A family plan built round a box house

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Meeting Jack

1. Introductions
2. How he found us
3. The tiny box house

What the plan looks like

1. Doing it alongside a job
2. Information overload, and a guide
3. Running the calculator

The wider picture

1. Living off short-term rentals
2. Financial aid, and what the kids want
3. Finding the real estate
4. Insurance, annuities and access
5. Where it leads

Introductions

All right, the recording's in progress. We continue without you. Are you sure you want to leave? No, I don't want to leave.

Stay in the studio. Okay, there we go. Gotta love technology. [laughter] >> Alrighty.

Welcome. Welcome. Thank you uh for joining us. I've got Jack in the house um in the scholarship house.

No, just kidding. We are here. We are here [clears throat] talking about That was a terrible joke. We are here talking about scholarship houses.

That's the moral of the story today. We're going to learn a little bit about how these scholarship houses can be used instead of 529 accounts to save and pay for college. So, super excited to talk with Jack. Jack has joined us um back last year, the end of last year, and uh we'll talk to him a little bit about his experience and working with us.

But to start out with, Jack, welcome and thanks for joining us and tell us a little bit about yourself. Well, my name is Jack uh Beal. I'm in the Chicagoland area. Um I'm a physical therapist.

So is my wife. Uh we have four kids planning to go to college here. We got well actually two in college and two going to go soon. So >> um yeah, college has been a pretty big expense and getting those uh loans are starting to add up.

We're kind of concerned that uh with the four kids, will we be be able to get enough loans to pay for college? >> Yeah, exactly. That's a It's a bad sign when you can't even borrow enough to pay for college. [laughter] >> So, and what really was frustrating for me was, you know, we're W2 employees and uh you know, we're making good money, but we didn't qualify for almost any aid.

>> So, that was a frustrating thing. So, >> talked to a friend of mine who's been working with you since 2019. And uh so it gave me a little bit of confidence to check you guys out and um met with you and I'm working with Laura and it's just been uh good eye opening and a good experience that I think a lot more people need to take a look at. >> I love it.

How he found us

I love it. Well, thank you. And so you found us through a referral, one of our current clients. >> Yes, correct.

>> Very good. And then what interested you the most? I think you were saying you wanted help with the college side of it, right? >> Yeah.

So, um, with the four kids and filling out the FAFSA and >> trying to qualify for more aid, that was that was the main thing I was looking for. How are we going to >> get more free money versus loans for the kids. >> I love it. I love it.

Free money for college is a very popular topic. Yeah. >> Um, for pretty much everyone that we meet with. And so, we're always looking to get um, free money for college so we don't have to pay any more than necessary.

Uh, tell me, you've met with Laura, so she's your college funding specialist. And uh sounds like that's been going great. Have you met with uh Corey or anybody on the financial aid team? >> Oh yeah, Corey, she's been great getting uh because I have uh two in college and a senior in high school.

So she helped with all three of their FAFSAs, getting those in so that we can uh see what the schools are willing to to give us for um you know, free money right now. >> That's awesome. Now, one of the ways to increase that free money and increase that financial aid, like you were saying, you guys make good money and uh when you make good money, of course, it's kind of hard to qualify for some financial aid, but tell me tell me what you guys did last year to help reduce your income and get some of that, you know, free money. >> Well, through your program, we were introduced to the box house >> and uh that was really nice.

The tiny box house

um the tiny box house, you you invest about a quarter of what it's worth into it and then you get the full depreciation by the way that the uh trust and structure set up. So it's a trust where you're the guaranter and the benefits. So it gave us a huge like $350,000 tax deduction. Um so we're looking for a lot of free money hopefully coming up now this year.

[clears throat] >> That is awesome. So, for those of you who don't know, the box house is basically a house that is shipped in a shipping container around the world for oil fields, the data centers, disaster recovery, or wherever they need temporary housing. Um, and so the box house is treated more like personal property. It's almost like buying a vehicle for your business.

It's a it's a personal property that has a VIN number and everything. it shows up on a trailer and you can deduct the value of that box house off of your taxes. And so, um, you were able to reduce your taxes by 300 or your income. You were able to reduce your income by $350,000.

Is that right? >> Yeah. The active income. >> Yeah.

