Littlejohn Financial

Future College Tuition Today

Financial Podcast by Financial Advisors

Today’s show provides quick, practical advice to help parents save for their child’s college tuition. Learn tips, strategies, and insights from experts to make college savings simple and effective. Start securing your child’s academic future now!


Episode Highlights:

  • The often overlooked expenses of college education such as room and board and strategies for managing them.
  • Non monetary benefits of a college education, including life lessons and independence.
  • Importance of early financial planning for college and the diverse paths available post high school such as entering the workforce or further education.
  • Strategic major selection and how personal readiness and life goals can influence education and career paths.
  • Critical role of financial literacy in a successful future and how writing skills are important in explaining complex concepts.
  • Insights into 529 plans and Roth IRAs including recent legislative enhancements and their impact on educational savings.


Looking for Personal Financial Advice? – Learn More Here





00:00:00 Find something that you can be interested in and it will greatly increase your chances. What was I interested in? Marketing. So I ended up in the creative advertising channel, which was a journalism degree, not a business degree. Like the business advertising is all about numbers and media buying, which was like a giant yawn to me. Media buying, how interesting is that? Let’s go figure out where the target demographic lives and how much we have to pay to reach them. Yawn, right? But Super Bowl ads? Those were awesome. Right? Maybe you disagree, but I thought that was awesome. So that’s how my career path found me, or how my education path found me. 


00:00:00 All right, that is the cue. We got our music playing, our favorite music said nobody ever. Welcome to the True Wealth Radio Show on this, the greatest Tuesday you’ve had all week. I’m your host, Dave Littlejohn. In studio with me today? 


00:00:57 Matt Dickson. 


00:00:58 And also a special guest. It’ll all make sense in a minute. Thank you for joining me. 


00:01:03 Knut Torvik. 


00:01:04 All right. So Knut, first of all, I’ve known you for a long time. You have, it’s, you have the advantage, something I don’t. You know what this is besides your striking good looks? That’s the word, it’s radio, right? You have kids that are in or nearly through the college system. 


00:01:26 That is right. I have a daughter who’s just… will graduate from [U of O] now in about four weeks, and I have a daughter who’s gonna start in September. 


00:01:36 Okay, so you’ve got one who’s about to finish, one who’s about to start. And I’m gonna be super selfish on the show today because this is my chance to ask, normally we’re like, we give a lot of advice on the show. That’s kind of the deal. But I’m gonna be asking Knut for advice today because here’s a guy that’s paved the road before me and we’re gonna be talking. So for everybody listening today, we’re getting close to graduation season. And so this… today is all about education. We’re gonna be talking about the cost of education, how we pay for education, what is the value of education, not necessarily the same as cost, or maybe we’re measuring it with different terms. And so I hope you’ll stick around and listen today because there’s a lot going on. But first, right out of the gate, Knut, now that you’ve launched one, or you’ve already launched one, you’re about to launch the next one, all right, is there anything that you would say, I learned, I did not expect this in the process? Or is something you learn that you’re, like everybody should watch out for this? 


00:02:43 Well the biggest shock is the cost. We always talk about how expensive college is, but one thing I didn’t really consider was the cost of room and board, how expensive that is. 


00:02:56 Okay. 


00:02:57 And even if, you know, at the University of Oregon, the kids have to stay on call, on campus for the first year. She did that now, she’s moved out. And I had no idea how expensive housing was around there. 


00:03:12 Right, just the either on or near campus housing options. Yeah, it’s definitely a premium. 


00:03:20 And also how they force you to sign and lease that goes from September to September. Well, of course, she’s going to finish up in June and we still have to pay her lease for another two and a half months. 


00:03:33 Oh, that’s delightful. 


00:03:35 It is. Nice housing option. But basically it’s looking, glorified campus housing. It’s not that nice. 


00:03:46 Now did she live on campus, like on campus housing itself for the freshman year? 


00:03:52 She actually did. She actually lived for two years because the first year, she was there. She, you know, this was during the COVID and all that. She started in 2020. 


00:04:01 Ah, okay. 


00:04:02 And they were hardly ever, hardly any kids on campus. So my wife and I, we felt that the whole college experience is to live on campus in a dorm, eat in the lunchroom, and be surrounded with lots of kids. And so we actually made her live on campus also in her sophomore year. Just so she can get that experience. 


00:04:24 Really soak it in. 


00:04:26 Yeah, indeed. 


00:04:27 Well, this will come up later too. I’m sure we’ll get a chance to talk about… Mark Twain has one of my favorite quotes of all time. He said, “Don’t let your schooling get in the way of your education.” I think there’s something to be said for, just listen to that closely, is the classroom education matters, but there’s more to certainly the university experience than just the classroom. So there’s a lot of growing up and a lot of learning that happens there. Let’s talk for a minute about… since this is something that’s also near and dear to my heart, because I want to try to address this for lots of different students. So for the high schooler that’s figuring out the next stage, you got a few options. I think that the primary courses are going to the workforce, and in the workforce, that’s pretty broad, lots of different types of work. Or there’s, go to some kind of university, some kind of, we’ll call it a junior college or a community college level or some kind of trade school. Can we think of others? Did I cover the spectrum on those? 


