When it comes to saving for college, the 529 plan has become the account of choice and it’s easy to see why. Account benefits include: no income limits to restrict people from opening such an account, liberal contribution limits, state income tax deductions or credits for a portion of contributions in many states, tax-free portfolio growth as long as withdrawals are used for qualified education expenses, and very little impact on financial aid eligibility.

However, for some families, there’s another way to save for college on a tax-advantaged basis. While it comes with significant restrictions, it also comes with one very appealing advantage over a 529 plan account. “It” is a Coverdell education savings account, named for the late Sen. Paul Coverdell of Georgia.

Since its introduction in 1997 as an “education IRA,” the account has been renamed, revamped, and seemingly relegated to the dust bin. But reports of its death have been greatly exaggerated. While the amount of assets in such accounts is a small fraction of that in 529 plans ($7 billion vs. $425 billion, according to the Education Data Initiative), the Coverdell is still alive and kicking. Qualifying families with college-bound kids under roof would be wise to consider using it — not as a replacement for a 529 plan account, but as a supplement.
### 
## __Coverdell pros & cons__

To be sure, the Coverdell has its downsides. First is a very restrictive contribution limit of just $2,000 per child per year. Second, there are income limits that restrict who can utilize such accounts. In order to make a full $2,000 contribution, married couples that file their tax returns jointly need to have modified adjusted gross income (MAGI) below $190,000. From there, as income rises, the contribution ceiling lowers. At $220,000 of income, a Coverdell is no longer an option. Single parents need to make less than $95,000, with contributions completely phased out by the time MAGI hits $110,000. The third strike against Coverdell ESAs is that while investment gains are tax-free as long as the money is used for qualified education expenses, there are no deductions or credits available for contributions.

However, for those who qualify, the Coverdell has one very significant advantage over a 529 plan account: A much broader assortment of investment choices. Whereas 529 plans are typically limited to age-based investment portfolios that work similarly to target-date retirement funds, as well as a limited menu of individual mutual funds, Coverdell account balances may be invested in most investments offered by the sponsoring broker. That makes the Coverdell perfectly suited to SMI’s strategies. Plus, whereas 529 plan accounts permit investment changes just twice per year, there are no such restrictions with a Coverdell. That, too, works in favor of those wanting to follow an SMI strategy with Coverdell money.

![](https://dcktxkaneetr8.cloudfront.net/2022/06/l3-compare-529.png)

## __Details, details__

Just as with a 529 plan account, money in a Coverdell ESA, even if owned by a dependent student, is considered a parental asset. As such, only 5.64% of the balance above $10,000 is factored into the financial aid formula.

One other difference between Coverdell ESAs and 529 plan accounts is that contributions to a Coverdell must stop once a beneficiary reaches age 18 whereas contributions to a 529 plan account may continue.

One advantage Coverdell ESAs *used to have* over 529 plan accounts was that money in such accounts could be used not just for college expenses, but for qualified elementary and secondary education expenses as well. Today, both Coverdell and 529 plan account money may be used for all such expenses. However, 529 plan account holders are limited to using a maximum of $10,000 for K-12 expenses. There is no cap on the amount of Coverdell money that can be used for those purposes.

SMI-recommended brokers that offer Coverdell accounts include Schwab, E-Trade, and TD Ameritrade.

For SMI members who are saving for college and trying to figure out the optimal way to use a Coverdell ESA and a 529 plan account, here’s SMI’s guidance. If you live in a state that provides a state tax deduction or credit for 529 plan contributions, start there, contributing up to the amount that’s eligible for that tax break. Then use a Coverdell ESA for additional contributions so that you can follow your SMI strategy of choice with that account. If you want to make further contributions, add more to your 529 plan account.

If your state does not provide a tax benefit for 529 plan contributions, start with a Coverdell. Once you hit the $2,000 annual limit per child, make any additional contributions to a 529 plan account.

Pairing a Coverdell ESA with a 529 plan account is the optimal way to save for college with the best combination of tax breaks and the flexibility to use an SMI strategy to manage at least a portion of your college portfolio.

Since 1990, do-it-yourself Christian investors have relied on SMI for proven strategies and trustworthy guidance.

Sound Mind Investing

Personal Finance

For some families, there’s another way to save for college on a tax-advantaged basis.

