We're just trying to give you a strategic way to take your wealth and expand it to help up your average, not only with your knowledge base, but with your wealth. And this seems to be a really cool and a fun way to take a portion of your wealth and expand it to things and places and ways that you never thought before.

Welcome to the Up Your Average podcast, where Keith and Doug give no nonsense advice to level up your life. So buckle up and listen closely to Up Your Average.

Good morning, Caleb.

Good morning.

It's a great day to be in Indianapolis or the Indiana Central Indiana area.

That's right.

You like a I I kept saying all week, I love snow. I'm not sure I appreciate the accumulation of it, though, but it was really beautiful earlier.

Yeah. That's for sure. It was coming down good for a

little bit. You don't look like you've got a standard dress code going on there. You look like you just came in off the street. Should we give you some food or something?

Let's go. I'm all good. I have Miracle on Ice T shirt to celebrate the winter Olympics.

I'm gonna give I think Doug gives movie recommendations. If you've got Netflix, they've got a new documentary about the Miracle on Ice team that I'd highly recommend. It's worth watching. It can stir your soul a little bit. It can I just like thinking that I can do things that people say I can't, and that team really, they beat everybody's expectations?

Yeah. Yeah. So well, that was I don't even remember when we took you there. How old were you when you got that t shirt?

It was on our Nova Scotia trip. So I was 16 or 17.

Nice. I wish I could wear shirts from when I was 16 or 17. That's a funny idea right there.

Yeah. Well It was probably 2019, maybe. 2019?

Okay. I I I literally was motivated when I watched that show to wanna go back to Lake Placid. It's such a such a cool little town. And this is just this is just an observation. It's not a judgment, just an observation.

There's a scene in there that all the people were celebrating in the streets of Lake Placid in 1980. And if you just observe it, body makeup is a lot different than if a bunch of people came out of a sporting event today. Just an observation. I'm not saying anything. It's just something that has evolved since 1980, which is kinda interesting.

Alright. So our original guest that we're gonna hang out today had a family tragedy happen, and so we're gonna postpone that. And I'm really looking forward to you guys getting to meet my friend and learn a little bit about how to live better and to up your average in in your work world and in your general wherever you have responsibilities, that's what we were gonna talk about. But today, we have a special idea, and Caleb cracked me up because he when I told him I needed him Not to sharing. When I told him I needed him to join today, he said he was waiting on my call yesterday, didn't you?

Is it Sharon?

Yep. It is.

Alright. So we couldn't think of a creative title, and we needed just a little bit of help to say generosity reimagined. And this is really a big deal. I think generosity is huge. For sure.

Yeah. Like, when you think about it in your own life, Caleb, where where have you seen seen generosity that kinda encouraged you? Or what have you done that's encouraged you with your own generosity?

I mean, I think just off the bat, just seeing how you and mom have been generous with other other people, whether that's giving or just giving your time and pouring into their lives. I think of when I think of generosity with time, I think Micah in helping me just woodworking, either as growing up and doing a project with him or find him doing my own woodworking, and I need help with a certain part of it or a tool to help with, and he's always there like, yeah. Come on.

I love that. I love it. Well, so as we kinda get into it, we have some creative ideas, and I was pondering life today. So you you hopefully, all of you have your estate plans set up. You've got if you're a young family, you've got your designation of guardians for your children so that there's no wondering what's gonna happen there.

If you're an older family, that you've got the distribution set up most efficiently along with power of attorney documents and things. But what I was thinking about with regards to the resources you have, I can only think of four ways that your wealth is used throughout life. So you either can consume it with your lifestyle. And so if you're a big consumer, then what happens is your wealth is consumed along the way, and it never shows up on your balance sheet. And that goes in kinda parallel with Doug's conversation about cash flow a couple weeks ago.

It's just however you choose. You can spend your wealth now or accumulate it, it's gonna, you're gonna consume a chunk of it. Then the other place that it goes is taxes. You just you're taxed.

Uncle Sam.

Not only uncle Sam, uncle they're putting toll roads everywhere. Like, I don't know how that's not double taxation. It felt like we paid for those roads to begin with, but we get to repay for them for whatever things that are going on. So taxes are gonna consume your wealth. And then destroyers destroyers of your wealth might be theft, it might it might be, you know, accidents.

It could be a variety of things that your wealth has just destroyed. Could have been this past week if you had precious metals or cryptocurrencies, and it's destroyed by volatility. And and that happens. I I sent you a screenshot I saw of a guy that had to sell his jet.

Oh, yeah.

