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Stock Thread (30 Viewers)
- Thread starter St. Louis Bob
- Start date
culdeus
Footballguy
I am curious how people here manage their kids college funds. I have separate trust accounts for each that I've put an inheritance and savings into. I've got one kid that will be drawing on that in about 6 years, and another in 8. They are funded well enough that there is a chance there is surplus funds for them to have to start their life. If they blow through this going to Pepperdine or something, well they can eat sand.
The asset mix for them I've for the most part matched mine. I'm starting to wonder if I should start just buying straight up bonds to maturity in those with like 5-10 year ladders or something. It would suck to have to fund these even more than I have already.
The trust taxes also changed a bit so now they can get 12k of income tax free and an additional 2400 in cap gains each. that makes things like taxable bond funds an option as well.
The asset mix for them I've for the most part matched mine. I'm starting to wonder if I should start just buying straight up bonds to maturity in those with like 5-10 year ladders or something. It would suck to have to fund these even more than I have already.
The trust taxes also changed a bit so now they can get 12k of income tax free and an additional 2400 in cap gains each. that makes things like taxable bond funds an option as well.
I live in TX as well, so the tax benefits of a 529 plan were of no consequence, but here is what I did:
-When eldest two were born, set up Coverdell accounts on each. I am a self-directed kinda guy, so I liked this option best, put funds in index funds.
-My parents moved to a state with high state income tax, so I had them set up 529 plans for each kid. I would stop funding the Coverdell accounts and instead send my parents a check and they would fund the 529 plans and thus realize a tax savings on their state income tax. Options were limited, but we took aggressive tracks on young kids, and scaled back to moderate tracks as kids aged. (they were kind of like target date funds for retirement with their own asset blends)
-My eldest started college 4 years ago, and she was awarded a pretty substantial scholarship. We changed her plan allotments to all cash as between the scholarship and what we had saved, she had ample money saved up to pay for all undergrad expenses. We told her that post bachelor expense was on her if she wanted to continue for a Masters.
-Her excess money was transferred to my younger kids. This allowed us to not fund directly either kids college fund, and gave her these funds instead. She bought a new car this past summer with that money.
-Middle child HAD enough money in accounts prior to the start of the fall semester as he just entered A&M to complete school. But, he was still heavily vested and well, stock market, oops. Fortunately it rebounded enough that we'll be moving more towards all cash - should be good to have all undergrad paid as state tuition/housing is not too bad.
Youngest should be good to go, save a stock market crash. Trickle down theory from scholarships and robust stock market gains while eldest two were growing up, thanks Obama. Pretty sure I got super lucky with my kids as these funds really did very well the past 15 years or so. Timing is everything.
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culdeus
Footballguy
I mean I've got both of them to the point where I could easily just go 100% bonds and they would be totally ok. I mean they won't be able to make it rain or anything, but they would be fine short of a 10 year med school followed by a 5 year travel the world sabbatical.
My only chief worry is they get hooked up with someone with a mountain of debt. I almost expect this as default right now. So in a sense my AA for them is somewhat focused on the eventuality of a debt laden liberal arts degree major.
That's why I went with the Crummey Trust option, again being in Texas it made little sense to do any of the other options and UTMA type accounts are a little too fast and loose for a kid that runs in the weeds. Crummey give you till age 30 to keep them under your thumb.
fantasycurse42
Footballguy Jr.
https://www.marketwatch.com/story/these-5-factors-could-stop-the-stock-markets-rally-cold-2019-01-10
Most of this stuff is pretty obvious, but the one thing I want to pull from here and elaborate thoughts a little:
I've spoken about debt maturity walls for a while, this year it gets its first jump, but over the following 3 years, it is a disaster brewing. All they're gonna do is keep piling it up, eventually it will come down and create a crisis.
For the long run, we'd be better off letting the bad debt collapse, not issuing more debt to feed bad debt - why is this so complicated? Most likely bc the financial CEOs don't want to jeopardize their 8-9 figure packages.
These maturity walls are going to keep growing and growing and growing until they collapse in a wildly spectacular fashion. Good thing the Fed will have the bullets, oh wait...