00:05:39 I think that’s pretty good. 


00:05:40 Okay. So Matt, is somebody that was a, you know, a recovering high school teacher. 


00:05:45 Mm-hmm, right.


00:05:47 When you saw and did you teach, I mean, the high school, you had like all the years, right? So you had seniors and the whole mix.


00:05:53 Right, yeah, I started in the middle school, taught that for four years and then spent four years at high school teaching freshmen through seniors. 


00:06:01 Okay, so as you see seniors and they are starting to launch, what were some of the things that you saw in seniors making decisions or maybe not making decisions and how they were trying to weigh those? 


00:06:13 I think one of the biggest pieces is, no matter who you really are, you’re overwhelmed. This is a big next step, right? Most of the time you’re leaving town, you’re going to a new place, you’re doing an entirely new type of education system. This isn’t high school where everyone kinda holds your hand and walks you through it. You get to a university and you can kinda feel like you don’t have someone necessarily in your corner or in your back pocket. And so I think kids knew that. And so the one universal thing that I think I saw was everyone was just really nervous about that next step. 


00:06:49 Yeah, well, and the next step, it’s an interesting one depending on where you are too because, I’m not sure everybody knows what the next step is. They just know that the last step was high school and that step’s over. 


00:06:59 Right. 


00:06:59 Now what? 


00:07:00 Exactly. 


00:07:01 Right. 


00:07:02 They don’t really know what the future holds for them. 


00:07:04 Yeah. Knut, how did your family decide on the university experience? 


00:07:11 Well, you know, both of my wife and I are college graduates and we, it’s more than just you know, getting an education. It’s also about developing yourself as a human being. I’m not saying that if you go to a trade school, it’s a bad thing, but for us, it was never really an option. We never wanted that. And I’m sure we also influenced our daughters to think the same way. I think we sat down and told them that, you will go to college or else. It just happened. 


00:07:45 Yeah, it just sort of implied in all the things that were going on. I’ll admit that there’s a bias to that in my household. It’s something that I am awakening to the concept though, of… and this is just for full disclosure, everybody listening, right? I do serve on the Board of Education for the community college here in town. So if you’re listening or watching on YouTube and it’s out of area, we have Umpqua Community College, right? It’s actually this cool community college, beautiful campus, lot of cool stuff going on. And I think my original impression of the college experience versus community college, it was that community college is where you went if you couldn’t go to the university. 

That was what I thought as a high school student. I no longer think that. I actually think community college is a very viable option. It’s a great way to get missing credits that kind of puts you into the right timing for the college ecosystem if you can coordinate that. And so I’m a much bigger advocate, plus community college serves everybody, right? So it’s, I don’t want you to just think that this is a program exclusively about the high school kids that are about to graduate and figure out where to go. You may be looking for new career skills. You may be somewhere else trying to assess the value of education. That’s very relevant, right? So I think it’s very, very relevant that you consider what your local community college can offer if you need to develop skills that are needed in the workplace, right? 

And also, I think because I’ve been on university campuses and I’ve been on the community campus at Umpqua, UCC. It’s… the experience on campus isn’t all that dissimilar, right? You know, you’re going to a dedicated place of education. You’ve got a campus where there’s not a lot of other things but education going on. It feels like that’s its dedicated purpose. The big deal though is there’s no on-campus housing. And I think there’s a, that is a really big differentiator in terms of the college experience. And very interestingly enough, something that UCC is starting to develop student housing now. So I think that the lines are getting blurred between the university experience and the community college experience in real time. 

I think that’s very relevant for a lot of our seniors out there in high school because sometimes cost is a barrier. If you think about the cost of college, I think that’s something really important. I’d like to maybe spend a little more time on that, but I also think, I’m looking at the clock right now, and this might be a very, very appropriate place for us to take our first obscene profit break. So, why don’t we do that? When we come back, then we can talk about, well, speaking of obscene profits, how are these colleges, you know, how are we going to afford them? Or what education about them, what might that cost? But we got to take this break. So stick around, we’ll be right back. 

All right, gang, welcome back to The True Wealth Radio Show. I’m your host, Dave Littlejohn, and in studio with me today is… 


00:10:32 Matt Dickson. 


00:10:33 And…


00:10:33 Knut Torvik. 


