Episode Transcript
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Speaker 1 (00:02):
Thirteam ten wib A and ask the experts with Wisconsin
Capital Management online withzcap dot com. That's Wi s cap
dot com. Great website if you haven't a chance yet
to check it out, definitely want to do that when
you get into the office this morning and learn more
about Wisconsin Capital Management. Again that website whiz caap dot com.
(00:23):
That's wis cap dot com. Now they can get to
know the guys at Wisconsin Capital Management, Tom, Nathan and
the whole team. You can also set up an appointment
as well. Right from the website whiz cap dot com.
I mentioned Tom and Nathan. Of course Tom chartered financial
analysts with Wisconsin Capital Management. Tom, how are you doing
this morning?
Speaker 2 (00:41):
Well, it's great to be here. Sean's thank you.
Speaker 1 (00:44):
Great to have you along. Nathan Plumb as well, certified
trust advisor as well as executive NBA. Nathan, how you
doing this week?
Speaker 3 (00:52):
Yeah, thanks for having us. This is one of our
favorite topics.
Speaker 1 (00:55):
It is a great topic. Yeah, we're going to be
talking about the five two nine, five twenty nine plans
and what they are and a little bit about timing.
Let's let's kind of get in a little bit about
this about this subject and it really it really affects
just about every family with children at some point. Of course,
the importance of saving for education, Tom Nathan, thanks for
joining me. Let's talk a little bit about this, of course,
(01:18):
the significant issue. There's a lot of different methods though
when it comes to when it comes to this stuff,
you think that the five two nine plan is such
an effective and flexible tool. Let's talk about why it
is and what exactly a five to nine plan is.
Speaker 3 (01:31):
Nathan, Yeah, a I twenty nine plan is like a
roth Ira but for education, and you put after tax
dollars in and the money grows tax free. As long
as you use it for a qualified education expenses, you
can pull it out tax free too. So every state
sponsors one. But you're not in You're you're not limited
(01:54):
to your own stakes plan and there's actually no income
limits involved.
Speaker 1 (01:59):
Would say real quick about that. So, as I said
here in beautiful Madison, Wisconsin, if I were to look
and let's say, uh, Washington State, for example, I could
could I, in theory, as you say that, or am
am I misunderstanding that? Could I in theory invest through
the Washington State five to nine plan?
Speaker 3 (02:19):
Yeah, it's the if you're living in Wisconsin and you
wanted to use the five twenty nine plan in Washington,
you could definitely do that, but you would actually lose
the Wisconsin tax deduction that would go with that. So
through with of course you predent to be edgible for
(02:39):
the tax credit, you'd have to use something that would
be either through the State Privy which is called ed vest,
or you have to use something called Tomorrow Scholar to
get the benefit. So but if you like the investments
choices within the state of Wisconsin and you don't care
about the tax credit, yeah, you could definitely do that.
So you're not not limited to that.
Speaker 1 (02:59):
Really fastating stuff. This morning, as we talk with chartered
financial analyst Tom Plumb as well as Nathan Plum, certified
trust advisor with Wisconsin Capital Management Online wizcap dot com.
That's wizcap dot com. That's wis cap dot com. So
what exactly Nathan counts as we talk about that qualified
(03:19):
education expense, what exactly are those what counts?
Speaker 3 (03:23):
Well, they are a very broad amount of things. So
since they kind of revised the rule, you can do
it for not just colleges, but you can use it
for trade schools. You can even use it for like
high school or even preschool. So it just has to
be a qualified expense. And so every education provider has
(03:44):
a federal code, and as long as they have a
federal code, usually that's what you can do. So, but
things that you can't do or you can't say, oh,
you can't expense your transportation to schooling back. You can't
pay for furniture in a dorm room or posters or
artwork like that. But you know all those songs it has,
like books, tuition, you know, things that really help your education.
(04:08):
You can go for it.
Speaker 1 (04:09):
Well, that is fascinating, Tom, I know, I know you've
got some insight into this as well, don't you.