There is a Big Short type trade maybe 18-24, even 36 months out, my goal is to figure it out within the next 6 months.
I get it, I'm Dr. Doom . - I guess mountains of debt are worrisome to me.
Older one is up to over 50 shares.
I keep things simple.
Sucks that there aren't and won't be enough shares in his account for DRIP (and the broker doesn't have fractional shares) for a while. When their dividends add up, I buy an extra share for them. It's long term set/forget for me. Young one is 16 years out, older is 13 years out.
Most of this stuff is pretty obvious, but the one thing I want to pull from here and elaborate thoughts a little:
This is what pisses me off so much! Here is a ####### thought, pay the debt you took on. I guess I'm the lunatic, bc nobody gives a ####, just roll it over forever, what could go wrong?
I've spoken about debt maturity walls for a while, this year it gets its first jump, but over the following 3 years, it is a disaster brewing. All they're gonna do is keep piling it up, eventually it will come down and create a crisis.
For the long run, we'd be better off letting the bad debt collapse, not issuing more debt to feed bad debt - why is this so complicated? Most likely bc the financial CEOs don't want to jeopardize their 8-9 figure packages.
These maturity walls are going to keep growing and growing and growing until they collapse in a wildly spectacular fashion. Good thing the Fed will have the bullets, oh wait...
There is a Big Short type trade maybe 18-24, even 36 months out, my goal is to figure it out within the next 6 months.
I get it, I'm Dr. Doom . - I guess mountains of debt are worrisome to me.
I've bought each son 2 shares of SPY a quarter since birth. Set it and forget it for me, if they take a different path, money will be theirs, as long as they aren't dip####s.
Older one is up to over 50 shares.
I keep things simple.
Sucks that there aren't and won't be enough shares in his account for DRIP (and the broker doesn't have fractional shares) for a while. When their dividends add up, I buy an extra share for them. It's long term set/forget for me. Young one is 16 years out, older is 13 years out.
Shula-holic
Footballguy
I'm just starting to look at this for my daughters, now 8 and 4. I talked to my guy at Wells today and he was suggesting it. Said we could fund $15K per year per child, up to 5 years in advance. Says they are protected from creditors. From my reading, whatever they don't use we could change the beneficiary even back to myself it seemed like. The only downside is I get regular income treatment on the gains at that date rather than cap gains rate. Anyone know if this info correct?
My biggest hesitation has always been to make sure they are financially responsible because they should both be able to contend for and get scholarships. I wanted to make sure any excess or unused funds didn't just revert to them in case they weren't financially responsible. And honestly who is even at 22 or so? I know I wasn't. Then what if they get in a marriage that's bad, someone with debt, etc. I just prefer to have any left over revert back to me if that's possible.
culdeus
Footballguy
You can fund 15k per donor per child last year (it changes) for 30k for mom/dad. You can fund far more than that if you are so inclined, it just requires more paperwork and has estate tax implications.
If you setup a revocable trust those come with their own rules, and will for sure throw off your taxes if you revoke it, but I'd talk to a lawyer if you want to know more.
The reasons you described is why I went the crummey route. It gives you runway to 30, and if they haven't burned it all up by 30 I would consider it a bonus no matter what trainwreck they marry or whatever.
Shula-holic
Footballguy
So yours is basically set up as a trust? Interesting. I had considered setting up a trust for our daughters just in case something happened to my wife and me. I never feel good if we are on the same plane etc. I'd not thought about the straight up trust for education, moreso for a way of passing whatever I have left on to them. The goal to be protecting them for a set time from wasteful spending or getting hooked up in a bad marriage that ends in divorce and losing half of it or marrying someone with large debt as you posted. I may consider that so I keep more control over everything.
saintfool
Dead sexy
I set up a state managed 529 when he was born. He's almost 9 now and is a stone's throw away from the projected threshold for in-state, 4 yrs needs. I'll probably turn it over to a financial advisor friend once we get to that magic number. He's got a trust set up by the grandparents too. He's the only male heir on either side of the family and they're taking care of him. I was holding off on estate planning until after I got married again but that's out of the way now. I gotta get back on it.
