written once. And the last thing I want to share with you here is myscholly.com. So this guy that created this app, he was on Shark Tank. Not sure if you've seen it. He was a student, created this app to help students find scholarship opportunities. It's $3.75 a month or $45 a year. And it's probably a good resource. I just had my daughter, as I was putting this together, she's using another app, but I gave her this to try out. So I don't have any personal experience with it, but from the looks of it, it looks pretty darn good. Okay, so that's scholarships, grants, and financial aid. And just know that 31% of college costs can be covered by scholarships and grants for most, most students. Okay, this is according to a report by Sallie Mae just last year. So again, it does pay to do these things. Now the second thing I want to talk to you about is what we call a 529 college savings plan. So here's the definition of it. It's, it's a tax-advantaged savings plan designed to encourage savings for future education. Now 529 plans, legally known as a qualified tuition plan, they're sponsored by states or agencies or universities. And they are authorized by the IRS. It's— that's why they call it the 529 plan, because it's 529 code. Okay, so here's the 2 different plans that fall under the 529. It's the 529 prepaid tuition plan and the 529 college savings plan. So I'm not a fan of the prepaid tuition plan. In my opinion, there's too much risk. With more downside than upside. And so I'm not even going to talk about that today because I'm basically— you're, you're buying tuition credits at today's price at a certain university in your state. That has to be in your state. And there's just too much risk with that and not enough advantages. So I'm not going to recommend it. But if you want to know more about it, go figure it out. Go look it up. The one I want to focus on is the, the savings plan. Okay, so here's 9 reasons that I, I like it. 9, 9 benefits. Number 1 is that the money that you put into the 529 savings plan can grow tax-free. Which means when you get your paycheck, it's already been taxed. So you're taking after-tax dollars. And putting it into the savings plan, the savings bucket, and it can grow without being taxed overall. So if you have a 5-year-old, it can grow for the next 14, 13, 14 years without any tax. And then you can withdraw the earnings from that tax-free if you use it for qualified educational expenses, which tuition, room and board, books, Books, fees, anything associated with with school. Okay, so that is huge. That's a federal tax-free growth. Okay, the second is there's some possible state income tax deductions. Okay, so depending on where you are, some states offer credits or for putting in money. And so in Utah, I have this. I have the five twenty nine for four my. Younger kids. The older kids, I wouldn't— they didn't really have this around when we were starting this, so I didn't do this. It was kind of new. I wasn't sure if it was going to last. But anyway, we get tax credits for our tax deductions and tax breaks for that. Number 3, the owner maintains control. So you, as the owner of this 529 college savings plan, will maintain control of it so it doesn't pass on to your kids, and you're the one that dictates it. Next is there's a very small impact on your financial aid eligibility. So some people think, well, if I got all this money in there, is it going to take away my chances? It's going to account for 5.64% of your contribution to qualify for financial aid. So not a lot. Next, there's no income, age, or annual Contribution limits. Okay. So why is this important? Because like a Roth, they're going to limit you up to $6,000, and there's age cutoff, and there's annual contributions. In this, there's just a lump sum contribution. I think plans anywhere between $233,000 up to $500,000 is the limit on the total contribution. So more than enough to cover Number 6, it's easy, easy to set up and maintain. I just did it right online, took me 15 minutes per kid. And it was, it was very easy, simple tax reporting. They don't even send you a 1099 for it. Very, very easy to report. And then there's flexibility on plan options. What this means is you can choose a 529 plan. That is not of your state. And so you can, you can pick one in another state. So if you're in Hawaii, you can use the one in New York, or if you're, you're in California, you can do the Nevada one. And so you can pick the one that best suits you and gives you the options that you need to invest. Okay. Also, they— a lot of plans let you choose the types of mutual funds to invest in. So the one that I have for my kids, one of the reasons I like them is because they offer a ton of Vanguard mutual funds and ETFs. I love Vanguard. I have a brokerage account with them. I have my retirement account with them, and their funds are great because they're low cost and they're very good. So I just mixed up my kids. I diversified the different funds for each kid. I think I