The Coverdell ESA – Still a Good Way to Save for College

There's a misunderstanding in Christianity about serving in ministry. Many people believe that serving in ministry is a full-time pastor position at a church or a missionary to a specific region or group. Unless you fit into one of these roles, you're not really in ministry.

I spent sixteen years in my first career working for a large company that provides a vital service to the public. While employed there, I began to help people understand finances from a Biblical perspective through small groups, teaching classes, and coaching. I did this during the evenings and weekends as a volunteer.

It was years later that God called me to do it full-time. And you know what? The job was exactly the same. The only difference was the amount of time I got to do it each day. I realized then I had been doing ministry all along.

In my focused area of ministry, financial discipleship, I've met hundreds of people with the same passion for sharing the truth about Biblical stewardship and for helping people live it out. A few indicators confirm, at least for me, when someone is being called to serve in stewardship ministry.

# __5 Indicators that you may be called to Stewardship Ministry__

*1. YOU'VE GOT A FINANCIAL STEWARDSHIP STORY*

After connecting with hundreds of people with a passion for financial stewardship, there's one thing that is true about each one. Every one of them has a financial stewardship story.

Some were in terrible financial situations, chasing the American Dream and having the debt to prove it before God revealed to them His biblical financial principles, which led them to financial and spiritual freedom. Others were raised by parents who had taught them these Biblical principles. Still, others didn't even realize they were in bondage to money until someone (a stewardship champion) offered them an option to attend a class or small group and study this topic.

Every person that I've met who is passionate about this topic has a powerful story. Maybe you do too. God doesn't waste anything. __If you've had to fight your way out of a financial mess and you have the scars to prove it, or you've been trained as a good steward by others, God intends to use it.__

*2. YOU'VE MADE A CONSCIOUS DECISION WHICH MASTER YOU WILL SERVE*

The first and most important principle of Biblical stewardship is ownership. Simply put, God owns everything and supplies everything for our lives. Therefore, our role is not the role of an owner but that of a steward. We are stewards (managers), not owners of everything we have in our possession.

The only way you and I can get this owner/steward relationship right is when we no longer believe money, or anything it can buy, will bring us joy and fulfillment. __Faithful stewards have chosen Jesus as their master and have rejected mammon (god of riches) and his promises because they know only Jesus can promise and provide what they need.__

*3. YOU SEE STEWARDSHIP AS THE FOUNDATION FOR EVERYTHING IN YOUR LIFE AND IN GOD'S KINGDOM*

Faithful stewards have a perspective that many Christians still lack. They believe that a follower of Christ can only be faithful and fruitful through good stewardship. In other words, faithfulness and one's ability to produce good fruit are directly tied to how one manages everything, especially money and wealth. To serve God well is to operate as a faithful steward.

Faithful stewards don't believe in being wasteful, even in the little things. They take seriously what Jesus said in Luke 16:10, *"If you are faithful in little things, you will be faithful in large ones. But if you are dishonest in little things, you won't be honest with greater responsibilities."* To please their master, they strive to use their time, talent, and treasure to further His kingdom.

*4. OTHERS SEE YOU AS SOMEONE WHO HAS PRACTICAL AS WELL AS SPIRITUAL WISDOM ABOUT FINANCES*

When you're good at something, people notice. Whether you've been raised with sound stewardship principles or you've learned them through trial and error, people notice because, for many of them, finances are a struggle. Your knowledge and your faithfulness to live out these principles stand out.

It's been my personal experience that money is always of interest to most people no matter the environment. I've been on airplanes, lunch breaks with coworkers, walking, dining, or driving with friends, and whenever the topic turns to money, there's always an increased interest and participation.

Today, perhaps more than any other time in history, people need to understand God's financial principles because the world is full of distractions and material goods, which can quickly become idols that capture our attention and make us slaves to them. Those who have spiritual wisdom regarding money and wealth and how God desires for us to use them can teach and equip others to gain this wisdom.

*5. THE TOPIC OF FINANCIAL STEWARDSHIP CONSTANTLY COMES UP IN EVERYDAY CONVERSATIONS*

When something extraordinary happens in your life, you can't help but share it. I remember when I became aware of God's financial principles and started applying them to my life. As I experienced peace and breakthrough, I wanted to share it with everybody! __I thought everyone should know and understand these principles because of the transformational impact they had on my life.__

When you're passionate about financial stewardship and you have a desire to disciple people in these principles, it keeps popping up in all types of conversations. This is not a coincidence! Because the power of this knowledge is so great and can literally change lives, God will bring you opportunities to share what He's graciously taught you in hopes that you will share it with others.