Speaker 2 (04:15):
Oh yeah. Now, besides the flexibility and all that that
native and laid out, you know, the other two big
things are the flexibility and the control. Control is that
the parent or the account owner, whoever set it up,
or whoever is named as the custodian under that agreement,
(04:38):
controls the account. So someone doesn't turn eighteen all of
a sudden they have access unlimited to this. It has
to go for those expenses, but it can be controlled
by the person who's named as the control person. And
then the other point is the flexibility because if that
(04:59):
beneficiary doesn't use it for a qualified person can actually
transfer it to another beneficiary.
Speaker 1 (05:06):
Wow, that's powerful. As you know, I think as we've
probably got a bunch of kids running around with mom
and dad or maybe their grandparents this morning, they're getting
all excited. Goal and that's my money. The reality is,
as a parent, grandparent, you have some control, don't you.
Speaker 2 (05:20):
Tom, Oh, you sure do. I mean, so you know
you have these tax advantages and you have this discipline.
We think about it as like a greenhouse for your money.
It grows protected from taxes until you harvested for your education. Plus,
in many states like Wisconsin, as Nathan said, you can
(05:41):
actually get a state tax deduction when you use their
specific plan up to a limit, of course, but it's
in Wisconsin right now. It's currently over five thousand dollars
that you be able to deduct for your state income
tax preparation.
Speaker 1 (05:58):
Talking this morning with Tom Plumbing and Plumb of course
with Wisconsin Capital Management Online whiz cap dot com. That's
wiz wiscap dot com. Talking this week about those five
twenty nine plans. Some of the great benefits to using
them some of the flexibility. I think a lot of
times people aren't aware of some of the different things
(06:18):
that they offer with these plans. So it sounds to
me like in Nathan, I gotta say, if I'm hearing
this right, it sounds like families get a double benefit
here as they get the tax free growth and sometimes
a state tax break. Am I understanding that correctly?
Speaker 3 (06:34):
Yeah, exactly. In Wisconsin, contributions to ed vest or Tomorrow's
scholar program our deductile after the number is five one
and thirty dollars per beneficiary. For if you're filing jointly
in twenty twenty five. Again, you can go out of
state or you could open an account at schwab, but you
might lose that deduction, and you probably would so, but
(06:57):
the real benefit is that you grows tax free, so
it grows has a power compounding, and so it's really
a great way to say. For I don't think a
child or some excerience, but even if you're an adult
learner as well, so there's really you shouldn't just think
this is just for young people.
Speaker 1 (07:14):
Oh, that's an interesting aspect to us. I think a
lot of us as we as we get older, start
looking at just kind of expanding our knowledge base, and
I'm looking for great tools. That sounds like it could
be a great one as well. I don't know that
a lot of people we're aware of that. Of course,
talking this morning with Nate and Tom Plumb of Wisconsin
Capital Management online wizcap dot com. That's wiscap dot com.
(07:38):
Great website and resource. Learn more about Wisconsin Capital Management,
how they can help you, and of course if you
are looking to set up an appointment, you can do
that right online the website whizcap dot com. That's wis
cap dot com. You know, one of the things I
think big fears that that parents have is hurting their
kids' chances for financial aid. How exactly then when it
(07:58):
comes to these five twenty nine plans and how do
they show up on those aid forms?
Speaker 3 (08:02):
Nathan, you know, that's a great question. So when you
fill out something called the FAFT stuff that's FAFSA and
that stands for the Free Application for Federal Student Aid,
the apparent owed five to twenty nine plan is treated
as a parental asset. So when you're filling out fast
(08:23):
at what's money in your child's name? Is one for
one counts against you. And if it's in your in
the parent's name, it's a ratio down. So it's only
about five point six percent of its values counted if
it's in your if it's in the family member's name
like yourself, and that'd be the five to twenty nine
(08:44):
plan compared to if you just gave the student a
check and said, you know, go with it, that would
count up to twenty percent against financial aids. So that's
why having the five twenty nine in the parent's name
is beneficial, and it's you know, it's most eight friendly
way to save. And you know we try to be
(09:04):
timely on the show too, So these forums open up
on October first. It's a first come, first serve and
you know, really spread the word. There's no income limits
on this and you know, you can qualify for a
lot of different things. So especially if you are really
looking for money to enhance their education, are really this
(09:26):
is timely information for you.
Speaker 1 (09:28):
Very much, So really good stuff this morning talking with
Nathan and Tom Plumb of Wisconsin Capital Management. So when
when should families actually then Tom fill out that FAFSA form.