have like 3 or 4 different funds for Per kid, and it was easy to choose, very simple. And then lastly is that you can use some of these funds that pay up to $10,000 of student loan debt off. Very cool. The fund— this plan allows you to switch it to kids. So let's say you have a kid that you set up a fund for, but they don't end up going to college. Or they got a scholarship. Now you can take the funds from this and transfer it to another kid or to a grandkid or to a sibling, or you can use it yourself. So a lot of flexibility there. I'm going to answer a question and I'll open up for questions. If you have any quick questions here, well, you can type it in the chat box. But, um, one question would be like, well, Alan, what if I just have one kid and they don't end up going to college? What happens to all this money? Well, it's still yours. It's still in there. You'll be able to withdraw it. You can take it out, but it will be subject to penalty and taxes. So penalty of 10% and your whatever your tax rate is. So the money's still there. It's not going to take away anything from you. It's not going to get put back into the government. It's just going to be taxed if it's not used for a qualified expense, educational expense. Okay, so that's the benefits of a 529 college savings plan. And if you have any quick questions— okay. What if we save using the savings plan but our kid doesn't end up going? Okay, there you go. I answered that. And then, Jana, as a grandparent, can you start this on a grandkid? Yeah, that's so— so you as You can designate who you want this for. So great for grand— grandparents to be able to, uh, to use this. And so now there's some new rules that came out about this. And so, Sandra, you can use funds for this. And in 2017, I think they came out with an update to it that you can actually use money, I think up to $10,000 of the This fund to pay for K through 12 expenses. So it doesn't necessarily need to be used for college. And but again, needs to be used on a qualified expense. Can it be used for beauty and trade schools? I am pretty sure, but I would have to double-check that. Very good question, Megan. Okay. If I'm the owner manager of this plan, I pass away. Okay, so you just designate someone as a beneficiary and you can have multiple beneficiaries on this account. So for me, very simple. I just put my wife in there and then a second beneficiary, we can have the kids. So that's a good question. Very, very good question. Okay, I'm going to move on to— we've got a lot to cover. We're going to move on to a Roth IRA. Okay, now this is a good option, probably not as good for the educational piece, but here's what a Roth IRA is. Let me explain. Okay. It's an individual retirement account. That offers tax-free withdrawals. So Roth is you take after-tax dollars, so your paycheck that's been taxed, and you contribute, or you put it in, or invest in a Roth. And all the earnings— so you put it in some mutual funds and it grows and it doubles— those earnings are tax-free. They can grow tax-free. And then when the time is right, you can withdraw those earnings. Tax-free, and the, the time on that is 59 years and a half, and you have had to have that account for at least 5 years. Okay, but the benefit is also you can withdraw the contributions without any taxes or penalties. Okay. And this was established in 1997 by Senator William Roth. So that's how we got that. So that's a Roth. Let me go over the pros and cons. Okay. So pros and cons of a Roth. First, we'll start with the pros. Tax-free, tax-free growth. Okay. Penalty-free withdrawals. So if you withdraw money for educational purposes— tuition, books, room and board— you can withdraw it without the fee that— excuse me, the penalty, the 10% penalty, but it will still be taxed. Okay. You can use it for qualified educational expenses, like I said. Here's another pro: if, if your kids don't use it, no loss. It's, it's a, it's a, it's really, it's, it's really a retirement account. So it just keeps, it just stays in there and continues to grow. And with the Roth, there's typically more investment Opportunities, more options than a typical 529. Now the cons is that it can hurt your eligibility for financial aid. It will count on your parents' contribution on your FAFSA. There also is a contribution limit of $6,000 a year. You can only contribute up to $6,000 a year. If you are 50 years or older, I believe it's 50 years or older, you can Contribute $7,000 a year. Another con is you're— by using this, you're actually taking money away from your retirement plan. And lastly, there's income restrictions. So if you are a single tax filer making $137,000 or more a year, then you cannot qualify for a Roth. If you are married filing jointly making over $203,000 a year, you cannot qualify for a Roth. Okay, now I'm going to go into my last topic today because I want to spend the majority of my time here, which is real estate. And I've developed over the last 18 years of being in the financial