WEBVTT - Smartest Financial Moves Every Parent Should Make to Secure Their Kid’s Future

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<v Speaker 1>Earners. What's up.

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<v Speaker 1>A big thing is people that want to plan for

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<v Speaker 1>their kids.

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<v Speaker 3>Yeah, whether it's college savings, whether it's when they want

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<v Speaker 3>to they put life insurance on their kids. You know,

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<v Speaker 3>there's there's a variety of different ways that people can

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<v Speaker 3>save money for their kids.

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<v Speaker 1>Right.

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<v Speaker 3>So somebody's coming to your office and they just got

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<v Speaker 3>married and they have a baby on the way, right,

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<v Speaker 3>talk talk through the process that you would educate them

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<v Speaker 3>as far as the different ways that they can actually

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<v Speaker 3>set their children up.

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<v Speaker 4>I mean, like you said, there's a lot of ways,

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<v Speaker 4>because there'll be just a newborn baby, right, Well, probably

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<v Speaker 4>wouldn't start entertaining the conversation of putting them on payroll, right.

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<v Speaker 5>Yeah, talk about more. I'll come on the back end

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<v Speaker 5>and talk about that partuct that might.

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<v Speaker 1>Be an audit audit red flag.

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<v Speaker 4>Yeah, but I think one of the ways that you

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<v Speaker 4>can always obviously set up a custodial accounts in the beginning.

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<v Speaker 1>What that means is right, it's kind of joint ownership.

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<v Speaker 4>You can control it intil the kid reaches a certain age,

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<v Speaker 4>and so deciding what do you want to do for

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<v Speaker 4>the kids.

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<v Speaker 1>So do you want the kid to go to college? Right?

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<v Speaker 4>Do you want to say able to buy their first

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<v Speaker 4>property at a certain age. I like to start with

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<v Speaker 4>the end in mind, with the target, and then from

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<v Speaker 4>there we can figure out the best investment vehicles are

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<v Speaker 4>the best options. One of the things would definitely be

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<v Speaker 4>opening up a custodial broker's account. Another thing would be

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<v Speaker 4>also getting a life insurance policy on them as well,

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<v Speaker 4>because insurance is based off agent health and when you

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<v Speaker 4>do design it the right way, there are ways where

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<v Speaker 4>you can have something called high early cash value, or

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<v Speaker 4>you can have ten pays or twenty pays and while

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<v Speaker 4>your commissioned as an agent. If you get compensated that way,

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<v Speaker 4>it goes down. That is the best thing for the client. Right,

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<v Speaker 4>Those are two fundamental things that I would do because

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<v Speaker 4>I mean at that age, right, being able to get

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<v Speaker 4>a policy and getting a custodial account.

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<v Speaker 1>And people don't realize the number one.

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<v Speaker 4>Thing in investing that you have you have it to

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<v Speaker 4>your advantage is time. Right, So being able to get

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<v Speaker 4>that started, you know, literally from day one, is a

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<v Speaker 4>super advantage for sure.

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<v Speaker 1>About five twenty nine, I'm not against five twenty nine.

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<v Speaker 1>I mean there's some tax benefits from it, but they

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<v Speaker 1>just became sexy again.

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<v Speaker 5>Yeah, they did because you can convert them to now.

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<v Speaker 4>Yeah, so I'm not against I think five twenty nine

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<v Speaker 4>are great vehicles. I just like to optimize for flexibility.

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<v Speaker 4>I think that we just live in a very different environment.

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<v Speaker 4>I think when I was in school, when I was

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<v Speaker 4>in college, and that you hear things like, oh, that's

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<v Speaker 4>not a professional, that's not a career, and people might

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<v Speaker 4>not be going to college in the same way that

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<v Speaker 4>they are now with the advent of certain technology.

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<v Speaker 1>But I'm not against them. I think they could be

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<v Speaker 1>you could turn.

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<v Speaker 2>To it yeah, so just because I want to just

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<v Speaker 2>consto it before you jump outmah agmah preferential, or because

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<v Speaker 2>like you said, you're thinking of the end in mind,

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<v Speaker 2>and there's different levels of control you can have right

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<v Speaker 2>at eighteen, Yeah, controls over.