When when should they be doing that stuff?
Speaker 2 (09:41):
Well, Nathan and mentioned that the deadline or the opening
starts October first, So that's one of the reasons why
on September thirtieth we're talking about this. And then you
could also file each and every year. So it's important
to make your first filing, but then all so to
continue those filings.
Speaker 1 (10:02):
Well, fantastic, great and again super timely for sure. I
definitely hope folks are catching that. And by the way,
speaking of catching things, I know, obviously in the morning,
a lot of as step away from our car, maybe
grab a cup of coffee, or dropping the kids and
grandkids off at school. Maybe a mispart of the program.
Maybe you want to share the show, maybe you want
to listen back to something you heard to make sure
(10:22):
you heard it. Well, of course you head on over
to wizcap dot com. You can listen back to this
in previous shows podcasts. Again, that website wiscap dot com
also available up at wiba dot com. In the as
the experts segment, this is of course asked the experts
with Wisconsin Capital Management mentioned the website whizcap dot com.
That's wiscap dot com. So now we've talked about kind
(10:43):
of all the great benefits of a five twenty nine.
What about what's inside how to invest in them? We're
going to get the details from Tom and Nathan. We
will do that next as Ask the Experts with Wisconsin
Capital Management continues right here on thirteen ten wi b
A WYBA and Ask the Experts with Wisconsin Capital Management.
(11:09):
Hanging out this morning talking with Tom Plum of Wisconsin
Capital Management. He is a Chartered Financial Analyst at Nathan
Plumb with Wisconsin Capital Management, he is a Certified Trust
Advisor with an executive MBA. Before we start talking about
kind of getting into investing, what to put inside these
five two nines? Real quick on Nathan. In that last segment,
we're talking about when to start with the f A FSA.
(11:33):
It's a little bit of a tongue twister. There is
other timing as well as far as where your kids
are in their schooling career, isn't.
Speaker 3 (11:39):
There Yeah, so fas usually you want to do this
starting the October of your junior year of high school.
So mostly people finish your high school one year, so
I'd be the majority of the people that have so
some people finish early, like you hear of these, you know,
football players that want to get into spring camp, so
(12:00):
you know, they might do it earlier, but essentially you
want to start this in October of your junior year
in high school. This is when you really should go
at that. And if you don't know exactly what you
should qualify, you should go to Financial Aid dot gov
and they can give you some some parameters. That's a
government website, so it's a lot of information.
Speaker 1 (12:19):
A great tool there. And so then as we talk
about this area about you know, the opening up that
of that five twenty nine Tom, how should folks then
invest their money?
Speaker 2 (12:31):
Well, Sean, as we've said before, some of these plans
actually have set up or they have a cookie cutter,
if you will, and they basically have what's called an
age base or target date portfolios, and they automatically shift
you from stocks, which we know can be more voweled,
to bonds as your child gets closer to college. And
(12:55):
that's what really works out pretty well for some families,
but maybe not all family.
Speaker 1 (13:01):
Nathan, you want to add something.
Speaker 3 (13:02):
There, Yeah, So I guess our experience of the real
world that since you know, education expensive have really been
uh subject to inflation much higher than the general economy
that you know, find find that people just pick like
a low cost S and P five hundred index or
as dec index really produces better outcomes and real world accounts.
(13:28):
So I actually, you know you don't have to use
the default. I know that you know it's the first
one picked for you, but uh, I guess in real experience,
it's best to pick from the menu.
Speaker 1 (13:38):
That is a really good guidance, really good advice this
morning as we talk with Nathan and Tom Plump with
Wisconsin Capital Management, the website whizcap dot com. That's w
I s c ap dot com. So taking off from that,
Nathan could be more aggressive then if if you start early.
Speaker 3 (13:55):
Yeah, exactly. So you know investing is all about uh
time value money, with time being the most important factor
in that formula. So again, if you're a toddler, you
should probably go one hundred percent and something like the
S and P five hundred index, which is all stocks
for at least probably ten to twelve years. And then
if you're getting a little nervous before education, you can
(14:17):
start pulling that back into putting some more bonds or
get that more solid. If that you got to number
that you liked.
Speaker 1 (14:24):
And Tom, I know you're nodding This is definitely something
you concur with, isn't it.