Because his cryptocurrency went down more than he thought. So he so like his he he didn't he he wasn't trying to get rid of his jet. His his wealth forced it out, and that was a destroyer of wealth. And then the the final thing I think you can do with wealth is just give it to improve your world. And that fits in with one of our core beliefs at Gimbal is generosity wins.

And so this was a chart that I didn't really even talk through with you, Caleb, about thoughts that I have. I've got an article I wrote probably twenty five years ago called How Much Is Enough? And there's a temptation when we accumulate wealth that the slope has to just keep going up, and that you don't ever want to consume your wealth. And what I put here was just an example of somebody that started accumulating wealth at 20, and then the wealth that they accumulated, grew at either five or 7%, and instead of letting it just keep going up, is that at 65, they just made an intentional decision that I don't need to grow that anymore. And at that point, then you can flatten out your wealth, And how you flatten it out can be a variety of ways, but a way is giving.

Another way is you lower your rate of return. You can just say, I'm not taking any more risk and I'm going to have zero rate of return. I don't care what happens in the opportunity, but when you flatten it out, it intimidates, gets people's energy going. But it could be one of the coolest things you ever did. And one thing by giving could be, you could be transferring wealth to your family and building up family wealth instead of just your own particular wealth, like generational wealth.

Yeah. And that's how a lot of people over the years have really built multigenerational fortunes. Yeah. So that's what I thought we'd key in on this morning is the family generosity. Nothing against you guys and sharing wealth with you, but you know, as a beneficiary of family generosity, what do think about this idea?

I am all for it. As Yeah.

We were discussing it, there's some very creative things you can do. There's things you can do that can even multiply family wealth by the generosity you do. And so one thing to keep in mind that in 2026, there's a $19,000 annual gift exclusion per recipient. So if you were the recipient of my $19,000 I could give you $19,000 Connie could give you $19,000

38,000

And then if I wanted to give Judah $19,000 then Connie could give Judah, and now what are we up to? What did I say? 76,000? 76,000. And so you took that 19,000 and gave it a multiplier, right?

Yep. So that is kind of a thing to keep in mind. There's ways to even expand the family generosity with your total estate exemption, but we're just talking about the annual one here. So if you're feeling more generous to your family, there's more than this you can do. We're just taking it at a surface level here on how that might go.

And so one thing you could do is help with young families with their down payment if they're thinking of getting a house.

Yeah. And that's with the price of houses these days, and yeah. Just young people have all these different expenses, whether that's you got student loans, you have rent isn't cheap. If you're renting, that's pretty much a down payment every month. Just all these different expenses come in every which way.

So just any any little bit helps towards down payment or their living expenses.

One of the ideas I was thinking with the down payment concept is, yeah, there's a saying in leadership or in business, yesterday's perquisites or perks become tomorrow's expectations. And so if, you know, if I gave somebody a Christmas bonus, then they might believe that's going to happen every year. And so if you were going to give one of your loved ones money for a down payment to help them get in a house, you might have a conversation before you even maybe show them what you're gonna do is what kind of how much are you thinking on spending on a house? So I know I'm just picking a round number here, but I'm just saying 200,000, 10% of that's close to the 19,000. So if you could buy a house where you're at for $200,000 And we were having a conversation.

He said, yeah, dad, I think I'm gonna do a $200,000 house. You might wanna get that into the conversation before you tell them what you're thinking of doing, because most likely, if you're gonna give them that, say round up to 20,000, all of a sudden their house might go from 200 to $2.20, right? Yeah. And you really haven't accomplished anything because they're in the same place they would have been. And so, as you're thinking about maybe using wealth to help somebody with a down payment, you might have the conversation what they're thinking and then say, you know, we were thinking about maybe helping you, but we don't really want you to get more house because of this,

because it doesn't accomplish what you're trying to.

Yeah, exactly. And so what I know my tendency would be is like, Oh, I'm going to go get all these add ons. And still I have the financial burden on my shoulders that really I think that parents, a lot of times, try to help. Holiday gifts and birthday gifts are just a way that you can help with your family members, and that can be creative. Travels and meals, I know for us at this season, that's been a thing that we've tried to do, is when we can travel as a family, it gives us kind of a soulish gift to have time with you all.

No. And it's the gift not only of that to you, but it reduces kind of the cost of that when we help cover a lot of that. Yeah. And then the one that we really want to spend time on is education assistance. I have evolved in my thought about even what that thinks.