education space, and I've done all these things, right? I have the— I have the 529, I have a lot of real estate, I've done scholarships and things. of that sort. I, I just don't qualify for a Roth, so I don't have one. But, um, I, I've combined for the real estate portion the, the teachings from 101 Financial with the real estate to fund college. It is like a home run, absolute home run. So here's what I'm going to suggest. So you're going to buy one house per kid, okay? Yep. And we're going to use the equity from the house to pay for college. Now the benefits of this is this option is the least amount of money that you have to pull out of your pocket to invest, okay, to get the, the number that you need to send your kid to college. It also provides you monthly cash flow. With the 529, you don't get income from this. The Roth, you don't get income from this. After your kids are done with college, You actually still own the asset. You still have the property. Okay, so it's still in your possession and there's tremendous tax benefits and you can get your tenant and use the 101 system to pay down the mortgage on it like really quick, super quick. So, um, here's an example. Let's say you have a 5-year-old kid. So my baby, my little baby girl, she's the cutest. Um, She's, she's going to be 5. So let's say that in 14 years, your 5-year-old projected cost— and I'm going to show you, I'm gonna give you a calculator at the end to use to project what tuition will be for your kids— but let's say it's $200,000, right? You saw in 18 years it's going to be $500,000 by CNBC, so I cut that under half. So let's say, say your kid goes to school, it's going to be $200,000. Well, Man, how hard is it going to be to invest up to $200,000? It's, it's going to be some work. And then if you have more than one kid, like, so in my case, 7 kids, to get $200,000 per each kid, that's $1.4 million. You have 4 kids, that's $800,000 to be able to invest. On top of that, you still have to have your retirement. Most people don't even have that in their retirement. So how in the world can we do this? With a Roth or with a, with a 529, it's, it's going to be okay. It's going to be partially helpful, but I think this is going to be the big daddy. So here's what we're going to do. We're going to buy one house today. Okay, I mean, not right now, but in your near future at $125,000. Why? Because I ran this calculation. Let's say that house value doubles, right? Value goes up. And it doubles in 14 years. So that's 5% a year is basically what we're calculating that it's going to increase. Okay, why is this important? Because it's going to help us to get to that $200,000 number. Here's what I mean. So now you have in 14 years, your kid is 18, 19 years old, they're going to go to school, you have a $250,000 home. Now I would suggest you pull a $200,000 equity loan or line at 80% LTV. So if you don't know what that means, it's loan-to-value. So the bank is not going to give you the $250,000 because your house is $250,000. They're going to give you 80% of that, right? And so now 80% of $250,000 is $200,000. So now you have that $200,000 for the cost of $25,000. You see what I mean? So the cost was $25,000 in down payment, which I know could be a hurdle right now. How do you get the $25,000? I'll mention a couple things in a little bit, but to put $25,000 down to buy an asset that's— so to buy that, basically that college education at $200,000, that's not a bad return. Okay, that's— that's the $25,000 is 20% of the down payment for the $125,000 house. Okay, so, so what you're going to do now is calculate in some of these bonuses. Okay, so, so, so now we got that $200,000. Okay. We can use it, and I would only pull out what you need from that when you need it to pay tuition. You don't pull the whole thing out and pay 4 years all at once. You pay only when you need to pay, so you're charged interest only on what you pull out. Okay, but remember what we have— when you pull money out, you still have renters in that property that are making the payment to cover the interest costs of what you are going to be charged when you pull money out. I hope that makes sense. If it doesn't, you, you should take some more of our classes now. Here's where this gets even better. Okay, I'm gonna calculate bonus number 1 in there, which is rent payments. So we— I just took a very general real estate move, which is you take 1% of the purchase price and that will be your rent payment. That's a general rule of thumb. So in this case, I'm going to assume the rent is going to be $1,250 a month and I'm not going to increase it, right? We're just going to say it's going to stay there for the next 14 years or 168 months. So if you look at this, after 14 years you would have collected $210,000 in rent payment. Now assuming we take 90% of that $210,000 to cover mortgages, taxes, insurance, HOAs, maintenance, management, whatever that is, even at 90% You were still left over with a profit of $61,000, which puts the $25,000 back in your pocket, and you have another $37,000 in slush fund for travel. Maybe, maybe school went up a little bit more, so there's that extra. That makes sense, gang? That, that, um, you see there. And so you, you fully get your investment back. Right, where in a Roth or, you know, 529, you're not really going to get that back. And it's— this is leveraged and there's just additional tax benefits. But here's bonus number 2, which is mortgage paydown. So here's why I say when you combine real estate with the 101 system and you use this to fund your kids' college education, it's a home run. And so our average student will pay down their mortgage, pay off their mortgage in 5 to 7 years. So, so imagine having a few of these houses and then being able to systematically pay it off. What this does is it increases your cash flow, right? Because you took— instead of 14 years, let's say you paid that house off in 7 years. So now that, that collected rent that stays in your pocket is going to go up significantly. So now instead of 90% of that rent going out, You're, you're keeping 50% and 40% is going to expenses. So now you're left with $100,000+ by the time they reach college. Okay, and that is the benefit of being savvy and having a plan. Okay, and this is, this is crucial. Okay, so let me take a couple questions here. And you can do that in the chat box. All right, Alan mentioned you, you did it online. I didn't know how to do this, so I went through my bank. Sounds like easy setup. Yeah, you go through your bank or you go right to the plan. I typically don't like to go to banks because they always take their cut, but you can. Allison, is this assuming you have the house paid off, or do you Do this? No, I mean, like I said, you're gonna, um, you're gonna account for that rent, like 90% of that rent or more going to, you know, even, even if, even if the rent was 100% gone, right? Even if it was 100% gone, you still have that asset, right? And it's, it's a great leveraging tool. Less US military or VA loans, zero down payment. Very good. Yep. Then you keep the $25,000 in your pocket and do it every 2 years, right? You can do that every 2 years. Calculation is with taxes taken out. I'm just doing general. I mean, I have like this, this could be like a 4-hour class. I'm just doing it in 15 minutes. So I'm just saying, um, 90% of your rent is going to be going to Cover taxes, insurance, mortgages, and all that. Okay, so I mean this this is genius, Brandon. Of course, this is genius. No one's teaching this stuff. No one is teaching this stuff. It is complex. That's probably why they don't teach it. That that's why I don't recommend you doing this. Expect you do the do the five twenty nine. That's easy. You you any monkey can do that. Without having education. Okay, it's simple. It's set it up monthly contributions every month, $50, $100, $200, just get it set up. But this kind of stuff here, this right here is advanced. And you need someone to guide you through this because if you don't do it right, it could backfire. Okay, it could, it could backfire and hurt you. Susan, where can you find these properties? So you want to find cash flowing properties. So we have a bunch of our students that are property in Indianapolis, Indiana. I just had some recent buys there. One of my other students, I think she's on today, her name's Kareem, she bought one in Orlando, Florida. And Memphis, Tennessee. Yeah. Dallas, Texas. There's a bunch of houses. I was on yesterday with, with a gentleman that has 40 properties in Texas, and he's buying these properties at 50, To $80,000. So there's a lot of opportunities. Yeah. Wealth Academy. So One-on-One Financial, we provide these opportunities. So for those of you that aren't familiar with One-on-One, we have advanced programs that helps our students to go buy properties in states that they may not be aware of, that you can find properties for $100,000 to $180,000 that actually cash flow. They, they, they make money. So, uh, Brandon, yeah, finding, uh, foreclosures, if you're good at that, do it. And I'm just saying acquiring a property in general, that $125,000 property was to get, uh, for my 5-year-old, $200,000. It, it, it might need to be $200,000 properties for you, or it might need to be a $50,000 or $80,000 property to get $100,000. and $50,000 in 10 years. It just really depends on, you know, what you're trying to accomplish. Okay, so, so again, I would say this is the best option, number 4, the real estate. Least amount of money out of your pocket, highest growth potential, right? I mean, if you think about this, if you had 4 kids and this was a true scenario, it's just $25,000 per Kids. So that's $100,000 you invested to get to your, your $800,000 in assets, okay, versus having to put away $400,000 to get to $800,000. You see what I'm saying? That's a huge difference. So, but I would say reach out. I'm sure all of you know somebody from 101 Financial. One of my certified instructors. They are all