Speaker 2 (14:29):
Yeah, definitely, And sometimes that's where working with an advisor
can really help you customize your allocation and make sure
that you're not just taking the default which may be
the best for the average person, but it might not
be your best.
Speaker 1 (14:47):
Really great get guide as an advice, and we're talking
a little bit about kind of putting these plans into
action as we talked this morning with Tom and Nathan
plumb off Wisconsin Capital Management, the website wiz cap dot com.
That's was cap dot com.
Speaker 2 (15:00):
Eighth.
Speaker 1 (15:00):
Then, what's kind of your advice and guidance to parents
or grandparents that are that are listening this morning.
Speaker 3 (15:06):
Yeah, so initially when this conversation usually comes up is
usually when a parent or grandparent as a new you know,
parent or grandchild and you know, the thing is just
again it's a common theme in the show, but just
to start right, so, you know, even like fifty dollars
or one hundred dollars a month, like if you especially
do kind of do that automatic investing, that's talking about
(15:29):
the magic of compounding. So if you were investing that money,
hopefully it will double every you know, about seven eight years.
And you know, so if you like, taking a real
world example, so if you started with like a five
thousand dollars initial contribution and he added one hundred dollars
a month or you know, twelve years, you know that
(15:50):
would grow to thirty one thousand dollars, you know, with
a six percent return and you know, fifty three thousand
dollars in eighteen years. So, uh, the thing, the key
part to real success as a starting and then b
just automatic your investments. You can change those up and
down depending on you know, what things a been going
in life. But you know it's a pick an investment
(16:12):
in the strategy you can stick with. And you know,
if you review with people like us like once a
year and there's any tax updates, so like that we
can take advantage of we can we can definitely help you.
Speaker 2 (16:22):
You know.
Speaker 1 (16:23):
It's funny as my son and I over the summer
on a road trip, driving driving out east. He's he's
become a bit of a roller coaster junkie. And so
we were going to a bunch of amusement parks and
got some downtime in the car and and I know, Tom,
you and I had talked a while ago about compounding
and what a great tool it is. I had him
(16:43):
get out his phone and I said, I said, put
in there. I said, there's calculators out there. I said,
put in there. Imagine you invested one thousand dollars twenty
years ago in the S and P five hundred. Where
would it be today? And it was amazing. He's thirteen,
and his eyes lit up and he's like, oh my gosh,
what a what an investment that would have been. And
(17:03):
I've got to say, as we talk about this stuff
reaching out to Wisconsin Capital Management, you guys can really
help people with this, can't you?
Speaker 2 (17:11):
Absolutely? Sean, you know you think about it. Each plan
might have a little bit of intricacies, but we can
help people compare those plans, choose the investment, whether or
not it's an SNP index fund or something else. But
we can integrate the education savings into a family's overall
(17:32):
financial plan. And listeners, of course, can find it us
at wiscap dot com.
Speaker 1 (17:38):
That's wiscap dot com. I can't highlight and emphasize enough
what a great website and a great tool whiz cap
dot com is. If you are looking for more information
about Wisconsin Capital management. Of course, we're talking this morning
about five twenty nine plans, definitely a place to start.
Wiz cap dot com. That's wiscap dot com. Of course,
(17:59):
as we close out this week's show, we've got a
lot of great advice on five twenty nine plans. What
a powerful two they are, and of course getting that
understanding of how they work and they can really help
families get ahead. Tom Nathan, thank you guys both so
much for breaking this down and now you guys, thank
you for taking the time this morning.
Speaker 2 (18:15):
Well our pleasure. Sean, thank you very much.
Speaker 3 (18:18):
Yeah, thanks for having us and make sure if you're
junior in high school, started looking at those paths of forms.
Speaker 1 (18:24):
And that's more fun than it sounds exactly for sure.
Thank you both, and of course thanks everybody for listening.
Don't forget this is an important thing. If you missed
any part of the program, you could always listen back,
catch the podcast, listen back to the website. We'll be
doing it again next week with ask the Experts and
of course with more ways to grow and protect your wealth. Again.
That website whizcap dot com. That's wis cap dot com.