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<v Speaker 1>So what's your think?

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<v Speaker 4>I think if you're passing down the methodology, right, that's

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<v Speaker 4>that's that's a big We didn't talk a lot about it, right,

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<v Speaker 4>but like a big part of all of this is

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<v Speaker 4>as you're doing, as you're setting this stuff up, like

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<v Speaker 4>you don't want to just do what you do, what

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<v Speaker 4>you're you didn't have for your kids. You want to

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<v Speaker 4>educate them so they have the methodology and the mindset

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<v Speaker 4>on why you did it right. And so for me,

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<v Speaker 4>I think, even though you're giving up control at eighteen,

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<v Speaker 4>if you did what you were supposed to do in

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<v Speaker 4>terms of like advising them at every step, especially once

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<v Speaker 4>you were able to put them on payroll, Hey, this

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<v Speaker 4>is why we're doing it.

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<v Speaker 1>This is what we're going to use the money for.

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<v Speaker 1>I could have just given you the money.

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<v Speaker 4>But the reason why we're putting you on payrohch I'll

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<v Speaker 4>let you expound upon reason why we're putting you on

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<v Speaker 4>payrolls because this is what it means for our business.

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<v Speaker 4>And this is tax tax free income to you. And

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<v Speaker 4>now we can invest into the rock Diray and now

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<v Speaker 4>to stick your thunder.

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<v Speaker 1>But you leave something on the both for me, bro,

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<v Speaker 1>So I think it's for me.

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<v Speaker 4>It's about the education, right, I mean, control is control

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<v Speaker 4>is great, but at the end of the day, like

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<v Speaker 4>I was mentioned, I was talking to this lady on

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<v Speaker 4>the plane who has adult children, and she was just like,

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<v Speaker 4>your kids are gonna be your kid. You can only

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<v Speaker 4>do so much, so much right in my opinion, You know,

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<v Speaker 4>when the first eighteen years of life, if you did

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<v Speaker 4>what you were supposed to do, they're gonna take what

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<v Speaker 4>they're supposed to take and they gonna do what they

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<v Speaker 4>want to do. So I'm personally I don't need control,

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<v Speaker 4>at least me personally beyond.

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<v Speaker 1>The age of eighteen.

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<v Speaker 5>Yeah, And one of my favorite strategies that I don't

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<v Speaker 5>think enough people utilize is hiring their kids into their business.

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<v Speaker 5>What most people do is they make money, they pay

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<v Speaker 5>taxes on that money, and then they pay their kids,

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<v Speaker 5>which is okay, it's a good start, but I think

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<v Speaker 5>it's a better way to do it. You make money first,

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<v Speaker 5>then you hire your kids into your business. And when

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<v Speaker 5>you do this, you're able to pay each of your

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<v Speaker 5>kid I'm sure I'll have to hurt this before up

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<v Speaker 5>to fourteen thousand, six hundred dollars each per child, and

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<v Speaker 5>your business receives the fourteen thousand dollars tax deduction as

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<v Speaker 5>if you pay anybody else. And your kids can receive

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<v Speaker 5>this fourteen thousand, six hundred dollars tax free because the

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<v Speaker 5>standard deduction wipes out their income. They don't have to

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<v Speaker 5>file a tax return. You don't have to send number to

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<v Speaker 5>TA ninety nine, you have to send in W two.

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<v Speaker 5>None of that. They get that fourteen thousand dollars tax free.

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<v Speaker 5>And then if I were you, they don't, I would

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<v Speaker 5>take seven thousand of that fourteen thousand and put it

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<v Speaker 5>into a roth Ira for them because they probably need

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<v Speaker 5>all the money right now. And if you do this

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<v Speaker 5>from when your kids of age, I recommend, don't you

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<v Speaker 5>know you can start hiring your kids and your business

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<v Speaker 5>at their eighty seven because that's when they can actually

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<v Speaker 5>do work, you know, answer the phones, clean up the

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<v Speaker 5>office stuff like that. If you do this from when

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<v Speaker 5>your kids at age seven to when your kids at

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<v Speaker 5>age seventeen. That's the cut off or hiring your kids

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<v Speaker 5>into your business. They will have about one hundred and

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<v Speaker 5>thirty one hundred and forty thousand dollars of tax free

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<v Speaker 5>money in their wroth.