# __Conclusion__

__Financial stewardship is a ministry for those who want to teach and equip people with God's financial principles so that they may experience financial freedom and be free to live out God's plan and purpose for their lives__. If these indicators resonate with you and you believe God is calling you to be involved in this type of ministry, we'd like to help you get started.

You don't have to quit your job or go on the mission field to serve in this ministry. You can begin by volunteering at your church or in your community. And, if you have questions or would like someone to talk to, please contact us. We would love to help you as you consider the next steps.

We teach church leaders the biblical perspective on finances.

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There's a misunderstanding in Christianity about serving in church ministry--see if you're a good Stewardship fit

Are You Called to Stewardship Ministry?

## If you go for a walk in the bustling cities of Jakarta, Mumbai, or Nairobi, much of it will feel quite foreign to the average American, but then you will encounter the familiar sight and smells of McDonalds or Starbucks.

If you step inside, there are some interesting local adaptations, such as McDonald’s completely vegetarian menu in India. Franchise businesses around the world have seen steady growth in the past few decades, particularly in Brazil, China, and Mexico, as emerging economies have grown rapidly and their citizens have acquired taste for these ‘aspirational foods.’ Many developed markets are reaching brand saturation with high competition and limited room for growth. Over 60% of the International Franchise Association members (US-based franchisors) currently franchise or operate in international locations, and 16 percent generate between 25-30 percent of revenue from international activities.

At Faith Driven Entrepreneur, we have been reflecting on how we might see greater social and spiritual impact through entrepreneurship and how Faith Driven Investors can support and finance this. Every day, we meet incredible entrepreneurs who have beaten the odds and, through hard work and ingenuity, have built vibrant businesses. But sadly, we also meet entrepreneurs who are struggling. They may have a great concept and some traction, but they are unable to scale and don’t achieve their potential.

The reasons for this include:

- Most enterprises are opportunistic and not strategic.

- Many founders lack core business skills or experience.

- In many cases, they are isolated, without support structures or a strong team.

- They lack proper operating systems and corporate governance.

- They can’t access sufficient growth capital.

Franchising offers a powerful model to address these challenges and to achieve scale and impact through replication. In the US, the success rate of franchises is significantly higher, and that is reflected in the lower cost of capital and in the willingness of banks to lend to them. Franchising offers several advantages over traditional business growth models, all of which serve to reduce risk and increase the likelihood of success:

- It provides a proven business model.

- There is an established operating model with defined systems and processes.

- It offers a trusted, credible brand. This is really important in countries with low safety and quality standards.

- The franchisor provides for the franchisees with additional support services, such as training, quality control, advertising, and marketing.

- The franchisee generally contributes capital, entrepreneurial skills, operational oversight, and local market knowledge. They have ‘skin in the game.'

Done well, franchising should be a win/win, as both franchisor and franchisee have a vested interest in the business succeeding.

From a Christian perspective, franchising is also a powerful way of transmitting a values-based culture and being a witness for the Gospel, often in countries which are closed. While missionaries might be blacklisted, doors are flung open to welcome in foreign brands. Franchises can offer more than hamburgers and fries—delivering incredible social impact such as standardized medical care, potable water, education, and clean energy at the base of the pyramid. Some incredible examples that we’ve encountered recently include:

- A KFC franchise in Spain is owned by a Christian brother who operates 9 outlets with 180 employees and expects to double in the next 12 months. In his leadership training for his employees, he is able share his faith motivation and lead them in integrating values in their lives. He works closely with a local church and is able to support their ministry with profits from the franchise.

- A chain of fitness gyms operating in countries which are often hostile to Christianity is one of the largest disciple-making movements in the world. They have tens of thousands of members who would rarely, if ever, attend a church or encounter the Gospel. These members come to their gym weekly and develop deep relationships with the local owner who has an opportunity to disciple them and connect them with a local church.

