How to Fund Your Kiddo's College with Infinite Banking Concept

Greetings Parents and Future Parents,

Welcome to an article tailored to provide you with an effective solution on how to best support your children in becoming their ultimate selves. Our journey encompasses education, which often includes higher education, college, and beyond, depending on your children's passions and aspirations. If you find yourself with high schoolers and fall into the category of many American parents who believe the government will aid in covering their education expenses, it's time to dispel that myth and remove your head from the proverbial sand. Hope, as they say, is not a plan.

One day you’re witnessing your little one's first day of Pre-K, then suddenly you’re dropping them off at college, life's constants remain: time and change. Caught in the whirlwind of day-to-day responsibilities, from work to providing, we often neglect the optimal strategies for achieving our goals. If this scenario sounds familiar, consider yourself fortunate. Today, we unveil the most efficient way to support your family and future generations, stretching far beyond the next 18 years.

Let's start with the facts. According to the U.S. News annual survey, the average tuition for the 2022-2023 academic year ranged from $39,743 per annum for private colleges to $10,423 for public, in-state colleges—excluding room and board expenses. Barring unforeseen changes, the cost of education will likely continue its ascent. Have you ever wondered about the U.S. Government's most significant asset? According to author Robert Kiyosaki, it's student loan debt. As of the second quarter of 2023, U.S. student loan debt amounts are a staggering $1.77 trillion and continue to climb.

Now, let's delve into diverse approaches, weighing their pros and cons. Armed with this insight, you'll be equipped to make a well-informed decision regarding the optimal means of supporting your children's journey to becoming the finest adults and valuable contributors to society. There are several avenues to fund your children's college expenses: the 529 plan, eligible savings bonds, Coverdell Education Savings Account, Roth IRA, mutual fund investments, scholarships, student loans, home equity lines of credit, and the specially engineered Infinite Banking Policy. Let's delve deeper into the five most prevalent methods of financing college, along with their respective pros and cons.

1. The 529 Plan or Florida Prepaid:

A popular choice among parents, the 529 plan facilitates college tuition savings. These state-regulated plans come with individual intricacies.

Pros: Often tax-friendly, the account growth is tax-exempt, provided the funds are used for qualified expenses.

Cons: Limited usage and options. Changing beneficiaries in case the child doesn't attend college depends on state regulations. Unused funds incur federal and state income taxes along with a 10% penalty on earnings.

2. Investing in Mutual Funds:

While mutual funds offer unlimited investment potential, their flexibility may come at the cost of unfavorable outcomes when seeking specific educational results.

Pros: No investment limit. Funds aren't limited to educational purposes.

Cons: Capital gains entail annual income tax. Returns on investments aren't guaranteed.

3. Student Loans:

Students and parents sometimes resort to student loans for education expenses, either from federal programs or private lenders. Federal loans tend to offer more favorable terms and repayment options.

Pros: Immediate tuition funds. Access to potentially favorable federal loan terms.

Cons: Loan repayment with interest leads to possible student debt, limited grace period before loan repayment starts post-graduation. Some cases exhibit excessive student debt, such as a USC Dentist graduate with over $1 million in loans which he may never be able to fully repay.

4. Home Equity Loan:

For most Americans saving less than 5% of their income, tapping into a home equity line of credit could be both a risk and an opportunity.

Pros: Untapped home equity can serve as funds. Potentially lower interest rates compared to loans.

Cons: Risk of foreclosure when using the home as collateral.

5. Specially Engineered Cash-Rich Whole Life Policy:

Employing a cash-rich whole life policy to fund education is a strategy long favored by the wealthy. With the increased awareness of the Infinite Banking Concept, designing a policy to enrich your children's future might be the best-kept secret.

Pros: Money is guaranteed to grow with dividends and tax-free distribution. Accessible through loans against cash value. Does not impose specific use requirements. Offers flexibility in decisions, such as starting a business, pursuing a trade, attending college, or embarking on life adventures.

Cons: Requires planning, consistency, and persistence. May offer lower returns compared to market-linked investment vehicles, particularly during bear markets.

After examining these funding methods, which one appears to be the most optimal for your children's college journey? Which one gives you the most certainty and guarantees what you want to happen will happen and even comes with a cherry on top of your sundae? Ding Ding Ding, if you guessed a specially engineered, cash-rich permanent whole life insurance policy, you're right on the money. By integrating this strategy into your financial planning, you're ensuring college affordability and setting the stage for building lasting multi-generational wealth.

When’s the best time to plant a tree? 20 years ago. When’s the second best time? Today! Vision coupled with persistence, consistency, and a well thought out plan will give your children the best chance to succeed. Utilizing the Infinite Banking Concept approach offers you and your children the utmost assurance and adaptability. To explore how this path toward abundance can be initiated for your children's futures, click here.

Want to dive deeper into this topic? Check out our podcast on Navigating the Student Debt Maze ft. Rachel Katz: Apple / YouTube