00:10:34 Right, and a reminder, if you were just joining us, you can grab the podcast, we’ll also be streaming on YouTube later. But go to and you can find it under the Educate section of the website or some resources for folks. And so if you just want to learn more about what we’re doing, you can check out their podcasts out. This one is, we’re talking about education today. And during the break, we started to kind of, down this path. Matt, I want to pick something up that you mentioned, right? And I promise we’re going to get to the concept of, cost of college. We said, you know, when we’re going, in the break, hey, let’s talk about cost. This was so relevant, Matt, that I just wanted to say it. Talking about what you said, you think the norm is. 


00:11:15 Yeah, I think the norm for most people that are going into college, they might have parents who say to them, oh, well, okay, you wanna go in, we’ll try and help you out a little bit. And then a lot of parents, I think, are like, well, I don’t know, college, are you sure that’s kind of the route you wanna go? And so you’re not always necessarily met with a lot of optimism or it’s not always well received where you would think it might be. 


00:11:43 Yeah, it’s hard for me to know what the norm is. I only know my own household and my experience. So I don’t know how, if a household says college is stupid, right? Like why would you do that? Or it’s, you know, college is just too expensive. It’s just not an option. I don’t really know what that looks like. I know in our household, it was something that early on, like when my kids were born, we started saving a little bit on the side to help them go to school. 


00:12:10 It’s also about giving the kids an opportunity to spread the wings of it. You know, I think, you know, it’s not just the education. It’s also about, you know, moving away from home. For many kids, it’s the first time they are away from mom and dad. They get to experience that close to watch themselves. You have to clean your room. Mom and dad can’t do that anymore. 


00:12:36 Not everybody does that, you know. Seats of college students, where’s the floor? 


00:12:41 It’s an important life lesson. And I think that’s kind of, you know, when you’re 18, 19, those things are very important for you to experience and to develop and know how to handle. 


00:12:53 Yeah, and I couldn’t agree more. I think that, I think there’s a lot of growth that happens when you start to get out from underneath your parents’ household. It’s a really critical time for folks because that launch, you’ve had, and it’s interesting, I had some clients yesterday, we had this comment about some folks end up duplicating what their parents did. And some folks do the exact opposite of what their parents did. The question is why? Right? And I’ve seen scenarios of parents that we would say, at least from the assessment of, hey, how was the financial success and how well did you navigate the landscape, right? They struggle with making what most people would say, common sense decisions, right? Like that’s a lot of bad decisions. It’s creating a lot of turmoil and hardship in your life. And the kid says, you know, I’m gonna do whatever that isn’t, right? They see it and they just know better. They don’t wanna do that. They said, that’s the example I will not follow. And then some people, that’s the example they follow. I don’t know what makes it go one way or the other? 


00:13:58 I think it all just comes down to your personality type. And I’ve seen so many students over the years and you get an absolute mixed bag. You got the kid that’s coming from just immense poverty. They’ve never been read to, no one helped them with math. And you’re like, this kid, you know, you might have a preconceived notion. There’s just no chance. But they fight so hard and they’re so resilient and they put in so much effort that they overcome all of it and they go on to do great things. And then you see the opposite end of that spectrum too, where it’s like, you were handed everything, everything in the book, but you were lazy and you had no motivation and you squandered everything and you’re not going anywhere. And so it’s a very, very wide spectrum. 


00:14:43 And here’s one thing that you can’t predict or even as a parent, how you can fix is the student’s motivation. 


00:14:51 No, you can’t. 


00:14:52 And it all depends, you know, that’s the same thing if you’re in a trade school, if you’re in college, if you’re in community college, it all depends. I just know for myself. And I was a total underachiever in high school. I did not do well there at all. I just… I had all the other interests. And I did really wake up, I always knew that I wanted to go to college, but I just didn’t really think through it, how I would do that. And I know that if I had started college immediately after high school, I would have failed miserably because I was just not motivated. So it took me a couple of years before I actually started college. I didn’t start college until I was, age 21. 


00:15:35 So there’s an interesting one. Again, this is something that kind of came out of the break. You mentioned the idea of, should students coming out of high school, do you think that they should take a time gap before they go on? And I know that there’s a spectrum. I probably answered some should, some shouldn’t. How do you, I mean, I’m putting on a parent half a second. So how would you offer advice to somebody trying to make that decision? 


00:16:03 Well, my oldest daughter, she wanted to go to college immediately. So she should…  did. The youngest was accepted into college. And then she came to us and says, I think I need a gap year just to kind of collect myself after having gone through, you know, high school and all that. So she actually, over the last year, she hasn’t done, she’s just been taking a couple of classes that he used to see. She’s been working at a… at an office and just been playing. I mean, right now she’s in Denmark for God’s sakes. So.


00:16:38 Yeah. Well, when you say it that way, it sounds bad. 


00:16:43 I think, and she also told us that, you know, for her to go… gone from high school to the university would not have been a successful thing. And we said, okay, you can do what you want. 