>> Yeah. The active income >> without without having to spend any time or anything like that, right? >> Just write the check. you know, you always uh >> first time you write that uh wire >> to send to buy the house, you get a little bit worried, but read over all the contracts.

I really liked uh working with Kaden and they had the um all the information I needed to look over for my lawyers. Uh me and my accountant went back and forth a little bit. She was sure at first and so uh but yeah, finally she's like, "Okay, I can I feel comfortable doing this, so I'm like, "Good. Let's let's do it.

Doing it alongside a job

Let's uh get those tax returns in so I can send it to the colleges and see how much more we qualify for. >> I love it. You know, it's it's true. We had we had a lot of CPAs look at it.

We we had over 50 clients purchase a box house in December alone. What month did you get yours? >> Uh December. Yeah.

We we held on to about He's like, "You can only do it if you don't do it by the 20th. I can't promise anything." So, I think we did it on the 18th. >> I love it. So, at the very end of the year, we slide in at the end and get a huge tax savings.

That's the other cool thing about it is that you can do it right up until the end and get some really good tax savings. And so, a great way to reduce your income. Now, one of the things that we're really focusing on this year is the scholarship house. The scholarship house is an idea of using real estate like a short-term rental, like a vacation rental, think Airbnb, and using that to pay for college, you know, being able to generate the cash flow.

Now, the box house also is going to have some cash flow. They're getting that all set up this year as they start leasing out. You know, they they've got contracts they're working on and they're going to lease out these houses and you'll get paid monthly cash flow on that, which is awesome. And then we um also have the traditional uh short-term rental, the traditional vacation rental.

And that is another way of generating income. I know we had talked about how that's one of your goals in the next obviously you got a lot of tax savings for the time being, but as you start to look for more tax savings in the future, what are your thoughts on short-term rentals and Airbnbs in that market? >> Oh, I've always been interested in them. So, I'm actually uh was learning from a group was starting to talk about how you can get your own and do it all by yourself, but uh I think I've been in that group for like a year and haven't bought one yet.

So, [laughter] it was kind of uh I don't know is Kismmet or something when you guys started uh talking about the houses and the 50/50 plan we help out. So, >> yeah. >> Yeah, it was right up my alley and it's another thing I'll be looking towards when we need it next in the next couple years. I love you brought I love that you brought that up because my favorite book that helped me, you know, 10x my business was the book of that's called Who, Not How.

and it was written by Dan Sullivan um from Strategic Coach and he talks about the importance of who can help you do things instead of how to do it. >> Ironically, he didn't even write the book. It was Benjamin. It was Benjamin Hardy that wrote the book for him using his information of course and it was his intellectual property and his knowledge but it was ultimately ultimately somebody else that even wrote the book for him which I think is kind of part for part for the course.

Um, yeah. But anyway, you know, you think about it. We all buy these programs or we all get on YouTube University and we all try to learn how to do everything, whether it's filling out the financial aid forms or whether it's, you know, getting into short-term rentals, you know, real estate investing, whatever the case may be. And you can spend a lot of time learning, you know, all of this information, right?

Information overload, and a guide

There's a lot of information out there and you can get information overload and you can spend a lot of your time, you know, learning all this information. What we decided to do is try to make it as easy as possible for our clients, especially people like you that are busy, you know, and and working and earning a good income and just needing somebody else to do a lot of the heavy lifting. That's when we came up with the partnership program where you're the financial partner, we're the working partner and we do all the heavy lifting, you know, and you get all the tax benefits, you get the cash flow and some of the up all the upside or we basically partner on it 50/50, right? So anyway, it sounds like that was something that was interesting to you.

>> Oh yeah, definitely is going to be in the near future probably that we'll be uh investing in that next. >> Awesome. What I what the other thing I like about the program with uh Corey is um where they look at the um tax returns. >> Yeah.

>> So they look at it two years back. So now that we did do this, she's going to help us appeal so we actually get more back from this year and we don't have to wait till next year till the you know shows us tax savings. So [snorts] >> I love >> that's the other nice thing. Now, in talking about, you know, the done with you and the done for you, and we've all purchased courses and and got on YouTube to try to look things up, you know, tell tell the listeners a little bit about your experience in working with us.