(18:49):
Great starting point for all of this information. Again, that's
wiz cap dot com, wiscap dot com. More of matdis
in the morning comes your way next right here on
thirteen ten, wib like
Thirteam ten wib A and ask the experts with Wisconsin
Capital Management online withzcap dot com. That's Wi s cap
dot com. Great website if you haven't a chance yet
to check it out, definitely want to do that when
you get into the office this morning and learn more
about Wisconsin Capital Management. Again that website whiz caap dot com.
(00:23):
That's wis cap dot com. Now they can get to
know the guys at Wisconsin Capital Management, Tom, Nathan and
the whole team. You can also set up an appointment
as well. Right from the website whiz cap dot com.
I mentioned Tom and Nathan. Of course Tom chartered financial
analysts with Wisconsin Capital Management. Tom, how are you doing
this morning?
Speaker 2 (00:41):
Well, it's great to be here. Sean's thank you.
Speaker 1 (00:44):
Great to have you along. Nathan Plumb as well, certified
trust advisor as well as executive NBA. Nathan, how you
doing this week?
Speaker 3 (00:52):
Yeah, thanks for having us. This is one of our
favorite topics.
Speaker 1 (00:55):
It is a great topic. Yeah, we're going to be
talking about the five two nine, five twenty nine plans
and what they are and a little bit about timing.
Let's let's kind of get in a little bit about
this about this subject and it really it really affects
just about every family with children at some point. Of course,
the importance of saving for education, Tom Nathan, thanks for
joining me. Let's talk a little bit about this, of course,
(01:18):
the significant issue. There's a lot of different methods though
when it comes to when it comes to this stuff,
you think that the five two nine plan is such
an effective and flexible tool. Let's talk about why it
is and what exactly a five to nine plan is.
Speaker 3 (01:31):
Nathan, Yeah, a I twenty nine plan is like a
roth Ira but for education, and you put after tax
dollars in and the money grows tax free. As long
as you use it for a qualified education expenses, you
can pull it out tax free too. So every state
sponsors one. But you're not in You're you're not limited
(01:54):
to your own stakes plan and there's actually no income
limits involved.
Speaker 1 (01:59):
Would say real quick about that. So, as I said
here in beautiful Madison, Wisconsin, if I were to look
and let's say, uh, Washington State, for example, I could
could I, in theory, as you say that, or am
am I misunderstanding that? Could I in theory invest through
the Washington State five to nine plan?
Speaker 3 (02:19):
Yeah, it's the if you're living in Wisconsin and you
wanted to use the five twenty nine plan in Washington,
you could definitely do that, but you would actually lose
the Wisconsin tax deduction that would go with that. So
through with of course you predent to be edgible for
(02:39):
the tax credit, you'd have to use something that would
be either through the State Privy which is called ed vest,
or you have to use something called Tomorrow Scholar to
get the benefit. So but if you like the investments
choices within the state of Wisconsin and you don't care
about the tax credit, yeah, you could definitely do that.
So you're not not limited to that.
Speaker 1 (02:59):
Really fastating stuff. This morning, as we talk with chartered
financial analyst Tom Plumb as well as Nathan Plum, certified
trust advisor with Wisconsin Capital Management Online wizcap dot com.
That's wizcap dot com. That's wis cap dot com. So
what exactly Nathan counts as we talk about that qualified
(03:19):
education expense, what exactly are those what counts?
Speaker 3 (03:23):
Well, they are a very broad amount of things. So
since they kind of revised the rule, you can do
it for not just colleges, but you can use it
for trade schools. You can even use it for like
high school or even preschool. So it just has to
be a qualified expense. And so every education provider has
(03:44):
a federal code, and as long as they have a
federal code, usually that's what you can do. So, but
things that you can't do or you can't say, oh,
you can't expense your transportation to schooling back. You can't
pay for furniture in a dorm room or posters or
artwork like that. But you know all those songs it has,
like books, tuition, you know, things that really help your education.
(04:08):
You can go for it.
Speaker 1 (04:09):
Well, that is fascinating, Tom, I know, I know you've
got some insight into this as well, don't you.
Speaker 2 (04:15):
Oh yeah. Now, besides the flexibility and all that that
native and laid out, you know, the other two big
things are the flexibility and the control. Control is that
the parent or the account owner, whoever set it up,
or whoever is named as the custodian under that agreement,
(04:38):
controls the account. So someone doesn't turn eighteen all of
a sudden they have access unlimited to this. It has
to go for those expenses, but it can be controlled
by the person who's named as the control person. And
then the other point is the flexibility because if that
(04:59):
beneficiary doesn't use it for a qualified person can actually
transfer it to another beneficiary.