00:16:57 Yeah, there’s this theory that if you have a break, the probability that you return to school, I don’t think it’s actually statistics. I’m kind of quoting the statistics that I don’t know, right? So, but anecdotally, yeah, the risk that you don’t get back in the system certainly increases if you get out of the system. I don’t know how well that aligns with the idea that some people get in when they’re not ready and then they just sort of squander an opportunity and they fail their way out. And then for them to go back, they start to rebuild a damaged transcript, if you will. 


00:17:34 But I think it all depends on what is the student’s goals, do they have goals? 


00:17:38 Sure. 


00:17:39 And I think I knew that I always had a goal to do this. So even if I took a couple years break between high school and college, I was fine because I knew what I wanted to do. 


00:17:53 Right. 


00:17:53 I just wasn’t sure when I wanted to do it. 


00:17:56 So I think that’s very important. So I’m gonna kind of, let’s frame this up if we can get some, like actual advice for our listeners and viewers. I have a theory about how to select a major, but before you can get to a major, I think you have to make that decision about, is education the next step for me? Right, and what type, but so. 


00:18:14 Yeah.


00:18:15 So I think the first question is, do I want to go to the next level of education? 


00:18:22 I think another question in there is, are you capable? Because let’s be realistic, some people are not cut out for college. They’re just not. That’s kind of a hard thing you have to–


00:18:34 Isn’t that a rough thing to say? Because my sense is that you want to believe, anybody can try hard enough. I don’t think we all get the same skills and I think that’s a good thing. 


00:18:45 Right. 


00:18:46 Right. And so I think I know what you’re saying. I don’t think this is a qualitative measurement of like, well, you’re a good or bad person because of whether or not you’re capable, you know, cut out for university. I think it’s more a question of like, you know, is this your wiring, your nature and what you want to do? 


00:19:02 I mean, there’s some students that I had that their attention for reading lasted 15 to 20 seconds max. And it made them angry and they just hated just even looking at a book. I’m like, if you can’t be in a book for 20 seconds, college isn’t for you. 


00:19:18 Right. 


00:19:18 But I also think that some kids in high school or even before that, they’re not forced to make a plan, what they want to do with their lives. They’re just going to go along and don’t really have a plan for what they actually want to do. I think most kids, if they are forced at a fairly young age to decide what they want to do with their lives. That actually helps. And that’s it. I think this is in contrast to what most people here do, I think. But I think I knew very early on what I wanted to do. But I just didn’t know when I wanted to do it. 


00:19:54 And so here’s the thing that’s really ironic about that. Just for this conversation, I did not. When I was really encouraged and sort of funneled into school at the next level. I was capable enough that I survived my own sort of bad behavior and discovery process before I got focused, but it wasn’t until about two years in and I’d done a little bit of academic damage. That’s a really nice way of saying I let my grades slide because I wasn’t focused on what I was doing. So I screwed around too much my first couple of years and then got some traction when I matured enough to start citing in, at what I was interested in. And so that gap here may have benefited me. 


00:20:37 But you chose journalism, correct? 


00:20:39 Well, you know–


00:20:40 Or marketing, or what? 


00:20:41 Well, in a very backwards way, yes. I would say journalism kind of chose me. It’s not that I wanted journalism, but here’s, I’m gonna share this funny theory I have. Like this is the theory of how to select a major, which means we’re hopping over the question. 


00:20:54 Is it, put them all on a wall and throw a dart? 


00:20:57 No, no, no, it’s not that at all. It is, so when I was doing this, this is how long ago it was, you could get a physical course catalog. I think it’s harder to do that now, but what I did was I got a physical course catalog at where I went to school and I went to the University of North Carolina, okay? So go Heels. And I, you pull out a highlighter and you just start reading and any class that sounds interesting I’d highlight it, okay? And so I ended up with, you know, maybe 20, 25% of the classes seemed interesting enough. Yeah, I might go and learn that. That seems kind of novel. Some stuff seemed horrible, right? Like, why would I want to do that? That sounds like the worst thing ever. So highlight the things that made sense and then you put the thing down and walk away from it for two or three days. And then I came back and I opened it again and said, read this again and cross out anything on that list that doesn’t seem really interesting that I want to go to. 

Not just like would be tolerable, but like I want to go to it. And my rule was really simple. Like if you were to follow this pathway and you crossed off everything, join the Peace Corps. Do something else. Take a gap year. Get out. You are not going to be focused. You’re going to be resentful that you’re there. You need to do something else besides waste your resources. Okay? But if there’s stuff left on that list, you cross-reference that list with the majors that are available. Okay, and whichever major has the most of those on it, that’s the one you select because you’ll have the highest probability of maintaining interest. And for most people, the first, your bachelor’s degree is either the thing you’ll get that validates that you can learn to an employer, or it opens the door to the next level of education. And you want the best grades possible, and you want your college experience to be able to keep doors open rather than close them. 