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<v Speaker 1>Ira.

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<v Speaker 5>Not to mention you, they've been learning from you as

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<v Speaker 5>a boss for the last ten years. So not only

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<v Speaker 5>are you teaching them, are you paying them for the work,

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<v Speaker 5>but you're teaching them entrepren neural skills at the same time.

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<v Speaker 5>So I think this is a great way to save

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<v Speaker 5>money or taxes of your business, pass down tax free

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<v Speaker 5>wealth to your kids and help them get a head

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<v Speaker 5>start on entrepreneurship at the same time. And I think

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<v Speaker 5>that more people should take advantage of, you know, hiring

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<v Speaker 5>their kids and their business and giving them the ropes

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<v Speaker 5>the supervaluble.

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<v Speaker 2>At seventeen, they're probably going to make the biggest financial

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<v Speaker 2>decision other than buying the house, which is am I

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<v Speaker 2>going to school?

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<v Speaker 1>Yeah?

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<v Speaker 5>And now you get your own money to make that decision.

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<v Speaker 5>True now because you can go to school on my

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<v Speaker 5>time for one hundred thousand but no, no, you got

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<v Speaker 5>one hundred and twenty thousand dollars. You can use that

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<v Speaker 5>for college or what I'll plan to do for my kids.

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<v Speaker 5>I would say like this, this is the c capital

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<v Speaker 5>you need for your business. We don't need to go

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<v Speaker 5>find outside funding or find investors. You have one hundred

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<v Speaker 5>thousand dollars to put towards that business idea. I'll be

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<v Speaker 5>the CFO of the company. I'll help you to puy

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<v Speaker 5>the money into your business. But I want my kids

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<v Speaker 5>to have options on what they want to do. Instead,

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<v Speaker 5>happened to take the traditional route.

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<v Speaker 1>So what's the conversion that you can find twenty nine

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<v Speaker 1>to a row?

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<v Speaker 5>Oh yeah, so with the five to twenty nine plan,

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<v Speaker 5>the problem that I used to have with it is

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<v Speaker 5>that that money needs to be used for college or

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<v Speaker 5>you or you have to pay taxes on the earnings

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<v Speaker 5>from that money. And let's face it, you know, eighteen

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<v Speaker 5>years from now, like college might be less of a

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<v Speaker 5>thing than it already is today.

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<v Speaker 1>And so if they.

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<v Speaker 5>Don't want to go to college, then you have to

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<v Speaker 5>now pay taxes on that money. But the rule is

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<v Speaker 5>today you can convert I believe us up to thirty

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<v Speaker 5>six thousand dollars of five twenty nine money into a

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<v Speaker 5>wroth ira and not have to pay any taxes on there.

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<v Speaker 5>So like if your kids at eighteen say, hey, I

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<v Speaker 5>don't want to go to college, you can convert that

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<v Speaker 5>money to a wroth Ira and they can continue to

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<v Speaker 5>grow tax free, which is a huge flexibility option for

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<v Speaker 5>kids now. So now five twenty nine, planers like, hey,

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<v Speaker 5>if you don't want to go if you don't want

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<v Speaker 5>to go to college, I can either change the name

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<v Speaker 5>to another child, or I can convert it to a

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<v Speaker 5>wroth Ira and they could continue growing tax free forever,

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<v Speaker 5>which is pretty big.

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<v Speaker 1>Yeah.

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<v Speaker 2>And so this is I mean amazing information. One of

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<v Speaker 2>the things that people always ask us about is asset allocation, right,

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<v Speaker 2>and so in order to do these things, to have

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<v Speaker 2>these strategies, they have to know how to spend, how

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<v Speaker 2>to say where they put. So what is the recommended percentages?

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<v Speaker 2>I guess case the case, but just an overarching theme

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<v Speaker 2>of what asset allocation will look like.

