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Should I Get An MBA To Find A Wealthy Husband Or Wife?

Updated: 04/07/2022 by Financial Samurai 54 Comments

Why bother working hard all your life for a chance at financial freedom if you don’t have to? Instead of directing all your energy to making more, saving more, and investing wisely, it might be a better use of your time to identify where the wealthy and the potentially wealthy hang out. Therefore, you get an MBA to find a wealthy husband or wife!

Let’s say you are sick of your 30 year old Super Motivated Boyfriend (SMB) because he’s more focused on his career than you. He cocked things up in his 20s by partying too much. He is now playing catch up if he ever wants to “be somebody” in today’s society. Meanwhile, here you are, a lovely 28-year-old woman who just wasted the past two years of your life on this commitment-phobe. What to do?

Go to the most prestigious business school possible of course! For example, my fellow MBA classmates from Berkeley all earn six figure salaries with seven figure net worths seven years out and Berkeley isn’t even in the top 5. Their ages range from 35-40 and all of them are also married.



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Should I Superfund A 529 Plan? Evaluating The Pros And Cons

Updated: 11/29/2021 by Financial Samurai 18 Comments

Are you wondering whether to superfund a 529 plan? My wife and I did for both our children. I’ll share with you are reasonings in this post.

A 529 plan is a good way to save and invest for your child’s education. The after-tax money you put into your child’s 529 plan gets to compound tax-free, just like a Roth IRA retirement account. Further, when you use the money to pay for qualified college education expenses like tuition and books, the money is not taxed.

Thanks to the 2017 Tax Cut And Jobs Act, $10,000 a year from the 529 plan can also be used to pay for grade school tuition as well. The added flexibility is nice for parents who are considering sending their kids to private school. Tuition can range from between $10,000 to $60,000 a year.

Should I Superfund A 529 Plan? The Pros And Cons

Normally, the maximum each parent is recommended contribute to a 529 plan is based on the maximum gift tax exclusion amount. This amount is $15,000 per parent per year in 2021 versus $10,000 in 1997. The maximum gift tax exclusion amount generally goes up by around $500 every 2-3 years.

Note, the gift tax exclusion amount increases to $16,000 in 2022. As a result, you can now superfund a 529 plan with $80,000 starting in 2022.

The $16,000 per year is not limited by parent. It is limited by person. In other words, if you get two sets of grandparents to also contribute $16,000 each, along with two parents, that’s six people who can contribute a total of $96,000 a year! If this happens, your child will become a 529 plan millionaire in no time.

Just note, if you give more than $16,000 in cash or assets (for example, stocks, land, a new car) in a year to any one person, you’re supposed to file a gift tax return. You don’t actually have to pay a gift tax since you’re still living. You’re also not going to be sent to prison, like the parents who were caught bribing university officials to help their children gain admission. So don’t worry.



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Roth IRA Or 529 Plan To Pay For College: Comparing The Pros And Cons

Updated: 02/07/2022 by Financial Samurai 58 Comments

One of the main questions that has come out of my 529 savings guide by age post is whether to contribute to a Roth IRA or a 529 plan. This is a great question I did not think about because contributing to a Roth IRA is not something I have ever done.

Fortunately or unfortunately, by the time I worked a full year in finance, I was no longer eligible to contribute to a Roth IRA due to the income limit requirement. Instead, I just focused on maxing out my 401(k) every year for the next 13 years until I left full-time work for good.

Partly due to my inability to contribute to a Roth IRA, I developed a negative bias towards the investment vehicle. It made no sense to me why the government would set arbitrary income limits for retirement savings when I believed everybody deserved to save efficiently for their future. Further, the article is a nice counterpoint to the 99% positive Roth IRA articles out there.

Now that I’m older, wiser, and have two children to consider, let’s take a look at the pros and cons of contributing to a 529 plan or a Roth IRA for college. I’ll also share some thoughts on which route is best for you.



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Recommended 529 Plan Amounts By Age: Careful Saving Too Much

Updated: 01/20/2022 by Financial Samurai 96 Comments

From a financial perspective, one of the best things to come out of the coronavirus-induced market meltdown is being able to contribute to your children’s 529 plans at lower index prices. Let us dig deep into the recommended 529 plan amounts by age.

The appropriate 529 plan amounts by age will help ensure that you accumulate enough to pay for your child’s college education comfortably. At the same time, the right 529 plan amount by age will also ensure that you don’t over-invest if you don’t want to.

Given parents are investing for an expense that might not occur for another 10-18 years, it’s easier to invest in a 529 plan during times of turmoil. You want to have the right about in a 529 plan by age so you don’t overfund or underfund the college savings account.

Investing In My Daughter’s 529 Plan

Originally, I had only planned to invest $15,000 into my daughter’s 529 plan in 2020 because I was nervous about the stock market after a 10-year bull run. However, once the stock market started selling off in February and March 2020, I decided to contribute more to her plan. See my 529 contributions below.

Recommended 529 Plan Amounts By Age
Contributed $30K in daughter’s 529 plan in March 2020

The stock market kept on tanking until I ran out of the maximum bullets allowed. By the end of March 2020, I had ended up superfunding $75,000 into my daughter’s 529 plan. After making a stock market bottom prediction in March 2020, I put my money where my mouth was and bought.

If I had contributed more, I would have violated the superfunding rule, which allows families to front-load five years worth of contributions ($75,000 per donor/$150,000 per couple) without having to file gift taxes, while protecting their lifetime gift and estate tax exemption.

