Are 529's Really The Best Investment For College? 

Guys - I’m a doctor (MD board certified pediatrician with my own practice). I’ve been asked ONCE in twenty years where I did undergrad, maybe twice where I went to medical school, and not a single time where I did residency training. I had a full scholarship to a state school and the Army paid for medical school. Zero debt higher education is possible!

I’d rather have $800k than a degree lol

These people need to realize, there really isn't such a thing as a top tier school, just an overpriced school

they make 500k and they're afraid of paying for college? I'm crying

It is not about top-tier schools; it is about finding the best fit for your kids.

This was a great video. I have 4 kids and one went to Indiana University, one to University of Oklahoma, Vanderbilt and this last child Purdue. I made my kids do cost spreadsheets for every school they wanted to go to. You had to prove to me the whys and how. All 4 college educated and debt free. The Vandy child was a full ride and the others were tuition free. I'm not killing myself by having so much debt and now I can't live. I have a cousin who happens to be a MD and he started at a community college and worked his way up. Great video.

At 5:50, George misspoke. Money does not go into a 529 plan tax free. Some states do allow a deduction when you contribute. Your federal return does NOT allow a deduction.

Top colleges are about making connections. That’s really what you pay for

It's officially sweater season in the Kenneth household. What a great time to be alive.

I assume she is in her late 20's or possibly early 30's. If you're making $500K / year, the baby steps aren't baby steps, they are giant leaps and bounds. The steps aren't steps....All she has to do is put $100K in the 529 for each kid. Put $500K in the retirement accounts. You do both of those early enough, you just use time on your side to watch it grow. This is part of the coast FIRE calculation that works.

A couple who makes $500k combined and they went to an elite college... but these hosts say it doesn't matter where you went to college. If you can afford to send your kid to one of these schools then I'd do it because you're going to surround them with other smart and/or wealthy students. This network will put them on a better path in life, relationships, jobs, etc. Now going into a ton of debt for these programs might not be a wise move but this couple should be multi-millionaires by the time their kids go to college.

500k household income and you have a question like that and don't clearly understand you can cash flow college? I need to know what they do for a living because I'm definitely doing something wrong.

I’m here taking notes! I have fully funded my emergency fund now moving on to investment accounts 🙂

Rough times. I pray that they can get though all of it.

I worked in higher ed for over 20 years. Degree paper matters, college name doesn't. Only bragging rights.

Makes 500k, sounds like she makes 30k... perhaps that name brand school really does count 😂

While I don't ask for physical diplomas, I do check where doctors/dentiats graduated from, as a part of their profile. I skipped one specifically that graduated from a Carribean medical school that did not have great references.

Give yourself flexibility, dont lock it up in a 529. The lack of financial education so many high earners have always surprises me.

Top tier universities do convey some benefits- they provide unique opportunities, offer connections, and open doors. But you wouldn’t know or appreciate that if you didn’t attend one. Whether it’s worth the cost of attending one over a good public university is a different question but don’t be fooled into thinking there are zero benefits to attending a top school.

5:46 saying that 529 contributions “go in tax free” is incorrect. Contributions are made after-tax although many if not most or all states do have tax advantages for contributions up to a certain amount annually. Good video otherwise but that is a big distinction to make. 529 contributions are NOT like 401k contributions, for example

Not nobody, the people who matter do care where you go to school. Your employer, your grad school/medical school admissions committee, your residency / fellowship admissions committee. Your social circle and your partner’s mom and dad. Sure, lots of people care. We say they don’t, but that is a big lie.

In some circles its not what you know , its WHO you know.

That was a great doctor analogy.

NO! NEVER ASSUME your 529 will appreciate! It totally depends on the 529 you choose. Our daughter was gifted money by a dear relative to be designated toward college. Her dad and I immediately put it into a 529 out of Rhode Island in her name. Thank God we never added more to it, because by the time she went to college, it had lost 20% of its value!