Speaker 1 (05:06):
Wow, that's powerful. As you know, I think as we've
probably got a bunch of kids running around with mom
and dad or maybe their grandparents this morning, they're getting
all excited. Goal and that's my money. The reality is,
as a parent, grandparent, you have some control, don't you.
Speaker 2 (05:20):
Tom, Oh, you sure do. I mean, so you know
you have these tax advantages and you have this discipline.
We think about it as like a greenhouse for your money.
It grows protected from taxes until you harvested for your education. Plus,
in many states like Wisconsin, as Nathan said, you can
(05:41):
actually get a state tax deduction when you use their
specific plan up to a limit, of course, but it's
in Wisconsin right now. It's currently over five thousand dollars
that you be able to deduct for your state income
tax preparation.
Speaker 1 (05:58):
Talking this morning with Tom Plumbing and Plumb of course
with Wisconsin Capital Management Online whiz cap dot com. That's
wiz wiscap dot com. Talking this week about those five
twenty nine plans. Some of the great benefits to using
them some of the flexibility. I think a lot of
times people aren't aware of some of the different things
(06:18):
that they offer with these plans. So it sounds to
me like in Nathan, I gotta say, if I'm hearing
this right, it sounds like families get a double benefit
here as they get the tax free growth and sometimes
a state tax break. Am I understanding that correctly?
Speaker 3 (06:34):
Yeah, exactly. In Wisconsin, contributions to ed vest or Tomorrow's
scholar program our deductile after the number is five one
and thirty dollars per beneficiary. For if you're filing jointly
in twenty twenty five. Again, you can go out of
state or you could open an account at schwab, but you
might lose that deduction, and you probably would so, but
(06:57):
the real benefit is that you grows tax free, so
it grows has a power compounding, and so it's really
a great way to say. For I don't think a
child or some excerience, but even if you're an adult
learner as well, so there's really you shouldn't just think
this is just for young people.
Speaker 1 (07:14):
Oh, that's an interesting aspect to us. I think a
lot of us as we as we get older, start
looking at just kind of expanding our knowledge base, and
I'm looking for great tools. That sounds like it could
be a great one as well. I don't know that
a lot of people we're aware of that. Of course,
talking this morning with Nate and Tom Plumb of Wisconsin
Capital Management online wizcap dot com. That's wiscap dot com.
(07:38):
Great website and resource. Learn more about Wisconsin Capital Management,
how they can help you, and of course if you
are looking to set up an appointment, you can do
that right online the website whizcap dot com. That's wis
cap dot com. You know, one of the things I
think big fears that that parents have is hurting their
kids' chances for financial aid. How exactly then when it
(07:58):
comes to these five twenty nine plans and how do
they show up on those aid forms?
Speaker 3 (08:02):
Nathan, you know, that's a great question. So when you
fill out something called the FAFT stuff that's FAFSA and
that stands for the Free Application for Federal Student Aid,
the apparent owed five to twenty nine plan is treated
as a parental asset. So when you're filling out fast
(08:23):
at what's money in your child's name? Is one for
one counts against you. And if it's in your in
the parent's name, it's a ratio down. So it's only
about five point six percent of its values counted if
it's in your if it's in the family member's name
like yourself, and that'd be the five to twenty nine
(08:44):
plan compared to if you just gave the student a
check and said, you know, go with it, that would
count up to twenty percent against financial aids. So that's
why having the five twenty nine in the parent's name
is beneficial, and it's you know, it's most eight friendly
way to save. And you know we try to be
(09:04):
timely on the show too, So these forums open up
on October first. It's a first come, first serve and
you know, really spread the word. There's no income limits
on this and you know, you can qualify for a
lot of different things. So especially if you are really
looking for money to enhance their education, are really this
(09:26):
is timely information for you.
Speaker 1 (09:28):
Very much, So really good stuff this morning talking with
Nathan and Tom Plumb of Wisconsin Capital Management. So when
when should families actually then Tom fill out that FAFSA form.