And to me, the only way you could do that is you better like what you’re learning. Now, if you’re the kind of person that’s so disciplined that you could just slog through anything because you’re just full of nothing but piss and vinegar, and you’re going to do it, right? Fine. Just pick the major that’s hard and get through it. It’s something like, you want to go study organic chemistry because you just like pain. Do it. Some people probably love it, right? Like, they’re like organic chemistry is so interesting. It wasn’t for me. Right. But you follow my logic, right? It’s like, find something that you can be interested in and it will greatly increase your chances. So what was I interested in? Marketing. So I ended up in the creative advertising channel, which was a journalism degree, not a business degree. Like the business advertising is all about numbers and media buying, which was like a giant yawn to me. 

Media buying, how interesting is that? Let’s go figure out where the target demographic lives and how much we have to pay to reach them. Yawn, right? But Super Bowl ads? Those were awesome, right? Maybe you disagree, but I thought that was awesome. So that’s how my career path found me, or how my education path found me. Chronically, numbers, right? They live in numbers. Just like, how do you think journalism and finance, how did that happen? Oh, I used the journalism way more than the finance, or way more than the, like, I can use a calculator all day long, but you gotta explain why it works to your customers. Journalism is super valuable in this field. It’s just counterintuitive. So we taught gap year, right? If you can’t select something, I just take a gap year or–


00:24:23 Well, it’s not for everybody, but for some it is. 


00:24:25 Right. And so–


00:24:27 Some people need this structure in a university or an educational setting. All of these people are fine to use as a way to, you know, develop themselves. 


00:24:39 Here’s a weird one for you. I’m going to set this up in the worst way possible too. I’m going to let engineers, now we’re gonna, we need to go to break, right? And I’m gonna tease everybody listening when we do this. All right, welcome back to the True Wealth Radio Show where I don’t even know we could talk about what we were talking about during the break. 


00:24:56 All the stuff you missed, yeah. 


00:24:59 So anyway, welcome back. I’m Dave Littlejohn. In studio today.


00:25:03 Matt Dickson. 


00:25:04 Knut Torvik.


00:25:05 And we’re talking about education and I think it’s, we’ve talked a lot about the university system. I’ll admit from, as far as the trade schools go, I don’t know a ton about them, having not gone into them. I know that there is a pathway where you go and literally get trained and then you get into, like oftentimes an apprenticeship role and you start learning by doing. 


00:25:27 I don’t know much about trade schools either, but I will tell you having done both community college and the university route. For me, the community college, like the degree of education, the rigor, like how hard is that? The community college, hands down, was a lot more difficult than the university setting. 


00:25:45 That’s interesting to me. 


00:25:46 It wasn’t even close, yeah. No, you even look at my GPA. I mean, granted, you know, it was high at both places, but to get A’s at the university, just fall off a log easy. Hardly had to do anything. But at the community college, and I went to UCC, it was tough. The teachers there really demanded a lot, and I put in a lot more hours on homework at the community college. 


00:26:07 You know, I’ve also heard some people that have gone to some of the Ivy League schools, how easy it is to get good grades there. 


00:26:13 Yeah. 


00:26:14 Well, you know, there is a real theory about grade inflation. 


00:26:17 Oh yeah. 


00:26:18 The biggest thing is, well, you have these high hurdles of entry, but once you’ve cleared them, they wanna make sure that their reputation still looks good. And having not gone to an Ivy League school, I can only go through the rumors that I’ve heard that a lot of what is valuable is the network. You’re tapping into an incredible network that’s already connected in the system. 


00:26:43 I think the big difference that I noticed was when you’re in the community college setting, you might have 20 kids in a class. The university, granted, there’s going to be probably more kids in your class, but the university really stressed, not necessarily, we’re going to make sure that you really know this and we’re going to weed you out. That really wasn’t the case. It was more of, let’s really get in depth with this material and have higher level conversations. And they’re really trying to extract it verbally and in writing a lot more than just A, B, C, or D. 


00:27:17 But then it was also very interesting how many employers actually looked at your transcripts. 


00:27:22 Exactly. 


00:27:22 Oh, man. 


00:27:23 Although I’ve actually, the best job I’ve ever had, my boss looked at my transcripts. You want to see where those A’s were coming from. Are they coming from accounting, or are they coming from jewelry making. 


00:27:35 Right, right. 


00:27:36 Well, generally, grades only… helps you get you to the next level. 


00:27:43 It’s mainly for the scholarships, or like you said, the next level. It’s not necessarily as much. 


00:27:47 Right, it’s opening doors. I will say that one of the things that… I’m speaking as an employer right now, it does matter to me somebody’s education, but I’m really looking for validation of competency in certain categories. The one that probably–


00:28:03 Mainly writing. 


00:28:04 Yeah, that’s the one that surprises people. They say, why writing in numbers? 


