Sitting in for Dave on this episode of In My Day is fellow Family Financial Partners Wealth Advisor Kyrk Davis. He and Ryan discuss the lesser-known benefits of 529 plans, why Kyrk got into the business, and the differences between him and Dave.
If you enjoyed hearing from Kyrk today, check him out along with co-host Rick Gregory on How to Win. Another great podcast from Family Financial Partners.
Dave Ramsey's SmartVestor Pro is a directory of investment professionals. Working with a SmartVestor Pro does not guarantee investment success, and no assurance can be made that working with a SmartVestor Pro will produce better results than working with a financial professional not affiliated with the program. Neither Dave Ramsey nor SmartVestor are affiliates of The O.N. Equity Sales Company or O.N. Investment Management Company.
Prior to investing in a 529 Plan, investors should consider whether the investor’s or designated beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s qualified tuition program. Withdrawals used for qualified expensed are federally tax free. Tax treatment at the state level may vary. Please consult with your tax professional before investing. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.
David Smyth and Ryan Petrunyak talk about family, finances and fun. Learn more about Family Financial Partners at familyfinancialpartners.com.
Securities offered through The O.N. Equity Sales Company, Member FINRA/SIPC, One Financial Way Cincinnati, Ohio 45242 (513) 794-6794. David Smyth is an Investment Advisor Representative offering Investment Advisory services through O.N. Investment Management Company. Estate planning services provided in conjunction with your licensed legal advisor.
Sideburns versus skinny jeans? Walkmans versus airpods? Millennial or Gen Xer? We're going to dive right in to family, finances, and fun. Really, Ryan? Welcome to In My Day. Hi everyone, welcome back to another episode of In My Day. Today, with Ryan and Kyrk, we're switching it up a little bit this month. How you doing, Kyrk? Hey, I'm doing good, Ryan. How are you today? I'm good, I'm good. Will you just introduce yourself real quick to everybody? Yeah, my name is Kyrk Davis. I've been with Family Financial Partners for about eight years now. I'm also kind of a big Dave Ramsey fan and, you know, that's kind of the, one of the big reasons why I got into this this career field. Are you really? I didn't even know that. Yeah, yeah. So that's I found Dave Ramsey kind of when I first got out of college. I started putting his principles into our own lives and I really saw the positive impact that it had on us. And that kind of developed my passion for personal finance and, you know, ultimately took me this direction. Gotcha. Yeah. One of the reasons I wanted to have Kyrk on this month, they, we are both the Dave Ramsey SmartVestor pros of the office. So we figured that we would chat through some of the Dave Ramsey principles and This month, we want to talk a little bit about college planning too, so Kyrk, why don't you tell everybody, just like, for people that don't know Dave Ramsey, I'm sure a lot of them do, but just the general Dave Ramsey idea, or what his general philosophy is. Yeah, to put it in its simplest terms you know, debt's bad we want to try to pay off all of our debt as quick as possible live on less than we earn, and, you know, save and invest the, invest the difference. Absolutely. So, for those that don't know, he follows a, what he calls a baby step program where basically, let's get rid of all of our debt except for our mortgage, is the idea, and then after that, let's go ahead and try to build wealth for both ourselves and for future generations. So one of the big parts of future generations is college planning. And I think this year, this time of year is always big for that because people are like, oh, we're getting ready to graduate or we're getting ready to have a change in life with May coming up. So what, what is a good time, Kyrk, have you seen for people to start? Thinking about college savings when there's little ones or teenagers, or what's the best way that you've seen it work in practice? Well, with, with anything investing, the, the sooner we can do something, the better. One of the most powerful tools with, with investing is, is time. It's not necessarily our contributions. It's not necessarily the growth rate, but it's just simply the. time in the markets to let that money grow So in an ideal world as soon as that baby is born and has a social security number setting up a 529 plan for them and just putting a modest amount of money in there by the time they're 18 and ready to go to college you'd be amazed at what it can, what it can actually grow to. So that's what I did for my nephew. I set him up a 529 as soon as he was born. Put in a little bit of seed money for him. And then just along the way, on birthday and Christmas and that sort of thing, my parents you know, my brother his his You know, I guess mother and father in law and other people there in his life would just toss money in there instead of, you know, extra presents that my nephew's gonna forget in six months, There's enough toys already. Yeah, there's definitely enough toys, but the idea is You know, if we start early, we don't have to fund it with a crazy amount of money. And by the time he's ready to actually go to school, it's pretty much paid for. In reality, most people don't do that. Most people, when they're at that stage in life, have too many other financial responsibilities going on. They're not really at their peak earning. You know, or the peak earning potential that they have. So we have