Author: Nathan Kangpan

Your child takes control of the funds when they turn 18

I’m going to give an 18 yr-old $187,251 on their birthday and see what they do with it. Good idea, right?

That’s what $5,000 a year for 18 years into a Trump Account earning a hypothetical 8% a year grows to. And then the kids legally get the keys to the playground on their 18th birthday.

Sure, it’s technically a retirement account with a 10% penalty if you withdraw before 59.5.

I’m not convinced every 18 yr-old thinks about the $18.7k penalty when they’re looking at the $170k+ payday they get to keep. (And yes, they forgot to account for taxes on emptying the account so now they owe money).

Every account and planning strategy has pros and cons. Funds growing tax-free is definitely a Pro of the Trump Accounts. My kids automatically taking control of the funds at 18 feels like a big Con.

It detracts from college funding

I’m guessing that if you’re the type of parent who has read this far, you already have colleges in mind that you want your kids to go to. Even if college is almost two decades away.

According to the Education Data Initiative¹, the all-in, four-year cost of a private, non-profit college degree is $226,512. And costs have been growing at 4.04% a year. 

If trends continue, then 18 years from the now the all-in cost will be $462,059. 

529 plans were created to help with this immense cost. Like Trump Accounts, the contributions grow tax-deferred until you need them.

But unlike Trump Accounts:

• Contributions going in are tax deductible in many states

• Funds used for qualified expenses are not taxed on their way out

If your state has tax deductions for 529 contributions and you plan to send your kids to college, max out your college savings first before putting money in the Trump Accounts.

It’s an inefficient way to fund your kids’ retirement

I’m 40. Sheila probably won’t appreciate me saying exactly how old she is so I’ll just leave it at she’s slightly younger than me. 

Our eldest is 4. By the time she’s 59.5 and can start accessing funds in a Trump Account without penalties, I’ll be 95.5. According to the CDC², the average life expectancy of a male born in the US is 76.5. females are 81.4.

Maybe we make it two decades past the average person. But odds are we won’t. 

We plan on leaving money for our kids. 

Anything in a Roth they can tap tax-free even if they’re not 59.5 (as long as the account has been open at least 5 years). 

Anything in a taxable brokerage account transfers to them essentially with capital gains reset to 0. That means all those funds will be available to them tax-free when they transfer over if they need it. More than likely before they’re 59.5.

If our daughter (or son) had a Trump Account, any gains over the amount that had been contributed would be taxed at her marginal income rate when she starts using the funds.

Life’s big expenses are front-loaded 

Let’s say you’re 38 right now. You’re married and have two kids. You both have good, but not quite S-tier income from jobs you enjoy (more or less). You work in marketing. Your wife is a physician.

You’ve both been diligently saving for retirement and have built up about $1m between your workplace retirement plans. But that doesn’t help you right now.

You’re trying to figure out how to pay for $42k a year in combined K-12 private school tuition while still getting to go on your twice-yearly family vacations. 

What would be more helpful? 

A. Your parents decided to help you fund your retirement when you were a child. You have an additional $750,000 in another retirement account you can’t really touch until you’re 59.5. It’ll be nice to have then, but not life-changing.

B. Your parents set money aside in their brokerage accounts anticipating they’d one day help out when it was needed. They each gift you $19,000 ($38,000) every year for the next five years to help cover the cost. (There are all kinds of ways to handle how this is done to optimize for taxes. That will be the topic of a future article).

Having liquid optionality is highly underrated.

When I Would Use a Trump Account

I’m not fundamentally against Trump Accounts. There are scenarios where I would recommend or use them for our kids.

You qualify for free money.

By all means open an account if your’re being offered something for nothing. I can’t think of any reasons not to do these:

• Your child was born between Jan 1, 2025 and Dec 31, 2028 and they qualify for the $1,000 government pilot contribution. (Our kids don’t qualify)
• Your employer is planning to offer funding as part of their perks. (I am my employer)

You’ve maxed out your other options. 

This would be a good problem to have. 529 is fully funded or on its way to being funded. You’re maxing your own 401k, IRA, and HSA contributions. Etc. Go ahead and fund the accounts, they are one of the few ways to get tax-deferred growth on your money. (We have a ways to go on our 529)

Know Your Tools

Take a step back and think about how you want to set your kids up for the future because there are all kinds of tax and planning quirks to be aware of or take advantage of depending on your goals. 

Remember, Trump Accounts are just one tool in a wide array of options to help set your child up for their future. As with all tools, it helps to understand the mechanics of how they work relative to others and what your goal is. 