When when should they be doing that stuff?
Speaker 2 (09:41):
Well, Nathan and mentioned that the deadline or the opening
starts October first, So that's one of the reasons why
on September thirtieth we're talking about this. And then you
could also file each and every year. So it's important
to make your first filing, but then all so to
continue those filings.
Speaker 1 (10:02):
Well, fantastic, great and again super timely for sure. I
definitely hope folks are catching that. And by the way,
speaking of catching things, I know, obviously in the morning,
a lot of as step away from our car, maybe
grab a cup of coffee, or dropping the kids and
grandkids off at school. Maybe a mispart of the program.
Maybe you want to share the show, maybe you want
to listen back to something you heard to make sure
(10:22):
you heard it. Well, of course you head on over
to wizcap dot com. You can listen back to this
in previous shows podcasts. Again, that website wiscap dot com
also available up at wiba dot com. In the as
the experts segment, this is of course asked the experts
with Wisconsin Capital Management mentioned the website whizcap dot com.
That's wiscap dot com. So now we've talked about kind
(10:43):
of all the great benefits of a five twenty nine.
What about what's inside how to invest in them? We're
going to get the details from Tom and Nathan. We
will do that next as Ask the Experts with Wisconsin
Capital Management continues right here on thirteen ten wi b
A WYBA and Ask the Experts with Wisconsin Capital Management.
(11:09):
Hanging out this morning talking with Tom Plum of Wisconsin
Capital Management. He is a Chartered Financial Analyst at Nathan
Plumb with Wisconsin Capital Management, he is a Certified Trust
Advisor with an executive MBA. Before we start talking about
kind of getting into investing, what to put inside these
five two nines? Real quick on Nathan. In that last segment,
we're talking about when to start with the f A FSA.
(11:33):
It's a little bit of a tongue twister. There is
other timing as well as far as where your kids
are in their schooling career, isn't.
Speaker 3 (11:39):
There Yeah, so fas usually you want to do this
starting the October of your junior year of high school.
So mostly people finish your high school one year, so
I'd be the majority of the people that have so
some people finish early, like you hear of these, you know,
football players that want to get into spring camp, so
(12:00):
you know, they might do it earlier, but essentially you
want to start this in October of your junior year
in high school. This is when you really should go
at that. And if you don't know exactly what you
should qualify, you should go to Financial Aid dot gov
and they can give you some some parameters. That's a
government website, so it's a lot of information.
Speaker 1 (12:19):
A great tool there. And so then as we talk
about this area about you know, the opening up that
of that five twenty nine Tom, how should folks then
invest their money?
Speaker 2 (12:31):
Well, Sean, as we've said before, some of these plans
actually have set up or they have a cookie cutter,
if you will, and they basically have what's called an
age base or target date portfolios, and they automatically shift
you from stocks, which we know can be more voweled,
to bonds as your child gets closer to college. And
(12:55):
that's what really works out pretty well for some families,
but maybe not all family.
Speaker 1 (13:01):
Nathan, you want to add something.
Speaker 3 (13:02):
There, Yeah, So I guess our experience of the real
world that since you know, education expensive have really been
uh subject to inflation much higher than the general economy
that you know, find find that people just pick like
a low cost S and P five hundred index or
as dec index really produces better outcomes and real world accounts.
(13:28):
So I actually, you know you don't have to use
the default. I know that you know it's the first
one picked for you, but uh, I guess in real experience,
it's best to pick from the menu.
Speaker 1 (13:38):
That is a really good guidance, really good advice this
morning as we talk with Nathan and Tom Plump with
Wisconsin Capital Management, the website whizcap dot com. That's w
I s c ap dot com. So taking off from that,
Nathan could be more aggressive then if if you start early.
Speaker 3 (13:55):
Yeah, exactly. So you know investing is all about uh
time value money, with time being the most important factor
in that formula. So again, if you're a toddler, you
should probably go one hundred percent and something like the
S and P five hundred index, which is all stocks
for at least probably ten to twelve years. And then
if you're getting a little nervous before education, you can
(14:17):
start pulling that back into putting some more bonds or
get that more solid. If that you got to number
that you liked.
Speaker 1 (14:24):
And Tom, I know you're nodding This is definitely something
you concur with, isn't it.