Did we just sell you a bunch of videos or has it been more of a hands-on experience? >> Oh, no, definitely hands-on. First, you get the introduction to see if, you know, this is something we'd be interested in. >> Then you go a little bit further to get the background information, the finances, the amount of kids, where they're going to college, where they're interested in going to college.

Uh then we get a another meeting set up, met Laura. She's going to be kind of my guide through all of the different programs you guys have. Um she introduced us to Corey. Um I also talked uh about with the short-term rentals and the box houses >> with some of your partners in those two areas and uh going along from there.

So >> awesome. And the and the journey has just started. >> You've got with four kids with four kids, you've got a long a long road to hope. [laughter] >> Oh yeah.

Oh yeah. And you know, it's it's the same as being a physical therapist. A lot of people can look at stuff online and try and get themselves better, but it's really good to have the expert there to really show you, okay, this works for most people, but this is what you specifically need. And that personalized attention is is really what I think makes the difference here.

>> That's really cool. I'm glad I'm glad to hear that. So, you got your college funding specialist. Laura's been kind of guiding you through the process.

Maybe talk a little bit about some of the tools and some of the resources. I know we've put a lot of money into the calculators and some of that. Was that helpful? >> Oh, we loved it.

Running the calculator

So, the calculator, so we take down all our, you know, information um what we owe and then you get to look at your different favorite colleges or dream colleges and see how much money those colleges are giving out in free money and how much you would have to take out at loans. Gives a whole cost of each college from tuition, room and board, books. So, it's all broken down. So, there's a lot of detail in there.

>> Yeah. Yeah. >> And it says which colleges, public versus private, who gives more money and who doesn't. So, >> right now I have a son looking at uh two colleges.

One's public, one's private, and the private one actually is half the cost because they give so much more free money >> than the public school. >> So, >> that is so cool. That is so cool. Now, >> I'm sure with two kids already in college and two coming behind, you've learned a thing or two.

Is that right? >> Well, yeah. Yeah, we learned some. We got those uh two big student loans out there right now.

So >> now you know younger two, you know how to kind of guide them into the right college, right? You can you can go and do some tours at the right schools. You know, it allows you to do a little homework ahead of time. >> Absolutely.

Absolutely. Yeah. >> I've I've gone to some of these campuses and man, I wouldn't mind hanging out there for four years. It's like a five It's like a five-star resort at some of these places.

I took I went to the University of Evansville in southern Indiana and uh when I went down there it was one way when I took my kids back about 10 years ago man they had a climbing wall they had all this luxury stuff I'm like these aren't the dorms I grew up in or that I went to school in I was like what they're doing nowadays and I saw the price more than doubled to what it was when I was there. So >> that's crazy. >> That's why price keeps going up and it's going to keep going up. So >> that's crazy.

[snorts] Now, I know that we are not very traditional. We like to teach people not to use 529 accounts. We like to teach people how to put that money towards real estate. We call them scholarship houses.

You know, buy some short-term rentals, buy these vacation rentals, and that will pay for college and it will also pay for your retirement. How do you feel about using retire uh real estate for retirement? >> Oh, absolutely. Like I said, I had already had some interest in that >> area with the short-term rentals.

Living off short-term rentals

>> So, kind of what it is is living off your short-term rentals, how to >> get a place, get it coming up, and just worry about cash flow, you don't worry too much about the appreciation or the mortgage because >> the the guests are going to help pay your mortgage. But it's if it's a deal where you can make positive cash flow, >> hey, it's you can live off of that positive cash flow indefinitely. >> That's awesome. Very cool.

Yes, I know there's uh there's the three reasons we always like to talk about, you know, with the scholarship house. Number one, of course, is the cash flow, like you just mentioned, being able to use the cash flow from the real estate to pay for college and retirement, like having your eating it, too. >> And then we love what we call tax scholarships. You were able to take advantage, you know, of some tax savings using the box house.

You know, you can also get tax savings buying a short-term rental, you know, and that can offset that W2 income, which is great, >> saving you more money in taxes than the typical cost of college for that year, right? So, like, >> we have families that are saving more in taxes than a four-year education. And so, that's another way to get free money. Free money is free money.