If you’re thinking about your children’s future, check out our other posts:

• Where Do Trump Accounts Fit In?
• Can I Afford Private School?
• Paying for K-12 Tuition with a 529

Feel free to reach out to me directly if you want a second opinion on financial planning for your children.

Nathan
Founder & Lead Advisor
[email protected]

Kangpan & Co. is a flat-fee financial advisory firm specializing in helping mid-career professionals navigate the career, family, and financial tradeoffs that come with this stage of life. This content is for educational purposes only and is not financial, legal, or tax advice. Consult a licensed advisor for help with your individual situation. Employees and clients of Kangpan & Co. may hold positions discussed in our content. Past performance is no guarantee of future results.

1. Education Data Initiative, Average Cost of College & Tuition, last updated 2026-02-14
2. CDC, Mortality in the United State 2024

How I knew it was time for me to leave the corporate world

I missed my daughter’s first steps because I was in meetings I don’t even remember.

It didn’t feel like a big deal at the time. But years later I still remember the moment Sheila texted to say it was happening… and not one thing about the meetings that day.

We knew it was going to happen soon. But it felt silly to work from home for the week just to try and be there for the moment. As a C-level exec in the company, I technically had the flexibility to do it. But it didn’t feel like a good enough reason to skip the company’s mandatory in-office policy at the time.

This was just one of hundreds of small sacrifices I made to put career in front of life and family.

This was also a key moment that shaped my Time Value of Life philosophy that I wrote about last time.

I sat through thousands of meetings during my 16 years in the corporate world. Most of them were about nothing in particular. Many were just minor variations on the same thing over and over. I could have missed hundreds of these and my life and career would have been no different.

But missing out on my daughter’s first steps was literally a once in a lifetime event.

A lot of people I talk to have similar experiences and feelings about their evolving relationship between career and family. They’re looking for a way to balance more evenly between earning and living.

They come to me because they feel trapped in their corporate careers. They want to take a different job they feel more passionate about or be able to spend more time with their families but are worried they can’t afford to take the pay cut.  

They often have more financial flexibility than they realize. 

Three strategies to bridge an income gap when starting a second act

Here’s a simplified example of the kind of conversation I have with people in this situation.

• Jim and Sarah are both 38 and have two young kids. They’re like you and me. They live in the suburbs of a major city, shop weekly at Costco, hang out at the local brewery with their kids and friends on the weekend, etc.
• Their total yearly spend across their mortgage, preschool, and living expenses is $200k.
• Jim earns $80k a year after taxes at a small, independent marketing firm and loves his job.
• Sarah is at a big law firm and clears $300k a year after taxes and maxes her 401k each year. But she travels all the time and is burnt out. She wants to go in-house at a local company where she can feel more ownership over the impact she has each day and be home more with the family. 
• Unfortunately, the company will only pay her $90k a year after taxes. 

A quick mental calculation shows Sarah’s $90k + Jim’s $80k is less than their $200k in living expenses. 

Sarah really wants to take the job but the $30k shortfall is far from a rounding error. She feels like she can’t take the job without majorly reducing the family’s quality of life. She’s also worried about risking their retirement because there’s no room in this budget for 401k contributions.

So we sit down together and look at the bigger picture. 

Beyond their income, they have $750k in retirement accounts already and another $700k in their brokerage account, primarily invested in an S&P 500 index fund. 

We identify three areas together that will help Sarah take her dream job and spend more time with her kids. 

Costs: We map out all their costs and find there are $6k a year in convenience expenses that we could easily eliminate if Sarah is working more reasonable hours and traveling less for work. These convenience expenses are common in families with busy professionals and include frequent DoorDash orders, last minute childcare, etc. 

Investment Income: Instead of keeping all $700k of their brokerage account invested in the S&P 500 index fund, we move part of the portfolio towards a diversified income strategy that aims to cover the $24k a year remaining expenses. We do this through a mix of dividend stocks, private real estate funds, and bonds. 

Retirement: We model out how much their retirement accounts could be worth in the future if, in the worst case, they never contribute another dollar. $750k growing at 8% a year for 30 years = $7.5 million by the time Sarah and Jim expect to retire. We find this is more than enough to cover their expected living costs in retirement. This analysis helps Sarah realize putting more into retirement at this point is a nice to have, not a must have.

This is just one of many ways to create a bridge from a high-paying corporate job that no longer fits who you are with that dream second act. One of the reasons I got into financial advisory is because I enjoy talking about investments and the markets. But I’ve since found the most rewarding projects I take on are the ones where a few hours of financial engineering helps someone take that dream job or step back for awhile to spend more time with their kids while they’re young.

