WEBVTT - Study Hall: How to Turn 8k to 325k For Your Child's Future 

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<v Speaker 1>Earners.

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<v Speaker 2>What's up. You ever walk into a small business and

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<v Speaker 2>This episode is brought to you by P and C Bank,

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<v Speaker 2>a lot of people think podcasts about work are boring,

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<v Speaker 3>A couple of days ago, I'll put on Twitter and

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<v Speaker 3>Instagram about how to get your child a lot of

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<v Speaker 3>money in their retirement. So what I said was you

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<v Speaker 3>could turn eight How to turn eight thousand dollars into

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<v Speaker 3>three hundred and twenty five thousand tax free for your child.

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<v Speaker 3>So here's the steps. So you open a RAWIRA for

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<v Speaker 3>your child. You put two thousand annually in between the

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<v Speaker 3>ages of fourteen and seventeen and let it sit until

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<v Speaker 3>they reach age sixty. Assuming an average of nine percent

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<v Speaker 3>a year, that will equal three hundred and twenty five

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<v Speaker 3>thousand dollars tax free at the end from your eight

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<v Speaker 3>thousand dollars investment, and that will be a three thousand,

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<v Speaker 3>nine hundred and sixty eight percent rate of return. So

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<v Speaker 3>let me explain this in a little bit more detail. So, okay,

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<v Speaker 3>and when a child starts to work, right of working age,

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<v Speaker 3>you can open up a retirement account for your child,

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<v Speaker 3>an IRA or raw iray. I used raw ira because

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<v Speaker 3>a raw fira is not tax when you take the

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<v Speaker 3>money out. Now, that's why I used age fourteen to

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<v Speaker 3>seventeen because in most states, fourteen is when you can

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<v Speaker 3>start working, and you know, seventeen is like kind of

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<v Speaker 3>when you kind of phase out out of high school

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<v Speaker 3>and now you're kind of going into the eighteen. You're

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<v Speaker 3>an adult at that point. So not technically my responsibility.

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<v Speaker 3>Just keep putting money into your account. So I did.

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<v Speaker 3>I did. If you put money in for four years, right,

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<v Speaker 3>two thousand dollars, which I think is a reasonable amount.

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<v Speaker 3>I didn't want to do something that was crazy, like

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<v Speaker 3>you know, and there's limits of how much money you

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<v Speaker 3>can put into an IRA anyway, right, And then so

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<v Speaker 3>how I got the nine percent a year was that's

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<v Speaker 3>the average for the S and P five hundred over

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<v Speaker 3>the last twenty years. So I think that that's a

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<v Speaker 3>very realistic expectation going forward. And that's like just SMP.

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<v Speaker 3>We're not even counting QQQ or you know, tech stocks,

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<v Speaker 3>which I've done obviously much much better than that, right,

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<v Speaker 3>and that would give the child three hundred and twenty

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<v Speaker 3>five thousand dollars. So one of these, you know, is

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<v Speaker 3>there's always criticism for everything because it's America. So some

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<v Speaker 3>people were like, well, damn, they got to wait until

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<v Speaker 3>they's sixty years old. The whole point of it is

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<v Speaker 3>that it's a retirement account, right, it's like trust almost

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<v Speaker 3>in a sense. And how many people would be mad

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<v Speaker 3>if they when the data they turned sixty, they had

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<v Speaker 3>three hundred and twenty five thousand dollars tax free, Like,

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<v Speaker 3>who would be mad about that?

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<v Speaker 4>Yep?

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<v Speaker 3>Right, and it only cost you eight thousand dollars, right,

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<v Speaker 3>So why would you not want to set your child

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<v Speaker 3>up not to say that this is the only money

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<v Speaker 3>that they're going to have, but it's something that you

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<v Speaker 3>can do for their future, right to help Then people

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<v Speaker 3>was like, well, inflation, three hundred and twenty five thousand

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<v Speaker 3>dollars is not even going to be worth anything. Okay,

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<v Speaker 3>well better than nothing. It's better than nothing. And as

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<v Speaker 3>I said, if you can do better than almost the

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<v Speaker 3>fourth thousand percent rate of return over that timeframe tax free,

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<v Speaker 3>which is actually a higher a higher rate of return

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<v Speaker 3>because you have the factor in taxes, there's no taxes

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<v Speaker 3>in it. I don't think that there's something that you

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<v Speaker 3>should just throw away, right, And if you think that

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<v Speaker 3>that's not enough money, then you could put in more money, right,

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<v Speaker 3>you could put up to six thousand thinks sixty to

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<v Speaker 3>an IRA. But this is just the IRA play. I mean,

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<v Speaker 3>you can do this with a non qualified account. Also,

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<v Speaker 3>you can do it with a money. You can put

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<v Speaker 3>one hundred thousand dollars a year if you if you

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<v Speaker 3>want to, if you are blessed to have that much money,

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<v Speaker 3>and you feel like, you know, three hundred and twenty

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<v Speaker 3>five thousand dollars tax free is not enough, well you

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<v Speaker 3>do the calculation and equal whatever you want to equal

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<v Speaker 3>a million. But the idea is that when you put

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<v Speaker 3>money in early, there's a thing called compounding interest that

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<v Speaker 3>works in your favor. And the longer that you can

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<v Speaker 3>go without actually having to access that money, the more

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<v Speaker 3>beneficiary will be in the long.