I know for sure with Caitlin, I tried to discourage her from going to college, and that was a long time ago. Not a real long time, Caitlin, but just a long time ago. And my thought was the math of a college degree doesn't look anything at all like it did back in 1979 when I went to college. And so just to assume that somebody should go to college is not in my thought process at all.

Yeah. And I think another aspect of that is where you go to college. Because Murray State, the prestigious Murray State, it's

shoes out. How you guys do it now?

Shoes up. You can get a degree for a lot cheaper there. They offer a lot of scholarships than maybe I don't know what IU or Purdue looks like, but definitely compared to like a state or a private college. So there might be some schools that make more sense than others, but, yeah, definitely a lot pricier than it used to be.

And for sure, if you're thinking about, say, a private institution, you really need to think through what your degree is. Like if you're going to a private institution and trying to get a degree that may not replace the cost of that, there's some I mean, the family wealth could help with that, but it sure is more and more difficult to get kind of a job that may not be a high paying job from a private institution these days than it was years ago. So when we're thinking about education assistance, there's some clever and creative ideas, and I call them five twenty nine magical accounts. And a 529 is a college savings account, but it's it's probably called something else now because it's not limited to college anymore. Right?

Yeah. There is a lot more. I think with One Big Beautiful Act last year, they opened it up to a lot more post secondary school. Let's see. It's now, I think, open up to trade schools, apprenticeships, and you can do other career oriented credentials, whether that's vocational schools or professional licenses anywhere.

It sounds like if you get training for job purposes, sounds like you can use it for that as well. Yeah. And we

wanna give a shout out to our friend Steve Haynes, who who runs the local Del Carnegie organization that, from what we discovered, it looks like a Del Carnegie class would be a qualified expense. Yeah. And for me personally, I would advocate if I had a senior in high school, I would advocate them taking the Carnegie course before they go to college. I think it will just make their experience more profitable for them. And so to think of the ways that you can spend the money in the five twenty nine is pretty phenomenal now.

Yeah. And so when we call them magical accounts, it's that you need to be creative when you think about the 529s in a lot of different ways, wouldn't you say?

For sure. Yeah, we've looked at a bunch of different ways to use these accounts, and one way is you can do up to, I think, 35,000 in Roth IRA contributions within your lifetime. So if you had excess $5.29 after going to college, then you can start funding your Roth IRA without having to go out of your pocket pockets and pay from there. And I think we were discussing this morning that there's a way to get more than the Indiana has a 20% state credit, up to 7,500, and I don't know if you wanted to talk about it, how we thought you could get a little

bit more than that 1,500 back. Right. So what Caleb was saying is that if you have, you don't even have to go to college, right, to get the Roth conversion benefit, and that's a big deal. If you want to help out future generations, and you have excess wealth or excess cash flow, and you fund a five twenty nine, say child is 40, and you say, Why would I put money in a five twenty nine? It's because you can, as long as that account is open fifteen years, and the money's been in there at least five years, they can take that $35,000 and convert it to Roth IRA.

Yep, up to the annual IRA contribution limit?

Yeah, so if they were that's is that 7,500 this year? That sounds right. Yeah, and so if they were 50, say you started it for your 40 year old, and they're 55, that hits a fifteen year, then they can also do the fact, they can do the Roth conversion, because they're over age 50, they get an extra $1,000 or so to put in there.

Yeah, and I think a big thing about this would be if your state has a credit of some sort. I know Indiana does, but there are other states that don't have these credits, so it might not make as much of a sense.

Yeah. So suppose I put $7,500 into five 29s in 2026 for, I would split it 1,500 for each of you kids. I know you're here, and you got, you know, you get paid, hey, dad, why don't you put 2,000 in mine or something? But for the 7,500, I get 20% of that back. Yeah.

Just right off of my Indiana state income taxes. So when you think about that, then if we fund the kids, the adult kids' five twenty nines, and we get that built up to 35,000 for all of you over time, then you guys have the flexibility of that $35,000 that you can fund your Roth IRA, you can go take the Dale Kearney course with that money, right? Yeah. And you can change the beneficiary. Suppose you had a kid, that beneficiary can be changed to help fund your kid's college.

And I assume, like if you didn't need it to fund your Roth IRAs, I assume if the rules stayed to change the same, it could fund one of my grandkids. I would think so. Yeah. Roth IRAs, which is just really crazy. Again, we I put it on one of the slides.

We don't we don't set up five twenty nine's because we're an RIA, and we I don't think we have a RIA version because they're usually run by the states, but we can coach you through it. The Indiana five twenty nine has a direct plan that you can go online, and and you've done that for me, Caleb. You've gone online and set those up. And so it's it's pretty intuitive, I think.