excellent and can help you with this. I, I highly recommend them. If you do need to get connected with one, I want to give you my email address, okay? So if you don't know one, my email is 101financial.com, alan@101financial.com, okay? Email me, let me know what city and state you're in. I'll connect you with an instructor to help you to do this part. Okay, uh, Alicia, taking out equity of life insurance, that's not bad. Not as much leverage. You don't get as much leverage as you do in real estate because you're not going to get the cash flow. So you can do it, but I, I like the real estate better. Now I just have a few more minutes, so I'm going to give you the calculator in a second, but I want to give you your homework assignment. Okay, so your homework assignment today, kids, adults, 4 things. Number 1, we're going to calculate, calculate the cost of your kids, your kids' cost of education. I'm gonna give you the calculator here in just a second. Number 2, I want you to research, so search your state for your state's 529 College savings plan and look at the details. Does it offer a tax break for state income? What are the investment options like? What are the restrictions? And then also include fees. Are the fees high to be able to set this up? And then ultimately, how simple is it for you to do? And then number 4, you should start doing this with kids in high school. You can do it with them younger, but they probably won't know. So my suggestion is Once your kids reach high school, 9th grade and above, start working with them on their dream schools and have them make a list of their 5 dream schools that they like to go to and your 5 target schools that they would like to do. And we did this with all of our kids. And I mean, you just never know what is going to happen, right? I, I went to BYU-Hawaii. And I got all those scholarships and all that, and that's where I wanted my kids. I was like, hey, my kids should go there. My dad went there, I went there, I met my wife there. Like, it's cheap, I understand that place, but who would have thought that my kids would go all over the place? That's why we need to plan ahead, right? My oldest kid is in college now, so I'm right in the middle of this, and, and he's at BYU. He just got for his second year, he got He applied for an academic scholarship and got full tuition for it. He might get an athletic scholarship next year as well. We'll see how that goes with coach. My second oldest son, who would have thought coming from Kahuku, Hawaii, that he's going to end up at New York University right in Manhattan? That school is $68,000 a year. At New York University, he did get a $45,000 a year scholarship, $200,000 over his 4 years, but that still puts us in a position of $30-something thousand a year that we got to come up with. And then my daughter, that's a junior, so in a year from now she's going to be going to college, and she just met with Harvard and Brown, 2 Ivy League schools, and then Penn State she's taking a visit to. So I mean, it's $70 grand. So my point in saying that is we don't know today if our kids are little where they're going to end up. I thought they were all going to be at BYU-Hawaii, my school, but they're going all over. So we need to plan today for the best-case scenario, right, and be strategic about this and have definitive plans for this. Otherwise, I mean, we, you know, we don't want to have to deny our kids to go to where they want to go to if it's a good fit because of money. That's what I'm saying is, is use these. And the cool thing is you can actually combine using a Roth and a 529 and real estate. That's kind of my plan is, um, for my younger 4 kids, my older kids, I have houses. You know, that I've done for them that are completely paid off that I can use. I can fund the Harvard, I can fund the NYU, no problem. And but for my younger kids, I'm doing a combination because they were younger and I started them. I think the 529 will grow and contribute to a portion of it, but I also have real estate to cover the rest. So you can take these 4 and use a Roth and a 529 or 529 and The real estate. And of course, the scholarships is number one, right? So we combine scholarships. So maybe they get a scholarship like my second son, you know, $200,000 scholarship to New York University. You know, that saves me a big chunk of money that I can keep in my real estate, if that makes sense. So you're kind of mix and matching the assets that you have to cover what you need. But the first thing is you got to calculate. So here's a calculator that I suggest you use. You can just Google this. It's Big Future College Cost Calculator. Big Future College Cost Calculator. And you can put in the college inflation rate in here, 4 years, 2 years, how much you're going to cover, and then years. So very simple calculator. To give you a rough estimate of what you would need per kid. And that sets your target right now. You set your target, you can plan accordingly. Okay. So, oh boy, I know we've