It’s a path I know well. I left my C-level corporate job for a second act that felt more meaningful professionally and more rewarding personally. Missing my daughter’s first steps was a valuable lesson. It’s one I only had to be taught once. I got to see my son take his.

If you liked this piece, check out:

• The Time Value of Your Life: for my philosophy on weighing financial vs. life tradeoffs
• Leaving a C-Level Corporate Career: what it was like leaving an established career to start a second act

Nathan
Founder & Lead Advisor
[email protected]

Kangpan & Co. is a flat-fee financial advisory firm specializing in helping mid-career professionals navigate the career, family, and financial tradeoffs that come with this stage of life. This content is for educational purposes only and is not financial, legal, or tax advice. Consult a licensed advisor for help with your individual situation. Employees and clients of Kangpan & Co. may hold positions discussed in our content. Past performance is no guarantee of future results.

Nathan
Founder & Lead Advisor

Kangpan & Co. is a fee-only, registered investment advisor specializing in helping mid-career professional navigate the work, life, and financial tradeoffs that define their 30s and 40s.

This content is for educational purposes only and is not investment, tax, or legal advice. No post is an endorsement of any particular strategy or security. We do not receive any direct payments or commissions for securities discussed in our posts. Private funds are generally available only to ‘Accredited Investors’ as defined by the SEC. Figures presented are for illustrative purposes only. Past performance is no guarantee of future returns. Investing involves risk including the loss of capital. Employees and clients of Kangpan & Co. may hold positions in securities discussed in posts. Speak with a licensed tax, legal, or financial advisor before making any changes to your investments or financial strategies.

Conventional financial advice is built on a single insight: time multiplies money. The longer you’re invested, the more your money is worth in the future. Defer gratification now, maximize the number later. 

Time has the opposite effect on your life. The more time that passes, the exponentially less time you have left. 

Living a balanced life means ensuring you are properly weighing the time value of all your decisions. 

The Time Value of Your Money

Time is the cheat code to wealth. 

A dollar invested at 8% a year when you’re 20 could grow to $31.92 by the time you’re 65. Time does all the work for you. 

But that same dollar invested when you’re 50 would only grow to $3.17 by the time you’re 65 at that same 8%.

Your invested dollar is worth exponentially more with each passing year. The goal is to start early and let your investments compound. This is known as the Time Value of Money and is one of the first things taught in Finance 101 courses.

The Time Value of Your Life

The Time Value of Your Life moves in the opposing direction as the Time Value of Your Money. It decays exponentially.

Let’s say you’ll live to 80. 

When you are five year old, you still have 75 years left on the clock. The next year of your life represents only 1.3% of your remaining life (1 divided by 75 remaining years). Time stretches out infinitely with all of life’s wonderful experiences still ahead of you.

At 75, you have only five years left on the clock. The next year of your life represents 20% of your remaining life (1 divided by 5 remaining years). 

And it’s not just time on the clock that’s exponentially running out. Life’s experiences have a rapidly decreasing shelf life. 

At 20, you’ll have 60 years to look back on the memories from your summer road trip that you take with your best friends between sophomore and junior year. As Bill Perkins wrote about in Die With Zero, early experiences pay memory dividends throughout the rest of your life. 

At 75? You have just five years to appreciate any new experiences or memories you make.

This exponentially decreasing life to time relationship is what I call The Time Value of Life. It is the inverse of the Time Value of Money

The Tradeoffs Between Time, Life, and Money

Most conventional financial plans and advice are built entirely around the Time Value of Money. Save more when you’re young. Delay gratification. Get a high score at the end. 

What they don’t account for is that every year you spend waiting to live the life you want is a year with a quantifiable and diminishing value on the other side of the equation. 

The goal of life is to ensure you make the proper tradeoffs between the Time Value of Your Life and the Time Value of Your Money. 

Understanding this duality can help you think through many of life’s important decisions. Let’s look at your career through these two tradeoffs.

The Time Value of Your Career

Let’s say you just graduated and are 22. You plan to work until 60. 

You start the “career game” with 38 total working years. Your first year represents 2.6% of your remaining career (1 divided by 38 remaining years). You have zero net worth but at least your parents paid for college so you have no debt.

Fast forward a bit through a few years of meetings, conferences, and late night deck updates. You’re now 40. You’re an SVP at a large company and have $2m saved across your retirement and brokerage accounts. And you’re able to put away an additional $150k a year.

But you’re quietly unhappy. You’ve been thinking more and more about whether you’re on the right path. You secretly wonder if the career track that you fell into at 22 still represents who you’ve become decades later. 

