Setting Your Kids For Financial Success! Part 1
Sep 13, 2019
We all love our children and we want to give them the best. However, sometimes we forget about their future. Sometimes we think that they are too young or it is too early to set them up for success.
Today, I am going to show you the smart way to help your kids not to worry about money ever.
The Reality of College
A lot of times we think about saving up to college and we hope that once they graduate, they'll find a good job and that they can take care of themselves and maybe even you from them on.
But what about if even before they go to college they are already financially set? What about if we can think beyond college for them? They don't have to worry about getting into Student Loan Debt, or where are they going to find the money to buy their first home, or to get married, start a business, or even to care for their own children.
There is a way, and it might not be what you are thinking about.
What about if you can help your kids not to worry about money?
The formula is very simple... Through a Life Insurance Retirement Plan.
I know you might be thinking, but "they are too young to worry about retirement!" All I need is something for college, therefore a 529 plan is just what I need."
What would you do if any of your kids don't want to go to college? Do you know that you will get penalized if you use that money for something other than college?
What is there is a tax free option, that allows you to use the money for anything you want?
Life Insurance Retirement Plan or LIRP is a better solution for your kids
For instance, if you contribute towards this LIRP the amount a cup of coffee will cost you, or maybe the first hour of your job, and let's say that you work Monday to Friday, that is 20 days, about $5 a day, equals $100 a month (assuming a 20 day work month).
By the time your son or grandson is 17, he could have on average accumulated over $20,000. This is without counting the growth on that money. Asumming an average of 8% growth, your kid would have around $40,000 available for college. And it will keep compounding too.
The best part is that he can take money out of the account TAX FREE (on most occassions, and if it is set the right way), and no penalties and you can use it for college. Another benefit, is that because is life insurance, you don't have to declare it in the FAFSA, like you have to declared your 529 plan, UTMA, UGMA, Money Markets, CDs, Stocks, Bonds, Real Estate other than your house.
But if he/she decides to start a business or buy a home or do something else, he/she can too.
The money is going to keep increasing without fearing a huge lost in the market as this types of accounts have a cap or a floor. If the market goes up, the account will grow up the cap, but if the market crashes, as it always does between 8 to 10 years, there will be not money loss because there is a floor.
What could be some of the downsides of these accounts?
The downside is pretty minimum, and they are low risk.
Well, these are savings accounts with life insurance attached to it. If you exhaust the money and do not leave at least a dollar in it, you will bankrupt the account and you will have to pay taxes. But if you manage the money intentionally and conciously you should not run into this problem. During the past 20 years, these accounts have proven to grow!!
The other downside is the Cost of Insurance. But because you get these account for your kid at a low age, the long term cost is going to be so minimum that compared to retirement accounts like 401k, 403b, IRA and Roth IRAs, statistics, you will pay way less than you would have had to pay in Management Fees inside these accounts.
Do you want to set up your kid for success? Do you want your kid to be set for life?
Then, consider a cash value life insurance like an Index Universal Life (IUL).
This is the best way to set up your kids for success and above all to leave a legacy.
No matter what it is, make sure to start saving for your kids early. What do you think?
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