Every doctor I have had always has all their diplomas, degrees and certificates plainly on display and I know where they all went to medical college. If I was rich and money was no object it might actually matter where that degree is from. Also, the caller is in the top 0.1%, doesn't matter where they put their kids college fund because it will be amply funded.

Academic surgeons in metropolitan cities are asked where they studied & trained by their patients on a weekly basis. This is probably less often if you're a community-based doctor in the suburbs. I think the same can be applied to lawyers, accountants, college professors etc. Prestigious hospitals, law firms, universities would not even consider your application unless you went to a top-tier college at its level. The "name" of the school does carry value if you end up pursing a career that requires it. It definitely opens doors and opportunities. Whether the cost justify the means, I think that's a personal assessment on one's goals and ambitions.

It sounds like she wants a good quality of education for her children and that costs money. Schools matter. I have friends that went to better universities than me and I can tell you that even though i have the same job, the value of a good education surpassed how much you make. Just a thought.......

4:05 😂wow thats a good one Ken Coleman you got me thinking on that one !!!!!!!!!!! Nice love it !!!

Doesn’t seem those top tier degrees helped them think logically.

They act astonished at the amount, but tuition rates have far outpaced inflation and wage growth, and if it continues at current rates, yeah, $800k is about average for a higher-end university education (including room & board).

We have a responsibility to educate our children. College is just another four years and everyone’s pay taxes for public schools so how is the high school receiving per student per day?

Wrong line of reasoning. The patient doesn’t ask for where the doctor went to college, but the hospital administrators did before they rolled out the offer.

It doesn't matter to the patient where the doctor went to school, the practice that hires the doctor it does matter. I can't believe the strawman argument that is presented here. Usually I'm on board with you guys, but I think you missed the mark with your analogy.

Unless you are a doctor, the argument they try to make isn’t really relevant. Prospective employers absolutely care where you went to school and like it or not, better schools will open doors. This is coming from someone who got my degrees from state schools and whose kids will likely be going to state schools.

Where you go to college DOES matter for top jobs in large firms like PWC and many famous law firms. I worked in a courthouse and the judge would toss any resume from students that went to lower level schools and had GPAs lower than 3.3. Also, if you go to a small community college, you will most likely get overlooked compared to someone who goes to Yale. Does that matter for everyone? No, but this is how rich kids stay rich, by getting top paying jobs out of school. And kids of blue collar workers like me, get the bottom of the barrel jobs until we have enough working experience to move up. I’m finally making more than my rich friends in my late 30s but it took a long time.

My best friend is a Military retiree and has a Chapter 33 Post 911 GI Bill benefit that is paying for the daughter's college plus a monthly housing allowance, and also receives VA compensation as a 100% P&T that has a benefit of a Chapter 35 DEA for his son's college. Because of his service and sacrifice, his kids are taking advantage of his earned benefits. God Bless the USA.

I don’t know man, they are making $500,000 a year. Sounds like that fancy school was worth it.

No one cares where I went as an undergraduate. I went to Carnegie Mellon for graduate school. It was very expensive, but I learned a ton. High-paying companies recruit from there. It was worth every penny in tuition. The medical field isn't a very good comparison with business and government consulting jobs. There aren't standardized certification processes and your degree does serve as a proxy for it.

My two sons are in college right now. I have 40k for each in two 529's to fund their tuition. I'm cash flowing the rest of the expenses. My older son is almost done with a bachelors degree computer science, with a minor in business and my younger son is half way through his associates degree in chemistry.

500k income is actually 300k take home, after taxes and other deductions. So huge difference. So they need to think about options how to save for kids college and so forth. I would do custodial brokerage account instead of 529.

Horrible, horrible idea to even consider spending $800K on your child’s education. I spent about $30K on my bachelor’s degree 20 years ago and earn a very strong income as a Healthcare Executive. Please DONT waste your money on an elite school

Kind shocks me when you have callers that seem a little clueless about there capabilities and making 500k a year ??? Weird

Ken's sweater game is strong...