Yeah. It's pretty straightforward. I think you just if you don't have an account, you go on the website, click enroll, put in your information, the beneficiary's information, and how you want to pay for it, and it's set up.

So this was the idea. I was, if I had this money, this was the idea that I threw out to you. So that if I gifted, of my 19,000 that I told you earlier, if I gifted each of my children $7,500 then they would each get 20% of that, right?

Yeah. So on top of the 1,500 that you would be funding for mine, I could fund the 7,500.

Into the same Yep. $5.29 And so if I gifted this 7,500 to the kids, they would each they're all well, no, Kristen, when she lives in Phoenix, for the ones that live in Indiana, they would get a 20% tax credit for taking the $7,500 dad gifted them, and then they put it into their $529 They would get $1,500 back. Yeah. Just right off the top. And and suppose all five of mine lived in Indiana, they all five chose to do that, the $7,500 gift, then that's what $7,500 of tax credit wealth that our family has accumulated.

Plus the 1,500 from you.

So the total family wealth gain by using this strategy is $9,000 which is, I don't know, I haven't heard anybody really talking about this. It's a little bit of a hassle. It's not a huge part of your wealth, but for your next generations, it could be a really huge part of their wealth. Like with that chart that I showed you, your wealth kind of growing over time, it starts very miniscule when you're Caleb's age or somebody that's 20 years old or something like that. And so the 05/29 offers huge opportunities for people to do really cool things.

If you live in Indiana, you definitely want to take advantage of that credit. And to kind of jump into the idea, say you're Caleb's age, and you're thinking, I don't need a five twenty nine anymore in college, right? So tell our friends a little bit about the course you did last November.

The master trading program?

Yes. Like, what did that cost?

I think it was 4 or $5.

Okay.

And it was a 2 it was a course over two weekends, Saturday and Sunday each weekend, and it was about seven hours a day, plus two or three hours of q and a afterwards. So you can it was super it took a lot of brainpower to go through, but I think it was well worth it. But that was, say, $5 and two weekends.

Was that an academic kind of class?

Yeah. It held for Was it practical? Oh, it was practical. But it

Was it with a college professor or who was?

It was a world class investor, Mark Minervini. So learning from one of the best that's traded in the stock market over the last forty years, and it helped me personally and for client client money as well, just understanding the market better. So it it would check a box for, like, career oriented training credentials.

Yeah. So if somebody lived in Indiana I'm not I can't speak

to other states because I don't know all their rules. But if they lived in Indiana, say you're 70 years old and you want to take this course, if you put the $5,000 in your 529 account at 70 years old and you want to take this $5,000 course, you're gonna get a thousand dollars back on your state taxes. You take the 5,000 off, send it to the program, and you just essentially cut the cost of that course by 20%. And and so to think of a $5.29 is only benefiting somebody that's in their, you know, teenage years, it's not true. If there's courses, there's things you wanna learn about, and you are still wanting to learn, if you're 30, 40, 50, 60, 70, 80, whatever, the five twenty nine in Indiana is gonna give you a 20% discount on whatever course you want to do.

We've got a number of our friends that have done the Master Gardener course at Purdue, and it could be anything. It could be I mean, you read through the rules, you could pretty much qualify almost any kind of training in there, couldn't

Yeah. I guess you wanted to go back and learn how to weld, you could do that. You can yeah.

There's Would a woodworking course qualify, you think? I would think so. That's a trade. Yeah. Yeah.

Know some of our friends go down to this I can't remember the guy's name in Franklin, Indiana, but he's a world class teacher of woodworking down there. And so if they were gonna do that, they could put the money in there, take it right back out. And so it's a really creative, it's a really thoughtful way to do things. But the magic of the $5.29 is it's a reasonable way to take your wealth and to spread it to future generations to really build up your own bloodline, or your friends, or your family, or whoever you want to celebrate. And we do not get compensated for doing 529s.

We're just trying to give you a strategic way to take your wealth and expand it, to help up your average, not only with your knowledge base, but with your wealth. And this seems to be a really cool and a fun way to take a portion of your wealth and expand it to things and places and ways that you never thought before.

Yeah. World of opportunity.

Well, we appreciate you guys hanging out with us this morning, and you're a big deal to us and anything we can do to cheer you on. If you haven't thought about a 529 in this way, give us a call, and we can talk you through the process and cheer you on. And in the meantime, you guys have a magnificent weekend.