I don't think any of us care where it comes from, right? >> Yeah. [laughter] And that's and that's the true now that I'm going to get all the money that I paid this year to the federal government. I'm going to get that back when I get my tax money back, which is going to just keep, you know, maybe reinvest that into the next house or whatever we need that way.

Yeah. >> I love some of those old loans, maybe. >> Yep. Yep.

Take some of that college Yeah. some of those tax savings that can go towards basically the cost of college or more property. I love it. And then and then the financial aid.

Financial aid, and what the kids want

We kind of hit on the financial aid. The third one is, you know, if we can get those tax savings, that means we lower our income. Sometimes that puts us into that financial aid category. >> So, that's cool.

That's very cool. Well, I'm glad you had experience. >> Yeah. Yeah.

That's why I said I'm like, I'm working W2 and some of these other people have businesses that show loss and their kids are getting all this Pell Grant money, >> you know? >> So, it's kind of like, well, this is a good legal ethical way to do it. It's, you know, available to you. So, >> yeah, I feel real good about it.

That's awesome. Very cool. What do your kids want to study? >> Uh my daughter wants to be a lawyer.

My son's playing uh division one football. He wants to be a college coach. >> My other son's going to he wants to do uh e economics and finance. >> And my younger daughter, >> she wants to do law, but she wants to um she wants to write policies for the government.

So, >> wow, nice. They might need >> I don't know where where that came from. Okay, >> I love it. Yeah, >> that sounds like job security to me.

>> Yeah, I think she thinks so, too. Yeah. And she's only a junior in high school, so she's still she could still change, but that's where she's looking at right now. So, >> I love it.

That's awesome. >> That's one of the things, too, where they're going to be at college. I was like, I need a box home kind of near where they're all going to be. You know, that's going to be like the Ohio Indiana area down there.

So, >> yeah, >> got to find me one of the short-term rentals down there so I can deduct when I go visit them. You know, we were actually just talking about that today, you know, focusing on that's one of the areas that we've been focusing on is finding houses in college towns, you know, and then Yeah, you can buy a house, use it as a short-term rental, and then use it to stay in when you go to visit the kids. >> Oh, yeah. Absolutely.

Finding the real estate

>> Great. >> I was thinking, too, uh find find the real estate near their college and then they could already start it as a while there and then turn it into a short-term rental. >> Yeah. Yeah.

Absolutely. teach them teach them how to apply all this. You know, we talk a lot about these financial strategies. We talk about real estate.

We talk about, you know, just generating wealth in general. How much of this do you think kids are going to learn in college? >> Oh, I don't think they take No, I don't think they teach much of this in college at all. [clears throat] Outside the box thinking that I really like.

So, >> it it is it is, you know, and that's one of the fringe benefits of doing all of this, you know, is yes, it's true. you're getting tax savings and you're getting cash flow and you're you're able to help your kids pay for college. And we all want to help our kids, you know, to have that education of their dreams. We want them to have a rewarding career.

Some of, you know, some kids are wanting to go to college, some kids choose a different path. Whatever the case may be, we want to support our kids for sure. One of the things that I love about learning some of these strategies is how we can teach our kids these strategies, >> right? And one of the best things about real estate is when we're all gone, the real estate is still here, >> right?

So these the real estate that we're buying today could be passed on for several generations. And so it's like a gift that keeps on giving. You know, it's money that is going to be coming in for generations to come. And teaching kids about real estate investing and generating wealth and all these long-term tax strategies, it's pretty valuable for them to be able to watch and learn along the way.

Oh yeah, absolutely. And also just, you know, there's also part of the program too, like you said, um, you know, when it comes down to it, there is kind of a way you can do increase your savings, you know, so you can pay for things and >> and how that'll be taken care of by a loan, so it's no tax. There's a whole bunch of advantages to coming >> even at the end of the program, too, besides just the houses. So, >> yeah, I love that.

Now, I know that you were referred to us from a client who I met um a while back and we were teaching them how to use life insurance as a way of, you know, repositioning some assets to qualify for some more financial aid as well as another way of paying for college. We now teach families how to use that life insurance to buy the real estate with, you know, and how to how to borrow from it. But my understanding is is you like the idea so much you went out and got licensed. Is that right?