Given the world felt like it was coming to an end in March 2020, my wife and I decided to have her dollar-cost-average into our daughter’s 529 plan by $15,000 a year for the next five years just in case the recovery takes years.

When the stock market began rebounding in April, so did both of our children’s 529 plans. Today, our son’s 529 plan account is only about twice as large, despite being 3X older.

This is when I began to wonder what is the appropriate 529 plan amounts by age. I was beginning to feel like we had over-contributed to our daughter’s 529 plan. However, thanks to the likely incessant rise in college tuition, continuing to contribute to a 529 savings plan makes sense.



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Public Or Private School? Paying $1 Million For Private Not Worth It

Updated: 12/06/2021 by Financial Samurai 155 Comments

There is a never-ending debate between going to public or private school.

Personally, I went to international private school while my parents were stationed abroad until I was 13. Then I went to public school for high school, college, and graduate school from my MBA. I found each type of school to have its pluses and minuses.

In this post, let’s objectively analyze the decision to attend public or private school using real tuition dollars. We’ll also talk about the opportunity cost of paying so much to go to private grade school and private college.



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Should I Go To Grad School? Get Rich Or Die Trying!

Updated: 07/15/2020 by Financial Samurai 25 Comments

You’ve got your undergraduate degree and now you’re debating if you should go to graduate school. I’ve been in your shoes. I too wondered should I go to grad school? It’s a big commitment. Tuition can get quite expensive, especially if you quit working full-time to go to graduate school. However, earning a graduate degree can boost your career and really increase your earnings potential.

I’ve decided to dedicate time this month on graduate schools, specifically the much loved and vilified graduate degree, the MBA. Let’s start off with a layup as to why getting your graduate degree is a good idea, if you want to make more money.

Go To Graduate School To Make More Money



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Everything Is Rational – The Answer To All Things Irrational

Updated: 08/23/2021 by Financial Samurai 48 Comments

Stop Complaining - Everything Is Rational

If you want to reduce your stress, it’s good to adopt the “everything is rational” mantra. Once you believe that everything is rational, you’ll stop getting so frustrated and angry at things. You’ll also stop being so jealous of other people’s success.

There’s a lot of messed up things in the world such as war, poverty, racism, corruption, and a pandemic. Some things we can try to explain, and some things we can’t. Always step up and fight for what is right and speak out against what is wrong.

However, if you constantly try to fight everything wrong, you will end up stressed and miserable. Pick your battles, such as speaking out against racism. And let other things that bother you, go.

Unless you are a “Karen,” here are some examples that shouldn’t concern you. You can’t change everyone, so don’t try.



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Why Preschool Is Worth Every Penny And More!

Updated: 08/21/2021 by Financial Samurai 69 Comments

The first day of preschool was tough. Not so much for our boy, but for my wife and me.

My immediate thought was, so this is where creativity comes to die. My wife and I spent three hours a day with him for the first week to help with the transitioning process.

During this time, I observed how other kids of varying developmental levels behaved. I saw kids having to wait their turn, listening to instruction, and trying to communicate with other 2.5-year-olds who weren’t good communicators.

As I thought about my negative reactions while soaking in the hot tub, I came to realize what I disliked about preschool was exactly what I disliked about work.



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The Importance Of Money And Status For Getting Into Private School

Updated: 08/15/2021 by Financial Samurai 50 Comments

If you have a baby or toddler or are planning to have a baby, this post is for you. I’ve been running an interesting, real-life, real-time experiment on how hard it is to get ahead if you have below-average money and little status.

In 2017, we ended up applying to three preschools that accepted toddlers as early as two for the 2019/2020 school year. We then applied to five more preschools between SF and Honolulu that accepted toddlers after three for 2020/2021. We didn’t know what we were doing so we decided to play it safe.

Private schools are always stressing diversity and inclusion. Unfortunately, diversity and inclusion are theoretical goals made difficult to achieve because they are stymied by deep-rooted admission practices such as legacy admissions, bribery, and quid-pro-quo legal donations.



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To MBA or Not To MBA: Deciding Whether Business School Is Worth It

Updated: 12/23/2019 by Financial Samurai 19 Comments

I remember the moment I got my college diploma, I swore I’d never go to school again. At the end of the day, we forget the majority of things we learn and who wants to do homework anyway?

All this changed when the Dotcom bubble exploded and I was left wondering whether I’d be the first person let go given I had recently joined my current job in 2001. Last in First Out, or LIFO as they say.

We had gone through 5 rounds of layoffs in 1.5 years, and I heard the 6th one was just right around the corner. As long as the firm would have me, I’d keep on working, but just in case, I needed a backup plan. I decided that surfing back home in Hawaii was not the proper backup plan so I came to a compromise and applied to the nearest part-time MBA program, which so happens to be ranked Top 10 in US News & World Report and the WSJ.

The program promised the rigors of the full-time program, with the same professors and international opportunities all within 3 years. Upon looking further into my company’s policies, they offered to pay for my MBA so long as I was in good standings. The MBA program was a hedge, just in case I was one of the casualties, as one could potentially transfer to the full time program once accepted.

The 6th round came and went, and I was still left standing. Unfortunately, the company tuition reimbursement policy was canceled just two weeks before my acceptance. I decided to join anyway b/c at the end of the day, the economy was still shaky, and I didn’t want my application time spent go to waste. What the heck I thought. Be grateful for the opportunity.

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