00:28:08 Yeah. 


00:28:08 Right? Pfft. Yeah, and so I’ll ask you, Matt, because I lean on you on occasion. I have you proofread things. Why do you think writing would be one of those that I would recommend that everybody learn how to write? 


00:28:21 Well, it, when you write, it’s a reflection of your competency, right? And it’s kind of blunt, but like if you cannot write and you can’t get your thoughts on paper, that person is inherently not gonna trust you as much when it comes to letting you make those higher level decisions. Writing is a reflection of how you’re thinking. And if there’s a disconnect. 


00:28:41 That’s literally where I was waiting to see. Is he gonna say that? Cause I think writing is how you… it’s a reflection of thinking. 


00:28:50 Absolutely.


00:28:51 But it also depends on what you end up doing. I was working as a financial analyst and I needed to understand what net present value was. 


00:28:58 Oh, yeah, yeah. 


00:29:00 To calculate the internal rate of return. Those are fairly technical things, but it’s something that you need to know how to do it. You also need to understand what it is.


00:29:09 Yeah. I think that those are actually similar to writing in that it’s a validation that you have a deep understanding of concepts and know how to apply them. That’s what I think of thinking as, is that you have an understanding of the topic and know how to apply things to it. 


00:29:28 But also there are certain things that are not being taught in universities that should be taught. For instance, I had no idea how valuable a CPA license is. You might not end up working as a CPA for the rest of your life, but it’s a tremendous door opener. 


00:29:50 Yeah, I honestly think there’s some things, this is just–  


00:29:53 Nobody told me that. 


00:29:54 Yeah, well, talk about, band standing on this program, right? As a financial guy, this is where I’ll get on my soapbox for minutes. I think we really do a disservice in this country educating about the financial system, right? It’s something that we have tried to do on this program a lot. One of the things that’s poorly understood by the population at large, and we all get touched by it, is taxes, right? I mean, you have this basic understanding that if I earn money, the government takes it. But a lot of people struggle with the idea of how tiered and graduated taxes work, the different types of taxes, the treatment of capital gains, the way passive income is different than active income. And then we name all these things after, tax code. So, oh, well, you need a 1099-INT for something. And they’re like, oh, my gosh, what does that mean? And so between not teaching a whole lot and then having terrible naming nomenclature, right? It just leaves people sort of terrified. And so what do you end up doing? You end up hiring people to help you because they are trained in it. And it just ends up, so it’s a tax on the tax, right? 


00:31:04 It’s also amazing to see how few say, and I was a business major, how few business majors actually understand what is a true cash expense, which is an accounting expense. 


00:31:14 Sure.


00:31:14 Is depreciation, is amortization a cash expense? No, it’s not. 


00:31:19 No, no. 


00:31:20 But of course, it originates in cash, but it’s not treated as cash on the income statement. And very few people understand that. 


00:31:28 Yeah, well, the nuances of accounting, and of course, if you really wanna get into the weeds of it, starting to understand the difference between cash basis and accrual-based accounting. And while it does make sense, it’s the same reason that, like people, I have a theory about really big businesses, right? And education’s a really big business now, that all of these really big businesses have an aspect of banking to them, because there’s cash moving through these organizations. And so the cashflow and the tax treatment matters, because you need to manage both in order to keep the resources balanced, right? And so, of course, nonprofit institutions, they have the advantage of not worrying about taxes the same way that for-profit institutions do. But they still have to worry about how cash moves through the system and the timing of when it arrives and the sources of funding. 

And most nonprofits are still tied to tax receipts. So they are connected. And I think that the general lack of education in the way that system works is a disadvantage to our citizenry. But I look at it and I say, and I’m not pointing a finger and assigning fault here when I say this, I know lots of teachers at high school or even college professor level, they don’t know this stuff either. How would we expect them to teach it? And that’s not an indictment, that’s just an acknowledgement of where we’re at in the system. I’m not saying you’re bad for that, I’m saying most people are like that because they didn’t get taught either. So I don’t know how people get the financial education. I had to seek it out with great intention, and I learned the hard way as an entrepreneur. Fortunately, my businesses were really small early on, and so the mistakes were less painful because they were small in scale, but the mistakes hurt, they’re expensive. 


00:33:21 Well, and also, you know, just because you know anything in theory doesn’t mean that you have the practical skills to apply it. For example, you know, I was a finance major, I knew everything about forward contracts, options, you know, those kinds of things, currency hedging and whatnot. I still bought a huge option for US dollars versus the Norwegian Kroner back in 1989, a week or so before the Berlin Wall fell. And that option was a huge expense that I had to swallow. 


00:33:52 Yeah. Well, I mean, now we’re going to get it. So all right. I’m going to stare at the camera. I know this is perfect. We need to take, like our last break. No, no, you set this up, right? Remember what I said. Sorry. So I need to hear the music, Dale. What you said, right? Early on, I said, don’t let your school get in the way of your education. Oh, you just talked about an education, didn’t you? 