Bob Sacamano
Footballguy
saintfool
Dead sexy
I liken it to Willy Wonka. He's got the golden ticket. Everyone in the families want him to succeed and help him along the way. They're overcompensating for the piss-poor job they did with me and his mom.
Bob Sacamano
Footballguy
529. I intend to tell her when she's ready to look at colleges that she has the amount I've saved + the following 4-5 years of annual contributions I've been making to budget however she sees fit.
If she wants/needs to spend more than I'm making available, that's on her.
If she gets scholarships, etc or manages it particularly well, then we'll split whatever is left when she's done and she can do with it as she pleases. If she manages to spend it wisely enough that there's something left to split, then I have no concerns about how she'll choose to blow what's left. She'll have earned the right to screw that up.
If she wants/needs to spend more than I'm making available, that's on her.
If she gets scholarships, etc or manages it particularly well, then we'll split whatever is left when she's done and she can do with it as she pleases. If she manages to spend it wisely enough that there's something left to split, then I have no concerns about how she'll choose to blow what's left. She'll have earned the right to screw that up.
The only way there's going to be anything substantial left when she's done is if she does the first 2 years at a community college or if the whole higher education model changes in the next 6 years. And unless it's wholly unreasonable, I'll probably end up covering whatever debt she takes on when she's done anyway.
cosjobs
Footballguy
cosjobs
Footballguy
Mine is in my/wife's ira. Can take out penalty free for children's education, and if not it goes towards retirement.
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psychobillies
Footballguy
Iron Throne indeed.cosjobs said:
Mario Kart
Footballguy
Selling out one of my oil stocks. RDS:A, won’t be in my portfolio after today. No real reason other than, hopefully, using that money elsewhere. Not sure where yet though. I’m holding BP for now. The money I will have I will either put into a Vanguard fund or maybe mix it between Vanguard and AAPL.
St. Louis Bob
Footballguy
Bob Sacamano
Footballguy
You misunderstand. You're being sued by people on Facebook for approving the sale of UUU.TO.
Sand
Footballguy
I have one 529 that I've been funding for a while - my kids are 6 years apart, so changing beneficiaries is workable. First kid looks to be going armed forces, so the second kid looks pretty good with a concentration in resources.
BTW, Pepperdine may be super pricey, but I've been to the lab next door and it may be one of the prettiest areas in the country for a college campus. (West Point is also in that league).
NREC34
Footballguy
Mario Kart
Footballguy
I'm mixing it up. I put in a couple of orders to add more into VWNFX and VDIGX. I will have an equal amount of money in them so now it will be interesting to see which outdoes which. Nothing major overall. With the remaining money, I could buy more AAPL or diversify and buy into MSFT. Both would be small positions, <$5,000. My initial response is to diversify but since I, smartly, put more into the funds previously mentioned, the other side of my mind says to have fun and put it into AAPL.
On the flip side, if I got rid of all my BP, I'd essentially be out of the oil stocks and move them into technology... by ways of switching BP into MSFT. Don't think I'll do that cause I'm just spitballing here, for now.
Just a quick check-in regarding CBLLF (or equivalent cobalt play.) Many of us, myself included, bought in the 9 range and recently it fell sub 3. I see a slight uptick in the past two weeks, actually a decent pop, so wondering if anything is new. Is the time and price right to buy?
Mario Kart
Footballguy
Buy before earnings come out? Wait till after?
Specifically AAPL and/or MSFT.
Specifically AAPL and/or MSFT.
Mario Kart
Footballguy
I’d like to wait and pick later but parts of me are itching to pick now. MSFT would be to diversify tech companies. AAPL would be just to say I have more AAPL. Later in the month is the time to pounce though, ugh.
proteus126
Footballguy
Bob Sacamano
Footballguy
Might need @urbanhack for this one, but somebody explain to the ignorant guy over here what's going to differentiate these companies other than the amount they can grow and any distribution networks they might be able to set up.
