While perusing through financial articles related to the “529 Plan” – it brought back so much memory of the relationship with my parents and the experience in relationship with my own child.
Having evolved from a child to become the father of another child – gave way to a deeper understanding of the power and the limitation of love.
The fact that my wife and I have successfully bucked abject poverty (An Early Retirement Master Plan FIRE for Any One at Any Age) and designed a Life Framework that is completely different than our parents – we failed our child with, ironically, LOVE!
As soon as the birthing nurse handed my daughter to hold in my chest for the first time – everything things that were unconsciously unfulfilled in my childhood experience began to take shape for my child.
Which college she will attend?
What will be her major?
Who will be her mate?
Where will she live?
How will she manage her money?
How will she manage her health?
The list is endless – resulted from the empty list of my own upbringing.
First, I am going to review the article and generalize the touching subject of – my baby is beautiful!
Financially, unless you are above the 90 percent tier of wealth, the 529 plan is not most optimal strategy to save for your child college education.
Fact – the majority of the population will not graduate from have a 4 years college degree.
As of the beginning of the years 2020 and in the United States, there is less than 33% of Americans attended and graduated with a four-year degree – in comparison to the year of 1940, percentage was 4.6%.
The rise in the number of Americans graduated from college is primarily resulted from the technical advancement and the internal survival of the fittest drive within each individual – not from the rise of the personal accumulated wealth of the individual’s parents.
As a first generation of immigration, I can firmly attest that parent’s wealth has very little correlation with my status as college graduated (An Early Retirement Master Plan FIRE for Any One at Any Age).
Fact – human beings are by nature are social animals.
With the exception of the less than 1% of the geniuses in the population and the remaining 9% of the financially successful citizens, the remaining 90% are preferred to be part of the crowd (The Hierarchy of 90 Percents Vs 10 Percents) – the majority of the population is happier in a social average circumstance.
For many parents who are graduated from college, it is unimaginable for them to think that their own children may want to build their own lives without a college degree.
Anywhere in the world, especially here in America, when there is enough individual freedom for each of the citizen to choose a life in accordance to his/her freewill – most will lead a happy life with few regrets.
Animals are instinctively the best of parents. As human beings, be able to give your children the total freedom to choose a life with or without college is in lined with true love.
Hence as parents, if you are among the 90Percenters, the 529 plan is not the best strategy to help your children with higher education.
Max out all the available pre-tax savings, 401(k), 403(b), traditional IRA, Roth, HSA and after-tax savings bank CDs, index funds – all these may not give the maximum tax efficiency with regard to college, but it give so much more flexibility in execution in support your children the freedom to choose their own path.
I would not recommend the 529 plan for low net worth readers (2 million or less).
Let’s move on to discuss the parental strategy in giving your child a chance to find his/her own geniuses.
We will split your parental responsibility into 2 time frames –
- Birth to puberty
- Puberty to 25
Birth to puberty – On the average, most children will hit puberty in 12 to 15 years of age.
Within this time frame, give your children lots of your time and allow them make decisions without any limitation – especially, money.
The best of humanity is revealed within the first 12 to 15 years of all children – given the proper external environment.
Many visionary ideas that elevated the world to the next tier of living were, are and will come into reality at this stage of human evolution – again, only if the proper external environment is fostered.
The only education you need to tell your kid from birth to puberty is – the sky is the limit!
Puberty to 25 – scientifically, we have determined that the majority of children’ frontal cortex is not fully developed until the age of 25 – many auto insurance underwriters incorporated this fact into their models.
Puberty is the moment in time that signals a biological transformation of a child into the young adult.
Once the puberty line is crossed, all the built-up potential resulted from genetics and early external upbringings will begin to take root in reality – regardless of right or wrong, good or bad, moral or immoral.
Unbeknown to most parents, they will have very little influence in the actual reality of their children – it is the world at large that will shape the lives of their children for the next 30 to 40 years.
Ironically, if the child is fortunate to have a set of very loving parents – there is a high probability, the love will result in the dwarfed growth toward a full-fledged human being.
This is the reason why animals are better parents than humans because the proper love is built into the unconsciousness of instinct.
To give your child a chance at discovering his/her own geniuses –
The condition love is critical for progress. Collectively, it is the combined progress from each and every new generation that drives the advancement of the modern world – it is all started from within each family and with it began with the progress of your child.
So here to all parents – let’s build a world of fill with geniuses with your children as the representatives of you in the coming future.
Let’s play the game of life!