00:34:15 Yep.


00:34:16 And so let’s not all education takes place in the classroom. Stick around. We’re going to talk more when we come back. 

All right, gang. Welcome back to the homestretch of The True Wealth Show. Dave Littlejohn. In studio today I’ve got…


00:34:28 Matt Dikson. 


00:34:29 And also my good friend. 


00:34:30 Knut Torvik. 


00:34:32 We have been talking about the education show. We’ve wandered around a little bit. This last one is not all education takes place in the classroom. Knut was just sharing some stories about, I’ve had plenty of mistakes professionally that have been very costly. Unfortunately, none of them have completely wiped me out. I’ve had to learn the hard way for sure. I guess I want to bring it back to our students. Let’s talk a little bit about affordability. One of the things, how do you pay for college these days? 


00:35:08 Some people would like to have the kids have a stake, so to speak, by not paying the whole thing. Some people will say, well, you have to take up loans for the whole tuition bill and room and board. And other people are in a fortunate position that they can start early and save until they get the kids to go to college. My wife and I, we started to save as soon as the kids were born. I think they were soon to have their social security numbers. I went and opened up a 529 Plan for both of them. Didn’t invest a huge amount of money. I think we started with like 25 bucks or 50 bucks a month, but over time. I’m sure you talked about the whole thing with the time value money, the rule of 72 and whatnot. 


00:35:57 Yes, we have on this program before, sure. 


00:36:00 Yeah, but all that stuff works. 


00:36:03 Right, right. 


00:36:04 Over time, because you have 18 years to do this. 


00:36:09 You know, there’s a couple of interesting things that have recently shown up. They were born out of the Secure Act in 2022, also around 529s that have made them far more interesting than they were at any point. 529s have, for a little while, we almost kind of called them a myth, right? I mean, meaning it was a sort of smart aleck way as financial advisors to say, well, 529s are kind of obnoxious because they don’t really give you a significant tax savings to contribute to them. And while they grow tax deferred, a lot of them are, every state kind of has their own program. So each state gets one, because they’re municipally administered, right? So it’s at a state level. And–


00:36:55 I think it’s important to also look at what is the best plan out there? Because if you go to the Oregon plan, there’s a certain tax implications involved. 


00:37:06 Right. 


00:37:07 In my mind, the tax savings is worthless. 


00:37:11 Yeah, it’s pretty negligible. So you have to look at the underlying performance. 


00:37:15 To look at what’s the best plan out there. 


00:37:18 I was going to say, I think, didn’t they change the law starting January 1 of this year, where you’re now eligible to, potentially eligible [and asterisk that], because there are some things that you have to meet in order to do that. But you can roll that 529 into a Roth IRA. 


00:37:36 Yes.


00:37:36 That’s a big deal.


00:37:38 It’s a very interesting feature. So, and here’s why it’s so interesting. There’s been a season where I would have suggested to parents it may be better to fund a Roth IRA for your kid than it would be to fund a 529. Maybe, right? Again, we don’t give specific advice on the program. You need to see me after class for that. But the reason being that if a kid ends up, one, retirement plans typically don’t count against the kid’s eligibility for financial aid. So Roth IRAs are interesting because they live outside of that. Two, Roth IRAs are eligible to be used for first time home purchase or education. You will not pay the penalty on early withdrawals. Right? 


00:38:24 Okay. 


00:38:24 So they still grow tax deferred. You do have to pay tax on the growth that comes out if it’s being spent there, but it’s more flexible. And if it’s not used for college, if they have scholarships or they don’t use it all for school, they get to keep it. And it ends up being a, you know, tax-free retirement if they satisfy the five-year-old and wait until 59 and a half for withdrawals. So it’s a good deal. 


00:38:44 But still, you know, 529s have some funky deals for them. They’re difficult to manage because you can only change your investment options. I think it’s twice a year. 


00:38:53 Yeah, and you only get the menu available from the 529 provider. 


00:38:58 What’s even on that menu? 


00:38:59 It depends. Each state is different.


00:39:00 Okay.


00:39:01 Right? The states usually contract with mutual fund providers. And so that’s kind of how it works. Typically it’s going to be a kind of network of index funds or low cost mutual funds. 


00:39:11 So we didn’t look at any other options than that 529. That was the vehicle we chose. 


00:39:16 Yep. 


00:39:16 But there were other things out there that probably could have been better, I don’t know. 


00:39:20 Hard to say. I mean, just in the form of, what it’s worth, we selected 529s for our kids, right? And so this is a financial advisor. That’s what we chose to use for our family. The reason it’s kind of handy is because you can have multiple 529 plans and for, you know, earmark for each kid or you can have one 529 plan and then just change the beneficiary to the kid as they use it. And remember, the benefit of a 529 plan is it grows tax deferred, and if it’s spent on qualified education expenses, it’s tax free. 