You’ve got a dream in the back of your mind. You want to start something of your own. Do work that matters and spend more time with your kids who are growing up way too fast.  

You really want to take that leap but you’re making good money now and want to save up just a bit more before you leave the corporate world. So you wait a year. Then another year. Suddenly five years have gone by and you just lost 25% of your remaining career to indecision and the fear you may not have enough for retirement. 

Five years of Sunday evenings wondering what might have been. Five years of being the person who almost did it. And the clock is running out faster and faster.

What you didn’t account for was that your $2m invested at 8% a year when you were 40 could be worth $9.3m by the time you retired at 60. Even if you never contributed another dollar to retirement. 

You traded 25% of your remaining career years for money you didn’t even need.

Balance The Equations

These are the kinds of tradeoffs people are making between the Time Value of Life and the Time Value of Money. 

The conventional financial plan optimizes for the Time Value of Money. It does its job perfectly. What it doesn’t account for is what you’re giving up on the other side of the equation. 

Your money has a time value. So does your life. The financial plan that ignores one of them isn’t complete.

Nathan
Founder & Lead Advisor
[email protected]

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Kangpan & Co. is a fee-only, registered investment advisor specializing in helping mid-career professional navigate the work, life, and financial tradeoffs that define their 30s and 40s.

This content is for educational purposes only and is not investment, tax, or legal advice. No post is an endorsement of any particular strategy or security. We do not receive any direct payments or commissions for securities discussed in our posts. Private funds are generally available only to ‘Accredited Investors’ as defined by the SEC. The Personal Endowment is a conceptual investment framework customized to each client and does not represent a specific fund or guaranteed outcome. Employees and clients of Kangpan & Co. may hold positions in securities discussed in posts. Speak with a licensed tax, legal, or financial advisor before making any changes to your investments or financial strategies. Past performance is no guarantee of future returns. Investing involves risk including the loss of capital.

Let me know if this sounds familiar. You’ve watched a position grow from a small bet into a significant chunk of your net worth. Now you’re not sure what to do.

You might leave a fortune on the table if you sell.

But you might lose everything you’ve built if you keep holding. 

This is one of the most common scenarios I discuss with people. Stock that’s built up through RSUs, an early position in Bitcoin, or a bet made on a Mag 7 years back. This position now accounts for a significant portion of this person’s wealth and they’re not sure what to do next.

Here’s how I talk people through this situation. 

Before thinking about any further upside scenarios, think about the downside. 

What would happen if this position went to zero?

Are your financial goals dependent on this position not going to zero? If yes, that’s a sign your concentration risk is real, not theoretical. 

Here are three scenarios when you should consider selling down some of your position. We’ll ignore tax implications for now in each of these to keep the examples simple.

You’ve Won the Game

If this position is worth so much that you could comfortably live off the proceeds for the rest of your life, you’ve already won the game. You don’t need to go for the highest score possible.

How much is enough to live off?

The 4% rule is imperfect but a reasonable starting benchmark.

Let’s say you have $10m in vested RSUs which make up the bulk of your net worth. Your current living expenses are $300k a year (3% of your assets). 

Congratulations, you are financially independent.

You could sell out $7.5m of your vested RSUs and diversify it to lock your future in ($300k a year in spending needs divided by 4%). Then keep your other $2.5m invested if you still believe in the company’s future.

You take your winnings off the table while keeping your upside open.

Your Financial Plan Now Depends on This Position

Even if you haven’t reached the point where your assets can fully support your lifestyle, your position may have accelerated your timeline by decades. 

Let’s say you’re 40 and you have $6m in a crypto asset thanks to your foresight to invest a decade ago. 

You have another $1m in traditional retirement accounts. You put away an additional $200k a year from your job and your goal is to get to $8m total net worth before you retire from the corporate world. 

If you diversify out of your crypto position today into a more conservative mix of assets returning 7% a year, you will reach your goal after ~1.5 more years of work.

Sure, your crypto position could catapult up in the next two months and help you reach your goal faster. But what if it goes to zero? Your timeline to retirement just extended by decades.

There is an asymmetric risk here in continuing to stay so heavily concentrated.

Your Life Directly Benefits From Selling

It’s important to think about the present value of your life, not just the future value of your assets.

The tradeoffs you’re evaluating are not always about pure financial optimization. 

For example, you and your spouse might be expecting your first child together later this year and would like to move into your dream home to build lifetime family memories. 

You’ve been steadily saving cash for a down payment but that still need another three years to get to the number. Meanwhile, you have your down payment sitting right there in vested options that you could exercise today and make your dream life a reality three years earlier. 

Sure, those options could be worth hundreds of thousands more years from now if you keep holding until expiration. 