- Jibu, a water purification company in East Africa, provides water filtration technology to franchisees. Clean water is a massive need—in Uganda, 51% of the population lack access to clean water, while 786mm people worldwide face this challenge. Jibu has grown rapidly to 137 franchises in 7 countries.

- And, of course, closer to home, well-known US franchises such as Chick-Fil-A, Auntie Anne’s, and Popeyes have created cultures which love their employees, who in turn love their customers—providing a powerful platform for leadership development and Christian witness.

These examples above also illustrate two different types of approaches to franchising:

- __Outside In Approach__ – There are proven established businesses (usually from developed markets) that have proven and predictable operating systems (e.g., KFC)

- __Inside Out Approach__ – Opportunities that originate in local markets (e.g., Jibu)

So, if franchising has such potential, why don’t we see more of it? The reality is that, for both approaches, the barriers and costs to entry remain significant.

For an international franchisor, it is challenging to enter a new market, particularly one which is significantly different from his/her home market. In particular, establishing market demand, adapting the business and operating model to local tastes or customs, and finding the right owners with aligned vision and values can be extremely difficult.

For the local franchisor who has a vision to scale, the expertise to do this is scarce, and the growth capital is practically non-existent.

__The Franchise Studio model__

To solve these challenges, we are developing a Franchise Studio model. This combines the talent selection and development model of an accelerator, the strategic advice and investment of a VC fund, and the hands-on operational support to develop the franchise model and scale it. The founding teams do not need to have their “world changing idea” in place. They are just highly motivated, capable individuals who are motivated by their faith and looking for an exemplary opportunity to create a flourishing business which can grow for greater social and redemptive impact. The Studio assesses, mentors, and disciples these potential founders to determine the best “franchise fit,” often working closely with other Christian accelerators who have a pool of alumni.

![](https://images.squarespace-cdn.com/content/v1/5c755f8a7eb88c63adc29a19/6624e37c-5680-4217-9a6c-fefc47ac18bd/Reuben-Coulter-WP-pic1-768x416.png?format=2500w)

The Studio can then match the founding teams with either an Outside In or Inside Out opportunity.

1. In the Outside In approach, the Studio can take on master franchise rights for the market and can develop, grow, and support a franchise model on behalf of the franchisor. It can also act as a franchisor agent—matching the opportunity with a founding team and collecting a finder’s fee for a founder referral to the franchisor. The Studio would also participate with the franchisor in co-funding the franchise opportunity. The Franchisor is assured of a local partner with aligned values, strong ability to execute, and a pipeline of talent to expand the business as it scales.
2. In the Inside Out approach, the Studio identifies and invests in businesses in the local market which have gained some traction and works with the founding team to develop a franchise business model.

The value addition that a Franchise Studio offers includes:

- Screening and selecting values aligned, high-capacity teams

- Assisting in product validation

- Providing seed investment to quality teams with validated products

- Contributing expertise and mentorship

- Developing roadmap and operational systems for scale

- Providing centralized administrative functions for cost effectiveness

- Delivering advice and support from franchise experts in the Faith Driven movement

- Providing Kingdom impact and transformative input and guidance to investees

Over the next 12 months, we will be testing and validating the Franchise Studio model in East Africa. If faith driven franchising matures to even a fraction of the size that commercial franchising has reached, it will have achieved sufficient scale to impact millions of people in emerging and frontier markets—providing them with an opportunity to become followers of Christ, to access essential goods or services, and to experience life to the full.

__Acknowledgments__

Special thanks to the Faith Driven franchise working group for their contributions and leadership on this journey—especially Henry Kaestner, Tony White, and Ray Barreth.

Join a movement of investors, fund managers and leaders who believe that God owns it all and he cares deeply about why and how we steward his investments.

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If you go for a walk these bustling cities, much of it will feel quite foreign to the average American.