Better than sinking your $ into a 304.

This video made me even less impressed with "top tier colleges"

Lol funny thing is if your kid had a full scholarship you dont have to worry about any side of this because one the school will be free. And two your money will be worth it anywhere they go because they are actually smart and focused.

How about nationwide a permit on your license is due payable on your birthday amount and determined and we have a college fund colleges apply to, and if you’re on the payroll, they may even pay for upgrades expansion and certain percentage of that go to student loan forgiveness

Asking "did you ask your doctor to see their certificate" is a bit dishonest, yes we usually don't check a doctor's certification, but their employer does

1. They never provided an answer to her specific question. 2. They were rude and condescending. 3. They misspoke and said money goes into a 529 tax free (it is post tax although you may get state tax incentives). 4. They totally erred by saying you can take money out tax free if you get a scholarship (it is penalty free but you still pay taxes on gains). Good advice is hard to find these days, even from so called experts.

How do you not know how much you earn a year? She sounded like very unsure if 500k?

It matters in post graduate degrees. Undergraduate, yes, it probably doesn't matter. but MS and PhD, absolutely

Remember. You can also withdraw the monies you contributed (tax and penalty free) Example: If you contribute let's say $25k over the life of the 529. You can take back that $25k tax free, no penalties.

Actually, I always look up what schools doctors went to when looking for one. Schools and where their residency was. It matters to me because there are tons of mediocre doctors out there. It’s absolutely not true that college does not matter. There are many companies out there that won’t even look at you if you’re not a graduate of certain top tier schools. Sad, but a fact. Her husband (they sound young) has a job that pays $500K in part because he graduated from such school.

Every college student has to apply for financial aid and be very good so they’ll be sent out to every one who is registered to give financial aid to students $500 here $500 there There is a lot of financially out there that’s student are not even aware about this financially application we go to everybody

Not sure if this video was taken before this took place, but now if your child decides to not go to college or gets a scholarship, you can transfer the 529 into the child’s Roth IRA. Great deal!

If Ken doesn't care where his doctor went to school. Will he be OK if his doctor went to Hollywood Upstairs Medical College?

I wouldn't do these kind of plans. Just go through the community college and then state school route. Secure some scholarships and work on the side. No need to graduate with a big load of debt

Where did the two hosts go to school? Asked nobody 😂

There’s always a shortage of doctors whenever you go, so of course you don’t care where they trained, as long as they cure you. For some professions, the name brand does make a difference and make you stand out.

Can you please give your baby 800k when she grows up she will be much better off❤

Her college was $40k per year but now it costs $800k for 4 years. She seems pretty clueless

As a Harvard grad, I can tell you it ain’t worth it. I should’ve just gone to someplace below that level. It would’ve been a much better value. 4:40

Guys- I’m a doctor (trust me, MD and PhD and neurosurgeon). I’ve been asked ONCE in twenty years where I did my undergrad, maybe twice where I went to medical school, and not a single time during residency training. I was the smartest kid in my entire state, and got a full ride and they gave me a rental Lamborghini. IT IS POSSIBLE!

this is good advice.

They're missing the point that people follow the online calculators that in 18 years at 6% a year increase makes all colleges absurdly expensive.

If she could not figure this out by herself. I think that fancy school doesn't make you any smarter

To be fair she met her husband prob at top tier school and I bet he makes the lions share lol

I make $500,000/year and I have to pause to consider if I can cash flow my kids college tuition….. Is this lady playing with Monopoly money? How can you NOT cash flow college making that amount?

He asked if she thought the schools were worth it and was very dismissive even after finding out that they make $500k/year. Yes, it’s probably true that the average person will not benefit from going to an “elite” school, but it clearly worked for them. Most jobs probably don’t care where you went to school, but I would guess that it’s a leg in the door to some high paying jobs. In addition there is probably some preference at those high paying jobs when the other people at the company also went to that same school. If you just want a good paying job, it’s likely not needed. If you want a $500k+ job, it *might* make some difference. Maybe it’s more about making those connections than the actual education. Right or wrong, the host’s reaction was a little off-putting.