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<v Speaker 4>Yeah, even just even just even cash flow personal finance

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<v Speaker 4>every Yeah, So I mean, just to your point, depend

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<v Speaker 4>on how much money you make, do think you need

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<v Speaker 4>to be paying yourself fifty percent of that for like

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<v Speaker 4>for general expenses. But the average person, I would say,

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<v Speaker 4>let's keep your necessities right, You're you're housing your cars,

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<v Speaker 4>all that stuff, builds utilities, but ideally around fifty but

0:09:30.679 --> 0:09:33.080
<v Speaker 4>no more than sixty percent, right, Like between that fifty

0:09:33.080 --> 0:09:37.240
<v Speaker 4>to sixty percent range is pretty decent. Then fifteen to

0:09:37.280 --> 0:09:40.120
<v Speaker 4>twenty percent of your money for like you you know

0:09:40.160 --> 0:09:44.120
<v Speaker 4>you you're you're once right, being able to travel, dining out,

0:09:44.280 --> 0:09:46.960
<v Speaker 4>entertainment like those things that could be very variable, right,

0:09:47.360 --> 0:09:50.800
<v Speaker 4>And then another fifteen to twenty percent for allocated for investing.

0:09:50.840 --> 0:09:54.040
<v Speaker 4>Now as your income increases, right, we want those percentages

0:09:54.080 --> 0:09:54.560
<v Speaker 4>to flip.

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<v Speaker 1>Right.

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<v Speaker 4>So for example, like you know, they said the average

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<v Speaker 4>retirement age is sixty five, but when you really the math,

0:10:00.320 --> 0:10:02.160
<v Speaker 4>the reason why the average retirement age of sixty five

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<v Speaker 4>is because the average person makes fifty thousand dollars in the

0:10:04.559 --> 0:10:06.920
<v Speaker 4>United States, right, meaning they did everything right, they can

0:10:06.960 --> 0:10:10.080
<v Speaker 4>maybe allocate ten percent towards investing in saving, which means

0:10:10.160 --> 0:10:12.160
<v Speaker 4>that's gonna take them thirty plus years accumulate a million

0:10:12.160 --> 0:10:14.880
<v Speaker 4>dollar nest egg. But if you make one hundred thousand dollars,

0:10:14.920 --> 0:10:16.640
<v Speaker 4>you've doubled your income. And if you just doubled your

0:10:16.640 --> 0:10:18.840
<v Speaker 4>savings rate from ten percent to twenty percent, now you

0:10:18.840 --> 0:10:20.560
<v Speaker 4>can put away four times more money.

0:10:20.840 --> 0:10:21.840
<v Speaker 1>Right, So I think one of the.

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<v Speaker 4>Keys is as your income increases, strategically increasing your savings rate.

0:10:26.640 --> 0:10:29.959
<v Speaker 4>Because here's the thing, even if your lifestyle does increase

0:10:30.000 --> 0:10:32.079
<v Speaker 4>as you make more money, as long as you've increase

0:10:32.160 --> 0:10:35.599
<v Speaker 4>your savings rate, you're always guaranteeing and banking banking in

0:10:35.679 --> 0:10:37.679
<v Speaker 4>the fact that I'm now going to increase my investing

0:10:37.679 --> 0:10:40.240
<v Speaker 4>as well. But to start out, I think those are

0:10:40.240 --> 0:10:43.400
<v Speaker 4>great percentages. But as your income increases, I think you know,

0:10:43.520 --> 0:10:46.199
<v Speaker 4>of anything above six figures, I would try to get that.

0:10:46.520 --> 0:10:48.280
<v Speaker 4>I would try to get those necessities down to like

0:10:48.640 --> 0:10:51.760
<v Speaker 4>closer to fifty percent, maybe even less, and then continue

0:10:51.800 --> 0:10:54.360
<v Speaker 4>to increase the saving and investing allocation so that you

0:10:54.360 --> 0:10:56.800
<v Speaker 4>can just get to your target faster. Because retirement has

0:10:56.800 --> 0:10:58.199
<v Speaker 4>nothing to do with age. It has everything to do

0:10:58.280 --> 0:11:00.599
<v Speaker 4>with assets. It's a number. You don't have to be

0:11:00.679 --> 0:11:03.000
<v Speaker 4>sixty five, right, It's like, oh, I got a target,

0:11:03.679 --> 0:11:05.480
<v Speaker 4>now this is the number. How can I get there

0:11:05.520 --> 0:11:07.840
<v Speaker 4>as fast as possible? You get there as fast as

0:11:07.880 --> 0:11:09.880
<v Speaker 4>possible while being a good steward over your finances.