Because a product that is, quite literally, a weed that can be grown just about anywhere seems like it should have a limited ability for differentiation and almost 0 barriers for entry. Why should anyone expect CGC to outpace its competitors, be it Tilray or Dave the guy down the street growing in his mom's basement.
Because a product that is, quite literally, a weed that can be grown just about anywhere seems like it should have a limited ability for differentiation and almost 0 barriers for entry. Why should anyone expect CGC to outpace its competitors, be it Tilray or Dave the guy down the street growing in his mom's basement.
urbanhack
Fight The Power!
Great question. Not sure I have the answer. The product will change and be identified through quality, uniqueness and of course, marketing. Many different products being created for the different ways to ingest cannabis will be ways for companies to expand and innovate. At the end of the day cannabis has the unique opportunity for companies to control the entire experience from putting plants into the ground and then selling the final product to the consumer. You don't see that very often in this large of a supply chain with a #### ton of compliance. Look for the ones who dominate the retail and branding and then find ways to increase their margins based on tax issues, production costs and leveraging technology.
culdeus
Footballguy
Worth pointing out we are just 1 week till we pass the point where removing Trump becomes very palatable to the current GOP. Puts the possibility of a 10 year Pence term on the table.
I'm thinking the #### gets insane starting next week on all fronts. Brexit, Trump, Shutdown, and China trade.
I'm thinking the #### gets insane starting next week on all fronts. Brexit, Trump, Shutdown, and China trade.
fantasycurse42
Footballguy Jr.
Gotta be honest, if I'm up 50% on anything in a week, I'm at the very least taking my initial investment out and letting the profits ride.
skycriesmary
Climbing up the Walls
But we'd never be so stupid as to elect him....oh wait. After the 2016 election, I'll never doubt the stupidity of the American people again.
proteus126
Footballguy
I would have taken it out up 20%. This is wifey's vanity account. She's new at this. She hopes the stock splits, because she thinks that means something. I don't even bother to try to correct her. I swear, it is like the lady who wins the NCAA pool by picking based on jersey colors.
fantasycurse42
Footballguy Jr.
Last year (I think it was last year), a girl won our office NCAA pool picking chalk.
Bob Sacamano
Footballguy
fantasycurse42
Footballguy Jr.
What's this now? Is this some wishful PSF echo chamber stuff or are you talking about something real?
I've basically stopped reading Trump headlines, I haven't seen the market so clearly since I stopped Trump headlines, tbh.
Bob Sacamano
Footballguy
Doesn anybody want this?
I mean, I get that most Rs would take a guaranteed 10 years of Pence over a shot with anybody else, 'cause power. But there are no guarantees there. Even Karen probably has it as a coin flip.
fantasycurse42
Footballguy Jr.
So after some quick reads, they would need some Republican Senators to get him out. Furthermore, his base would turn their backs on the GOP for doing so.
I'd put the odds right now of a decade of Mike Pence at somewhere around the Arizona Cardinals winning the next 5 Super Bowls.
I'd put the odds right now of a decade of Mike Pence at somewhere around the Arizona Cardinals winning the next 5 Super Bowls.
fantasycurse42
Footballguy Jr.
On the positive, that would prob be the end of the GOP. All we would have to is figure out how to get rid of Dems, and find a better system than this two party bull#### we have now.
I consider this all highly unlikely.
I consider this all highly unlikely.
skycriesmary
Climbing up the Walls
Gopher State
Footballguy
Man these pot stocks are hot I bought 500 shares of canopy at 27:00 now 42:00; wondering how high they go
proteus126
Footballguy
Mario Kart
Footballguy
All of my money switching is done, unless I sell BP. I am currently sitting on about $3,500 cash and will transition that into something after earnings at the end of the month. Not sure what, he it funds, AAPL, or even more BP, or a bank stock (something else with good dividends).
Don't Noonan
Footballguy
Did you consider investing some cash on Christmas Eve? At that point we were down almost 20%. What will be a good spot in your mind?
TripItUp
Footballguy
Hard to say....I’ll probably wait for a sell off of a particular stock or broader market.
I sold everything about a week ago.
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