to kind of kick that can down the, down the road a little bit to maybe we're, you know, in middle school or even early high school. But at the end of the day it's better to go ahead and start as soon as you possibly can. Yeah. Yeah. One of the big concerns I always hear about doing, so what we were talking about is doing a 529 savings plan, which is just a tax advantaged option. Right. To save for qualified education expenses. And the big question I get all the time, especially in today's world, is if little Johnny ends up deciding to not go to school or doesn't get into school or wants to go into a trade or whatever, you know, what do I do with all, what do I do with that money? Am I going to have to pay taxes on all that? Well, the, they did make a change, was it last, it was either, I think it was two years ago now where you can now convert. Up to 35, 000 of that account into a Roth for your kid if your kid has income. So let's say little Johnny ends up growing up and goes to a trade school and doesn't have a lot of education expenses and there's extra money that you saved in there. That's an option to really give a huge gift because if you give someone 60 years to have tax advantage growth on something, which if you're funding it for a two year old, they're going to have a little time until retirement it can really be a great gift for people. And that, that's just kind of a way that. I think that's answered a big question for a lot of people of what am I going to do if I end up not using it for education expenses. The other thing that I always note for people too, because the other big question that we always get is what exactly is an education expense? Because a lot of people out there think you can just use it for tuition. But no. In reality, anything that's qualified education expense counts, so room and board when a kid's in college a high school private tuition a new laptop when your kid's in college, so any of those things can be included in that and just a good way to , you use that tax advantage. Mm-Hmm. So Kyrk, anything to add on the 529's or anything that we missed that we should go over? No. There, you kind of hit the, the hit the nail on the head with that depending on what state you're act, you're in. So I've, I've got several clients that are, that are outta state and depending on your state, you may actually get a a tax deduction on your, on your state taxes. Kentucky, unfortunately, is a little bit behind the times. We don't offer anything like that. Well, at least we're phasing out state tax in the near future. Yeah, so that helps. That helps as well. But yeah, there's a, there's a lot of great opportunities out there for, for the 529s. Each state's gonna have their own specific plan. And some have their, their advantages and disadvantages. So if you're kind of on the fence with that or just have questions, you know, give us a call and we'll, we'll, Kind of look at your situation and find the best plan that's going to work for you and your family. Alright, so I have one more fun question before we go. Well, maybe not fun, but it's interesting. So, everyone on here that is listening to this is probably more used to listening to Dave. So, if they were to come in and talk to Dave and have a meeting with Dave, or come in and talk to Kyrk and have a meeting with Kyrk, give me a way you guys are similar, and it'll be the exact same either way. Alright. And then the more fun question is how are you guys going to be different? Oh no. Or me too. You can put me and Dave versus Kyrk. What makes Kyrk different and what makes Kyrk the same as everybody else here? Oh, I think we're all the same in that we all have a passion for personal finance. In some way, shape, or form. So that's going to be ubiquitous across the, across the entire office and, you know, that's why we've hired the people that we have and that's why the people that, you know, we hired have stayed here for as long as they have because we kind of share that together. Where we differ is in, you know, I think some of the some of the areas of personal finance that we are most passionate about so Dave and Ryan As well are both very passionate about the about the markets That's that's kind of what drives them me on the other hand. I like the I like the more planning side of things I like the more psychology side of money there. So we'll you know, you'll, as you sit in a meeting with us and kind of talk about things, you'll have a little bit different perspective from each one of us just Depending on the the angle that we're that we're looking at but also that's why we have different personalities in the office. So You know oftentimes Dave will call me on the the phone and say hey, I've got this this problem with a client What do you what do you think? and I'll be able to look at it from the you know, the psychological side of money and And, you know, on the other hand, I'll have a, I'll have something going on with a, with a client and it's more market driven. So I'll call Dave and get his opinion on that. So coming together helps us give our clients the best overall, you know, product and experience. I think, I think a lot of people out there don't realize how much we, we communicate and rely on each other's strengths and that's, that's just a good reminder for everybody out there. So, well, thanks for coming on today, Kyrk. We did a great job. Did a pretty quick one today. Dave's usually the big talker, so I guess it's a little short when Dave's not on. But thank you everybody for tuning in to another episode of In My Day, today with Ryan and Kyrk. And we'll have Dave back next month for you. I enjoyed it. Thank you!