00:39:51 Including room and board. 


00:39:52 Including room and board. Qualified education expenses, that’s the key on this. So you just have to make sure it’s qualified. 


00:39:58 But I think the major lesson is that you start early and you just keep going. 


00:40:04 Yes. 


00:40:04 You don’t have to save a huge amount.


00:40:07 Right. But the wild part about the law change now too is if you save a bunch in there, and grandparents can use this as a estate planning tool because you can accelerate gifts, you can do like five years of gifting all at once, get that money out of your state, save potential estate taxes, get it into an environment where it can start growing early. You put 40, 50 grand into an account when the kid’s two years old, that grows a lot by the time they’re 18, or should if it’s invested properly, but you do that. Then that’s a pretty good chunk for that kid. Let’s say they don’t go to college. Well, now if that plan’s been in existence for more than 15 years, you can start to fund a Roth IRA from that plan. Right, so my understanding is up to the income limits for the person, but you can, that money can be rolled into an IRA. You do have to have income to match it, but that can be the source, right? So that’s pretty cool that you could get it out of a 529 plan. If it doesn’t go to education, it can be converted to Roth now. That didn’t exist before. 


00:41:08 I also think it’s important to look at what’s the best plan out there. Forget about the state income tax benefits, because that’s really worthless. I think it’s–


00:41:18 Yeah, it’s just so nominal that it shouldn’t wag the dog. 


00:41:21 No. So we always looked for what the best mutual plan family out there to provide a good return. So I think we really started out with Oregon plan. Actually when we started Texas, of course Texas doesn’t have an income tax so there’s really–


00:41:37 Not a lot of, yeah, advantage there. 


00:41:40 When we came to Oregon, we opened up through the


00:41:44 Yep.


00:41:45 And we’ve… I’ve found that plan very difficult to work with. We chose something else. 


00:41:50 Well, they did, depending on when they changed a few years ago. Years ago, I think it was administered by MFS. And I think that, maybe that one still exists. But then the Oregon College Savings created, they changed vendors, right? So those contracts are not necessarily static. So there are a number of resources. You guys all have Google out there and you can do some homework. 


00:42:11 I think there’s a good website out there called 


00:42:14, yeah. 


00:42:16 It gives you information on all the plans out there. 


00:42:19 Yeah, it gives you the four or five cap rating. It’s not stars, it’s the little college cap. 


00:42:25 So you can compare and contrast. 


00:42:26 Yeah. They’re pretty interesting. They really are.


00:42:30 But still, I think the most important thing is that you are starting early and you keep doing it.


00:42:35 Yep, early and often that’s where you get the benefit of time and compound interest because it is tax deferred in these vehicles. And again, there are others out there for purposes of today. And I don’t think we have the time to really dig deep into all the funding mechanisms. But, you know, here’s some low hanging fruit as far as hacks go for you. One, retirement plans typically, not going to be included in your FAFSA form, right? That’s the Federal Financial Aid application. But they are going to look at parents’ income, even if your parents, not helping you pay for it, your parents are going to probably count against you. So this is where, if you’re in high school, there’s a bunch of dual enrollment programs that are coming on board right now. Ask your high school guidance counselor about whether or not they’re a community college dual enrollment programs. They cost you nothing and you get college credit. So if you can start to accumulate that, that’s direct savings should you go into college. And I see zero downside if you end up going to trade school or not going to college to have that credit and not use it is better than to not have the credit and have missed out when you could have. 


00:43:37 Because you can still use it for trade school, can’t you? 


00:43:40 If applicable, yes, I would suspect so. So anyway, check out dual enrollment, fantastic program. I have seen some early glimpses of some of the new material coming out too. It’s very cool. So excited to see Roseburg and a lot of the other Douglas County School Districts partnering with UCC to get that done. So look into it again, talk to your high school guidance counselor. Guys, I’m looking at the clock. We are, we’re out of time. So I’m just going to go, Knut, thanks for joining us today and pitching in. 


00:44:11 Thanks for inviting me. 


00:44:12 Absolutely. And Matt, thank you as always. How do they reach us if they’re trying to navigate the college financing and they just want to get some insight? 


00:44:20 Give us a call or shoot us a text, 541-375-0898.


00:44:25 All right. You can also, make sure you can find us at if you want to email. Just go to You can navigate through lots of ways to reach us. As always, you know, if you’re not gonna do it yourself, find somebody you like and trust. If you don’t have that somebody, give us a shout. But otherwise, we are out of here. So until next time, I’m Dave Littlejohn. 


00:44:45 Matt Dickson. 


00:44:46 Knut Torvik. 


00:44:47 And you’ve been listening to True Wealth on News Radio, 93.9 FM and 1240 KQEN.

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