George, "Im confused. Where else would you put your kids college savings other than a 529". 🤔 odd response. Mom is asking about options! Mutual funds in the kid's names will pay for college and beyond. A 529 can Only be used for for college. Yeah it can be transferred to siblings (etc) but it can only be used for college. And these people making 500k/yr should have no problem cash flowing their kids college- making it a mute point.

I want to know if it’s better for me to select strictly a Custodial IRA or a 529 account.

“It goes in tax free” @ 5:50…….does it though? Thought it was like a ROTH after tax investment.

Your child is three and you’re already deciding what college she’s going to? Lol hate to burst your bubble, but as a father of a 23-year-old college isn’t always their first choice. He is not making more than most of my friends with four year degrees

Anyone arguing that fancy schools matter so much probably profit from your naivety

Just put it in a regular brokrage.

You cannot use 529 towards room and board from what I saw.

800k is about 550 too much for 4 years now - good grief!

thanks so much

Is it 100% confirmed you can withdraw the 529K funds tax free? I have one for my daughter and it’s been very clear from the start that if the funds aren’t used towards tuition, room and boarding, books, etc. there would be a hefty penalty when withdrawing!😳

They are late 20s/early 30s and made 500k combined, potentially will double that in the next 10 years. I’ll say going to expensive school paid off, no? Tell me one kid who graduated from Oklahoma can do that ?

Can I have my 8 minutes back. $500k household income?! Goh

Do you guys no longer recommend ESAs over 529?

My daughter turned 8 a few months ago. I have not started a 529 for her. Is it too late to get an account started and build some value for her? Thank you.

A drivers license is a privilege if you have drivers license cars necessity Should we $10 a month $120 a year due payable on it before your birthday to keep your license valid through over 24 million license drivers in California alone But this would nationwide and the money would go to college fund which colleges would apply to students were not apply to this college

33.9 I just inherited from my late father after a legal battle with my sister who was withholding it I live in NYC and the property is in Houston Texas? need y'all advice

Everyone forgets about the UTMA. Much more freedom to the child. What if they become a business guru? Maybe colleges aren't even around in the future. If you want real flexibility, UTMA. 529 has too many restrictions.

"top tier school" she doesn't know how much money she makes, can't figure out how to make things work to cash flow College with half a million coming in every year. Ya sorry, that "top tier" did nothing for you... My question is what does this person do with this level of intelligence to make that much money, sign me up!

What a good question. Say you want to put your dog into show competition training. The dog gets educated for potential income from the competitions. Maybe you could use 529 lol

I went to 800k school and I don’t what I’m doing. Someone wasted money

500k it doesn't matter what she does lol

These interviewers asking all the wrong questions holy crap

For most, college is a bad bet. Work in a few various fields, gain some life experiences, then decide if one should go to college. Stop pissing money on basket weaving with a minor in moral corruption. As a financial advisor it is a mistake to do the 529. Put it in your own IRA or 401.

800k?

These guys are all over the place. They are too focused on putting down the expensive school to even understand her question.

Top colleges are a waste of money. You can get a great 100hr a week job with it and 150k job. Congrats

If you're going to grad school, they care where you came from.

I always check what med school the doctors i go to went to, and where they did their residency.

Dude, Dave Ramsey just keeps finding new ways to piss me off. If it’s not judging somebody for their financial situation, it’s questioning somebody for this school. They chose to go to or doubting the effects of compound interest. This video is not about whether or not a 529 is worth it, and if it is, I’m not gonna watch that far into it. At the very least change the title to somethin like “ radio host ostracizes listener for going to a good college”

Hey, my dog is pretty smart!

He just mocked those people who went to name brand schools still calling into Dave Ramsey show. Really?