covered a lot and I'm coming up on the hour and I have another Zoom right in 7 minutes. So just in closing, I'm going to open up for questions. Okay, so please, I'll go all the way to the end of the Zoom to answer any of your questions. But as you're typing in your questions, I, I just want to give you the update of what we are doing for the next lessons. Okay, so next week Wednesday, I'm doing a lesson on building your real estate empire. So how to start that empire by buying your— how to buy your first investment property. So this is good for any of you that have not invested, or even for those of you that do have investments. How do you How do you learn more and increase your probability of success? So, so next week Wednesday, again, I do this at 8 AM Hawaii on my Instagram. So follow me there, Alan_Akina. And some of you may want to listen to this twice, right? It doesn't hurt to— I mean, how many of you could use this lesson again, right? Like, you hear it because I covered so much so fast. I think it's beneficial to use it to be able to To hear it again. Now, um, and then I'll be back 9 AM Hawaii time, 12 noon Pacific, right on, uh, right on this Zoom. So, uh, for, for those of you that, um, have kids, please, you know, start to do something, even if it's a little bit, even if it's $25 and a 529. Or you're a grandparent. I see some grandparents. Grandma Rochelle, you know, she has grandkids, right? You can start small and set the example for your kids so then everybody can kind of contribute to this fund for your kids. Okay, then the next week— not this coming Wednesday, the following Wednesday— I'm doing one on building your stock market wealth. So I'm gonna teach you about using traditional IRAs, Roth IRAs, SEP IRAs to build your paper wealth. So this will kind of contribute to what I was talking about today with the Roth. I'm going to expand that a little bit more. And then the following week, I'm going to talk about protecting your family and your estate, how to protect everything you're building with using proper estate planning. So there's a lot to cover. Be sure to get signed up if you haven't done this. I'm sure most of you have, but if you haven't gone to 101financial.com/xyz to get on that list, the email list, I will be doing another private invitational-only class. Okay, that's going to be not on a Wednesday. It's going to be at some evening or morning on a private Zoom that we're going to invite you to. So if you're not on there, you're not going to know what that subject is and you're not going to know What time and what the Zoom link is going to be completely different. So make sure you're on that because I'm going to add a sixth lesson. I just couldn't cover it all in the time that we have, so I'm going to add a sixth lesson. So oneonefinancial.com/xyz. Now Aubrey, you can find the YouTube video. So lesson one will be posted probably next day or two, but I also have all the ABCs of money uploaded. So go to YouTube and search one one financial. And you'll see our YouTube channel, and there'll be ABCs of Money Now. And the next day or two, we'll have Lesson One, and then shortly after, we'll have this lesson posted on YouTube. Okay, let's see, Jenna. Did you say we use Roth for college and penalty? So yeah, if you use your Roth, when you withdraw, you only have the penalties on your earnings. It's gonna be no penalties, just taxes on the withdrawal. Withdrawals of your earnings, not the contributions that you made. Okay, and no penalties. So the 10% penalty. Let's see. Okay, honey, got one on one. Got 10 to think about sending to college. Got 10 kids. Wow, you need to listen to this again. All right, mahalo, mahalo. Greetings from London. Okay, hey Andre, good to have you from London. Sean, you're welcome. Let's see any questions. Okay, well, hey gang, I hope— was this helpful? Was this class helpful to you? You guys like it? If you liked it, man, gosh, I get excited. I can't believe the hour's gone. I tried to do this quick. I'm trying to give you right here everything I got here and fall like right into that computer, trying my best. I didn't cover everything that I like to, but I hope it at least got you thinking. I wanted to push you in the right direction and let you know that we're here to help and we're here to be a resource. And not only myself, but I have 1,100 incredible instructors that can help you. So reach out to them. They are amazing, amazing, amazing, amazing. So thank you all for being here, all of you on Zoom, all of you on Facebook. We are happy to be able to have you, and God bless you. And like I said, I got my email there. Reach out. You have my, my Instagram. You can always message me there. Look for helpful tips that I'll be coming out with. But again, I will see you next week. Next week, next week Wednesday at 8 p.m. Hawaii time or 9 excuse me 8 a.m. Hawaii time or 9 a.m. Hawaii time for you guys. Okay, so thank you guys. God bless you all. Have a great rest of your day and aloha everybody.