​[00:00:00] Years ago, I had a great client up in the DC area, and husband was a professor. She ended up staying at home, but they’d inherited some money. So they’d inherited some money from, from her side of the family. Parents were very successful investing in real estate, and unfortunately, had passed away in very quick succession, probably six or eight months of each other.

And so she inherited, you know, a decent sum of money. And it was awesome for them, right? They were able to live in DC in a way that they would not have been able to live otherwise. So, you know, they bought a, a nice house inside the district. Uh, not a fancy house, nothing crazy over the top or anything, but a nice house.

[00:01:00] Paid cash for it, and so didn’t have a mortgage, you know, did some minor up- um, upgrades and stuff to it. But again, nothing crazy, not extravagant. And went to meet with them from time to time, and we had, you know, lots of good conversations around, you know, their own financial independence, their own ability to live the life that they wanted to live with this new sum of money.

Their kids’, you know, education in DC, public school education in DC is kinda hit or miss, and so they ended up in private school. So all of those conversations, insurance, all that stuff, right? Really, really good conversations. Great planning discussions, uh, educated them a lot on investing and the ups and downs that come with it, right, the volatility and all those different things.

But I was there one, one week or one day, and she was like, “William, I’m, I’m worried.” And I was like, “What are you worried about?” She said, [00:02:00] “We haven’t saved anything for college.” And I kinda did the same thing I just did then, right, which is chuckle a little bit. And I said, “Well, wait a second. You’ve got more than a couple million dollars sitting in a brokerage account, and you can use it for anything you want to, right?

You can use it for, you know, um, to buy a new house. You can buy it to buy a vacation home. You can buy it for… You can use it for retirement. You can use it for college. You can use it for living expenses today, which you’re kinda doing already anyways, right? ‘Cause they’re using it to subsidize their, their life.

She said, “Yeah, but all my friends are saving to a 529 plan, so they’re saving for college.” I said, “That’s great,” but the reality is, is they’ve just… They’ve carved out that money. They’ve put it in a bucket, and that’s fine, but we don’t have to bucket our approaches, right? It’s a perfectly reasonable thing to do.

We get [00:03:00] tax-free growth and all the different things that come with it, and so a 529 plan can make sense in a lotta different ways, just like a 401plan can make sense or a Roth IRA can make sense. And so it was, um, it was humorous to me ’cause Americans are very conditioned on two things. One, what are the neighbors doing, right?

Keeping up with the Joneses. Well, if they’re putting money in a 529 plan, I should put money in a 529 plan. Um, and then filling the buckets, right? Like, I’ve gotta fill the buckets, right? I’ve gotta make sure I’ve got money in the 401. I’ve gotta make sure I’ve got money in the 529 plan. I’ve gotta make sure I’ve got the HSA account.

I’ve gotta make sure, like, all these things are getting checked. And sure, that’s a strategy, it’s… And, and it’s a good strategy in a lotta different instances. But just because you don’t have money in the buckets as they’re set up for you doesn’t mean that you’re not in a place where you can afford it.

It’s not in [00:04:00] a place where you haven’t saved for it. It just means you haven’t put it in a place that the government has encouraged you to put it into, and there are all kinds of reasons not to do it. Um, and there are all kinds of reasons to do it. Having the right strategy, the right plan, the right understanding in place is very crucial and critical.

So remember, next time you hear somebody saying, “I’ve got money here, I’ve got money here, I’ve got money here,” and you’ve only got money in your business or you’ve only got money here, don’t necessarily make that instant comparison. They’re doing their thing. You, um, you race your race, right? You be you, um, but know what you’re doing and how you’re doing it If you liked today’s video, hit the subscribe button down below, or better yet, just leave us a comment