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<v Speaker 1>Run for the child.

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<v Speaker 3>So we talk about college savings a lot for children.

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<v Speaker 3>That's important, but we haven't really spoken a lot about

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<v Speaker 3>retirement savings for children. Like you could literally start and

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<v Speaker 3>plan your child's retirement now, or like I said, just

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<v Speaker 3>have an esteache for them so when they get to

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<v Speaker 3>a point where they are at retirement, they have another

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<v Speaker 3>source of money that can be added with. They they

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<v Speaker 3>might have three million dollars on their own, okay, now

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<v Speaker 3>is other three hundred thousand right now? They can use

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<v Speaker 3>this to buy a home in Ghana, right or they

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<v Speaker 3>can use this to give to their grandchildren. They could

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<v Speaker 3>do a variety of other things. Like nobody's ever going

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<v Speaker 3>to turn down extra money. So that was something that

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<v Speaker 3>you know, once again going back to my financial advising days,

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<v Speaker 3>you know, I set iras up for people and then

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<v Speaker 3>I also set iras up for people's children sometimes. And

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<v Speaker 3>another benefit for the entrepreneur is that you can actually

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<v Speaker 3>start this type of program earlier than fourteen because as

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<v Speaker 3>long as your child is working and actually doing a

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<v Speaker 3>real job, so they could be nine years old, they

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<v Speaker 3>could be ten years old, and the money so now

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<v Speaker 3>you can put money aside and you can take it

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<v Speaker 3>from the salary that you're paying them. You can pay

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<v Speaker 3>your child up to like twelve thousand semi dollars a

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<v Speaker 3>year as an entrepreneur and get a tax right off

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<v Speaker 3>for that money that you're paying them. Right, So now

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<v Speaker 3>you can do the same play where you can actually

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<v Speaker 3>like let's say you're paying them two thousand dollars a year,

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<v Speaker 3>right and then the money that you're paying goes into

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<v Speaker 3>a retirement account, So now you're getting a tax deduction

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<v Speaker 3>and you're also being able to save for your child's

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<v Speaker 3>retirement as well. So that's a caveat in it for entrepreneurs.

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<v Speaker 3>But even if you're not an entrepreneur and you just

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<v Speaker 3>work a regular nine to five job, you're still able

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<v Speaker 3>to put money away on a tax deferred basis that

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<v Speaker 3>will grow and your child can access it later or

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<v Speaker 3>in life tax free.

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<v Speaker 1>For the long term. I think the biggest lesson in

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<v Speaker 1>the last four years just the longer you can invest

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<v Speaker 1>and plan in terms of succession for the family, the better.

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<v Speaker 1>So I know people may have some pushback for it,

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<v Speaker 1>but like you said, who want Who wouldn't want an

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<v Speaker 1>extra three hundred thousand or four hundred thousand upon retirement,

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<v Speaker 1>and with the rate of inflation, you're you're going to

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<v Speaker 1>need it.

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<v Speaker 2>Trust me, even with the regular face like what does

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<v Speaker 2>that turn into? Like let's say it's two seventy five, right.

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<v Speaker 1>Like you still it was worth it.

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<v Speaker 2>It's still a great nest egg. And a lot of times,

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<v Speaker 2>especially in our communities, when we approach retirement, right, yes,

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<v Speaker 2>for your kids, but you're also taking care of the

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<v Speaker 2>generation ahead of you a lot of times, right, and

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<v Speaker 2>so you have an additional responsibility to not only take

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<v Speaker 2>care of your family, but you know your parents or

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<v Speaker 2>you know sometimes if you have aunts that took care

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<v Speaker 2>of you, were responsible for you. Now you're taking care

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<v Speaker 2>of them. So where are you getting that money from?

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<v Speaker 2>So it's always it's always always recommended to always plan

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<v Speaker 2>for the future. Please plant for the future, plant for

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<v Speaker 2>because you don't know.

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<v Speaker 4>An illegal alien from Guatemala charged with raping a child

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<v Speaker 4>in Massachusetts. An MS thirteen gang member from Al Salvador

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<v Speaker 4>accused of murdering a Texas man of Venezuelan charged with

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<v Speaker 4>filming and selling child pornography in Michigan. These are just

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<v Speaker 4>some of the heinous migrant criminals caught because of President

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<v Speaker 4>Donald J. Trump's leadership. I'm Christy nom the United States

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<v Speaker 4>Secretary of Homeland Security. Under President Trump, attempted illegal border

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<v Speaker 4>crossings are at the lowest levels ever recorded, and over

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<v Speaker 4>one hundred thousand illegal aliens have been arrested. If you

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<v Speaker 4>are here illegally, your next you will be fined nearly

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<v Speaker 4>one thousand dollars a day, imprisoned, and deported. You will

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<v Speaker 4>never return. But if you register using our CBP home

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<v Speaker 4>app and leave now, you could be allowed to return legally.

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<v Speaker 4>Do what's right. Leave now. Under President Trump, America's laws,

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<v Speaker 4>border and families will be protected. Sponsored by the United

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<v Speaker 4>States Department of Homeland Security.