>> Correct. Yeah. Yeah. So I'm licensed in the state of Illinois for insurance and annuities right now.

Insurance, annuities and access

Life insurance and annuities. Yeah. So it's great to learn more of all the, you know, you got to be set up a very specific way. So anybody who hears life insurance, they might think of one thing.

Well, >> not everything's equal. Just like uh I said everything has to be specific. You got to make sure you have all the right writers, all the right non uh non-direct recognition loans. >> There's all the ways that you can be high cash value, >> keep building up your own, so you can uh you know, finance yourself.

You don't have to worry about like infinite banking and not have to worry about uh going to a bank to get a loan or anything like uh I was in the bank and this guy was saying that he had a problem with his business loan, his business account. >> Yeah. >> Like, well, if you if you do it right, you never have to go to the bank. You could just like I did.

I took the money out of my life insurance to pay for the box house. >> That's awesome. >> And then >> and then the box house is never going to cost me anything because it's already kind of out there. So there's a a fee, a ready fee.

>> So that covers the mortgage or the cost on it, the loan on it. >> And then when it does get put into service, all that money is going to go right [clears throat] back into my life insurance. >> That's awesome. >> It's a nice little circular.

And then I can use it again for something else in the future. So, >> we love that rental. >> We love everything about real estate from an investment standpoint for college, for retirement, and everything else. The only downside is it's not liquid.

You don't have access to it, you know, without borrowing against it or selling the house or whatever. And so we always like to teach families what we call a private reserve strategy, which is having access to money, creating a a pool of capital that you have access to that has some tax benefits, you know, um is sheltered from the financial aid formulas and of course the life insurance is a powerful tool to your point if done correctly. 90% of the time it's done incorrectly. So 90% of the time it's just full of fees and it doesn't perform like anybody's expecting.

So like they do have to be designed and set up correctly. But when done correctly, it can be another great way to lower that financial aid number, you know, and qualify for more financial aid. So, you had talked about, you know, one of your bene one of the reasons for looking into working with us was trying to get some free money for college and and qualifying for that financial aid that you normally wouldn't qualify for. We talked a little we talked a little bit about the tax strategies that lowers your income and the other half of the equation is repositioning some of those assets into, you know, assets that don't hurt your financial aid.

And so then that kind of comes full circle. That's how you get your financial aid number as low as possible. >> Yep. Absolutely.

And that was one of the things we had some small IAS that were sitting out there. >> Well, we just moved those over because now with that box house, it's not going to really count against us very much. Maybe just the 10% penalty, but >> now that money is going to keep growing faster and forever going forward. >> I love it.

I love it. And the way you do the reserve, I think too, if I'm if I'm remember this right, but um it also won't go against you when you get your Medicare or your uh Medicaid. So, you know, anybody who's like getting money from their minimum distributions from their IAS, that's going to >> might trigger you to pay some taxes on your Medicare and your social, you know, social security payments there, right? >> Yeah.

So, you're right. If you do if you do it right, if you do start now, >> it's gonna put you in way better when you're when you are getting social security that you won't be taxed or it won't raise your rates as the minimum distributions do. So that's that's the outside of the box. I like >> I love it.

Where it leads

One of my biggest clients is actually in retirement right now living on loans from his life insurance. Um, and he's living on $250,000 a year income tax-free and gets maximum maximum social security benefits. >> Yep. All >> it's almost a shame that's not it should be taught in school.

>> It should it should. But like we said, unfortunately, it's done wrong most of the time. So, but anyway. >> Exactly.

Exactly. >> That's awesome. Well, very cool. Thanks for being on.

This was super helpful. It was nice chatting with you. If anyone who is listening that would like to learn more, um, go out to scholarshiphouse.com and learn how you can use a scholarship house to save and pay for your kids' college and your retirement. It'll give you cash flow to pay for college and retirement.

It'll give you tax savings. We like to call tax scholarships that can give you a lot of free money and tax savings. And then like Jack here, you can also reduce your income enough to qualify for some financial aid and get some free money for college. >> Oh, awesome.

Thanks for being on again. Thanks. >> Yes. Go out to scholarshiphouse.com.

Thanks, Jack. >> Take care. >> All right. Bye-bye.

Okay.