0:11:10.320 --> 0:11:12.520
<v Speaker 5>How do we get tricked into thinking that sixty five

0:11:12.679 --> 0:11:15.040
<v Speaker 5>is like now I want to do whatever I want

0:11:15.040 --> 0:11:16.920
<v Speaker 5>to do in life, like you know, like my knees

0:11:16.920 --> 0:11:19.320
<v Speaker 5>barely work like like, So we always tell our clients, like,

0:11:19.559 --> 0:11:20.720
<v Speaker 5>retirement is not an age.

0:11:20.760 --> 0:11:21.480
<v Speaker 1>It is a number.

0:11:21.520 --> 0:11:24.240
<v Speaker 5>The faster we get you there, the faster you can

0:11:24.320 --> 0:11:27.080
<v Speaker 5>like do whatever you want. So it's about more, you know,

0:11:27.200 --> 0:11:30.680
<v Speaker 5>financial freedom than it is about retirement, because it's just like,

0:11:30.760 --> 0:11:33.400
<v Speaker 5>how when at what point do I have enough money

0:11:33.440 --> 0:11:36.400
<v Speaker 5>when my investments can pay me out to live my lifestyle.

0:11:36.440 --> 0:11:37.760
<v Speaker 5>And at that number, if you want to stop working,

0:11:37.800 --> 0:11:40.360
<v Speaker 5>stop working. But I just think that we as a people,

0:11:40.400 --> 0:11:41.800
<v Speaker 5>as a coach, you need to get away from that

0:11:42.240 --> 0:11:44.120
<v Speaker 5>sixty five and now I can live my life. Life

0:11:44.160 --> 0:11:46.160
<v Speaker 5>is meant to You're meant to do more than that.

0:11:46.280 --> 0:11:49.920
<v Speaker 6>An illegal alien from Guatemala charged with raping a child

0:11:49.960 --> 0:11:53.760
<v Speaker 6>in Massachusetts. An MS thirteen gang member from El Salvador

0:11:54.000 --> 0:11:58.120
<v Speaker 6>accused of murdering a Texas man. A Venezuelan charged with

0:11:58.200 --> 0:12:02.080
<v Speaker 6>filming and selling child pronoc in Michigan. These are just

0:12:02.200 --> 0:12:05.959
<v Speaker 6>some of the heinous migrant criminals caught because of President

0:12:06.000 --> 0:12:09.520
<v Speaker 6>Donald J. Trump's leadership. I'm Christy Noman, the United States

0:12:09.600 --> 0:12:14.400
<v Speaker 6>Secretary of Homeland Security. Under President Trump, Attempted illegal border

0:12:14.400 --> 0:12:17.960
<v Speaker 6>crossings are at the lowest levels ever recorded and over

0:12:18.040 --> 0:12:21.240
<v Speaker 6>one hundred thousand illegal aliens have been arrested. If you

0:12:21.320 --> 0:12:25.160
<v Speaker 6>are here illegally, your next you will be fined nearly

0:12:25.240 --> 0:12:29.280
<v Speaker 6>one thousand dollars a day, imprisoned, and deported. You will

0:12:29.320 --> 0:12:32.960
<v Speaker 6>never return. But if you register using our CBP home

0:12:33.000 --> 0:12:36.360
<v Speaker 6>app and leave now, you could be allowed to return legally.

0:12:36.760 --> 0:12:41.520
<v Speaker 6>Do what's right. Leave now. Under President Trump America's laws,

0:12:41.679 --> 0:12:44.120
<v Speaker 6>border and families will be protected.

0:12:44.200 --> 0:12:46.320
<v Speaker 1>Sponsored by the United States Department of Homeland Security,