But is that what you want? An extra two hundred thousand ten years from now when it won’t make much of a difference in exchange for three years of lost family memories while you’re in the prime of your life?

The right answer to a concentrated position isn’t always the one that maximizes expected value. Sometimes it’s the one that makes the life you actually want to live possible three years earlier. 

I wrote about this in more detail in this piece.

What About Taxes?

The tax implications of selling a concentrated position are significant and worth their own deep dive. Especially for ISOs, RSUs, and crypto where the treatment differs meaningfully. 

I’ll write more about minimizing taxes when selling out of a concentrated position in a future piece. Subscribe to follow along.

Or feel free to reach out if you’re working through your own situation. I love hearing from readers.

Nathan
Founder & Lead Advisor
Book a Conversation

Kangpan & Co. is a fee-only, registered investment advisor specializing in helping mid-career professional navigate the work, life, and financial tradeoffs that define their 30s and 40s.

This content is for educational purposes only and is not investment, tax, or legal advice. No post is an endorsement of any particular strategy or security. We do not receive any direct payments or commissions for securities discussed in our posts. Private funds are generally available only to ‘Accredited Investors’ as defined by the SEC. The Personal Endowment is a conceptual investment framework customized to each client and does not represent a specific fund or guaranteed outcome. Employees and clients of Kangpan & Co. may hold positions in securities discussed in posts. Speak with a licensed tax, legal, or financial advisor before making any changes to your investments or financial strategies. Past performance is no guarantee of future returns. Investing involves risk including the loss of capital.

Most financial advice assumes people are machines making objectively optimized decisions.

They aren’t. The best financial decisions I’ve ever made looked suboptimal on a spreadsheet. 

When our company got acquired back in 2017, I ended up with significant assets for the first time.

I decided to use some of that money to buy a modest house in Beacon, NY. I bought it outright. No mortgage.

Any simple financial analysis would have said paying all cash for property was leaving money on the table. Buying the home with a mortgage would have allowed me to keep the difference invested in the markets. This could have resulted in tens of thousands more in net worth over the course of decades. 

I was fully aware of the financial tradeoffs. 

But what I wanted psychologically and emotionally from the purchase outweighed what the spreadsheets said.

I had been living in NYC in tiny apartments for more than a decade at this point. I wanted to evolve my lifestyle. I wanted space and the ability to access nature by train whenever I felt like it.

I had also been renting my entire adult life until this point. I wanted a portion of my assets locked into something that was mine no matter what happened to my job or to the markets. 

Sheila had also just moved in with me and I wanted to start building a life with her. 

Spending the next few years going up to Beacon gave us both experiences we’ll look back on fondly for the rest of our lives. It was exactly what we both needed at the time. 

The price of something is not synonymous with its value. I think I underpaid for that home.

Nearly every client who comes to me with a major decision is navigating both the financial and emotional tradeoffs of the options they’re facing. Here’s a recent example. 

I’m working with a family saving up for their ultimate dream home.

The cash they were able to put away each month meant saving up for that down payment could have taken seven or more years. That’s seven years of forgone memories and experiences. 

One of them works for a Fortune 500 and had sizable amount of vested company stock options. The expiration date was still years in the future. The company’s stock had rocketed up in the past year and a huge chunk of their down-payment could be realized if they exercised their options. 

Conventional financial models suggested continuing to hold the options would maximize their net worth ten years from now. We talked it through and modeled the potential tradeoffs and it was a no-brainer.

The certainty of locking in their down payment and bringing their dream up by five years was worth more than any theoretical money left on the table. Five additional years of a dream life they could be living now vs. a higher net worth decades in the future that would have only a marginal impact on their future selves.

Five years of living in their dream home is not a line item on a spreadsheet. Neither were the years Sheila and I spent going up to Beacon. The point was never financial optimization. 

Nathan
Founder & Lead Advisor
Kangpan & Co.

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Kangpan & Co. is a fee-only, registered investment advisor specializing in helping people live off diversified portfolio income.

This content is for educational purposes only and is not investment, tax, or legal advice. No post is an endorsement of any particular strategy or security. We do not receive any direct payments or commissions for securities discussed in our posts. Private funds are generally available only to ‘Accredited Investors’ as defined by the SEC. The Personal Endowment is a conceptual investment framework customized to each client and does not represent a specific fund or guaranteed outcome. Employees and clients of Kangpan & Co. may hold positions in securities discussed in posts. Speak with a licensed tax, legal, or financial advisor before making any changes to your investments or financial strategies. Past performance is no guarantee of future returns. Investing involves risk including the loss of capital.