Speaker 2 (14:29):
Yeah, definitely, And sometimes that's where working with an advisor
can really help you customize your allocation and make sure
that you're not just taking the default which may be
the best for the average person, but it might not
be your best.
Speaker 1 (14:47):
Really great get guide as an advice, and we're talking
a little bit about kind of putting these plans into
action as we talked this morning with Tom and Nathan
plumb off Wisconsin Capital Management, the website wiz cap dot com.
That's was cap dot com.
Speaker 2 (15:00):
Eighth.
Speaker 1 (15:00):
Then, what's kind of your advice and guidance to parents
or grandparents that are that are listening this morning.
Speaker 3 (15:06):
Yeah, so initially when this conversation usually comes up is
usually when a parent or grandparent as a new you know,
parent or grandchild and you know, the thing is just
again it's a common theme in the show, but just
to start right, so, you know, even like fifty dollars
or one hundred dollars a month, like if you especially
do kind of do that automatic investing, that's talking about
(15:29):
the magic of compounding. So if you were investing that money,
hopefully it will double every you know, about seven eight years.
And you know, so if you like, taking a real
world example, so if you started with like a five
thousand dollars initial contribution and he added one hundred dollars
a month or you know, twelve years, you know that
(15:50):
would grow to thirty one thousand dollars, you know, with
a six percent return and you know, fifty three thousand
dollars in eighteen years. So, uh, the thing, the key
part to real success as a starting and then b
just automatic your investments. You can change those up and
down depending on you know, what things a been going
in life. But you know it's a pick an investment
(16:12):
in the strategy you can stick with. And you know,
if you review with people like us like once a
year and there's any tax updates, so like that we
can take advantage of we can we can definitely help you.
Speaker 2 (16:22):
You know.
Speaker 1 (16:23):
It's funny as my son and I over the summer
on a road trip, driving driving out east. He's he's
become a bit of a roller coaster junkie. And so
we were going to a bunch of amusement parks and
got some downtime in the car and and I know, Tom,
you and I had talked a while ago about compounding
and what a great tool it is. I had him
(16:43):
get out his phone and I said, I said, put
in there. I said, there's calculators out there. I said,
put in there. Imagine you invested one thousand dollars twenty
years ago in the S and P five hundred. Where
would it be today? And it was amazing. He's thirteen,
and his eyes lit up and he's like, oh my gosh,
what a what an investment that would have been. And
(17:03):
I've got to say, as we talk about this stuff
reaching out to Wisconsin Capital Management, you guys can really
help people with this, can't you?
Speaker 2 (17:11):
Absolutely? Sean, you know you think about it. Each plan
might have a little bit of intricacies, but we can
help people compare those plans, choose the investment, whether or
not it's an SNP index fund or something else. But
we can integrate the education savings into a family's overall
(17:32):
financial plan. And listeners, of course, can find it us
at wiscap dot com.
Speaker 1 (17:38):
That's wiscap dot com. I can't highlight and emphasize enough
what a great website and a great tool whiz cap
dot com is. If you are looking for more information
about Wisconsin Capital management. Of course, we're talking this morning
about five twenty nine plans, definitely a place to start.
Wiz cap dot com. That's wiscap dot com. Of course,
(17:59):
as we close out this week's show, we've got a
lot of great advice on five twenty nine plans. What
a powerful two they are, and of course getting that
understanding of how they work and they can really help
families get ahead. Tom Nathan, thank you guys both so
much for breaking this down and now you guys, thank
you for taking the time this morning.
Speaker 2 (18:15):
Well our pleasure. Sean, thank you very much.
Speaker 3 (18:18):
Yeah, thanks for having us and make sure if you're
junior in high school, started looking at those paths of forms.
Speaker 1 (18:24):
And that's more fun than it sounds exactly for sure.
Thank you both, and of course thanks everybody for listening.
Don't forget this is an important thing. If you missed
any part of the program, you could always listen back,
catch the podcast, listen back to the website. We'll be
doing it again next week with ask the Experts and
of course with more ways to grow and protect your wealth. Again.
That website whizcap dot com. That's wis cap dot com.
(18:49):
Great starting point for all of this information. Again, that's
wiz cap dot com, wiscap dot com. More of matdis
in the morning comes your way next right here on
thirteen ten, wib like
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