Faith Driven Franchising – Turbo-Charging Entrepreneurship & Impact in Emerging Markets

The thing God wants for us more than anything else is to reflect his heart. And his heart is one of boundless generosity. We’ll discuss that today on MoneyWise. 
<ul><li>On our Monday programs, we like to get back to “first principles” — to talk about foundational truths that undergird the other things we discuss on this program.</li><li>When it comes to money, there are only about five general ways you interact with it: <ul><li>1. You can earn it</li><li>2. Use it to live on</li><li>3. Give it away</li><li>4. Pay it to someone you owe</li><li>5. Or you can invest it so that it can grow to meet future needs.</li></ul></li><li>So far this month, we’ve covered “earn” and “live.” On this episode, we want to talk about “give.”</li><li>Maybe you’ve heard someone say something like, “Why should I give to the church? I need the money more than they do!”</li><li>WHAT GOD REALLY WANTS</li><li>Christian giving isn’t about something God wants from us. It is about what God wants for us.</li><li>And what does he want? Ultimately, he wants us to be like him. That’s what Christian discipleship and the work of the Holy Spirit is all about — molding and making us, day by day, more like the Lord himself — the One whose very nature is to give.</li><li>God is the great giver. Why did he create the universe? Why did he make the human race? Why did he send Jesus to us?</li><li>All of these things flow from his boundless generosity and love. And this generous God wants us to be like him.</li><li>The Apostle Peter says we who have come to Christ have become “partakers of the divine nature.” There are many implications of that, but among them is that the very generosity of God should flow through us. That includes giving financially to support God’s work in the world.</li><li>Unfortunately, many Christians think of giving as a burden — as something “they have to do.” No, it is something we get to do. Giving is a privilege. And it helps us, when done with the right attitude, to experience the joy of generosity, and become people who delight, as God does, in giving freely.</li><li>BEING A WISE STEWARD</li><li>Being a generous giver is facilitated by being a wise and faithful steward in every area of your finances. If you plan well, spend wisely, and avoid debt, you can more easily grow in generosity.</li><li>And by growing in generosity, you’ll become more and more Christlike. And that is exactly what God wants for you.</li><li>18th-century preacher and theologian John Wesley. I did this a couple of weeks ago as well. One of his famous sermons is called “The Use of Money.” In it, he says, "Having, first, gained all you can, and secondly saved all you can, then give all you can."</li><li>There is something implicit in what he is saying — and that is wise money management.</li><li>The only way you can save all you can is by managing your earnings wisely. And that also holds for giving all you can. If you learn to manage money well, you’ll be able to give more.</li><li>Giving money away will make you a more joyful person. Because as you grow in generosity, you will become more and more like the person God intends you to be.</li><li>In 2nd Corinthians 9:7, the Apostle Paul writes this: “Each of you should give what you have decided in your heart to give, not reluctantly or under compulsion, for God loves a cheerful giver.”</li><li>Giving reluctantly or under compulsion misses the whole point. The God who has given to us so freely — to the extent of giving his only begotten Son for us — wants us to give freely too.</li><li>Now, if you find it difficult to give cheerfully, let me urge you to take that to the Lord. Ask him to make your heart like his heart. That might not happen overnight. But if you keep up that prayer, I am confident that God will answer. You’ll become a cheerful giver — and be more like him.</li></ul>On this program, Rob also answers listener questions: 
<ul><li>Are you taxed on the proceeds from the sale of a home?</li><li>Does it make sense to take money out of a TSA to pay off a mortgage?</li><li>Can you sell your home to an adult child for a predetermined price regardless of the appraised value of the house?</li></ul>RESOURCES MENTIONED: 
<ul><li><a href="https://www.moneywise.org/find">Find a Certified Kingdom Advisor</a> </li></ul>Remember, you can call in to ask your questions most days at (800) 525-7000 or email them to <a href="mailto:questions@moneywise.org">Questions@MoneyWise.org</a>. Also, visit our website at <a href="http://moneywise.org/">MoneyWise.org</a> where you can connect with a MoneyWise Coach, join the MoneyWise Community, and even download the free MoneyWise app.

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MoneyWise is a daily radio ministry of MoneyWise Media. Hosted by Rob West and Steve Moore, the program offers a practical, biblical and good-natured approach to managing your time, talents and resources.

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The thing God wants for us more than anything else is to reflect His heart. And His heart is one of boundless generosity. We often think it’s about God wanting something from us but really, it’s about him wanting something for us.

Christian Giving Is About What God Wants For Us

In 2001 Western Uganda was at war. One town led by Hannington Bahemuka chose to focus on what they had and trust God to rebuild their war-torn town through their own generosity.

We exist to spread the message of biblical generosity in order to grow generous givers especially among those entrusted with much.

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Bishop Hannington shares her inspirational generosity journey.

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