Networth and Chill with Your Rich BFF

Host: Vivian Tu
Episode: How Parents Save, Invest & Build Wealth for Their Kids
Date: January 28, 2026

Episode Overview

In this episode, Vivian Tu (aka Your Rich BFF) breaks down the actionable strategies parents can use to secure and build generational wealth for their children. She mixes personal anecdotes, financial wisdom, and her signature candor to demystify financial tools and techniques—from credit cards to trusts. Vivian’s main goal: provide parents with attainable steps to set their kids up for financial success, while also breaking generational cycles of financial ignorance and instability.

Key Discussion Points & Insights

1. Building Credit Early: Adding Kids as Authorized Users

• [05:10] Vivian introduces the concept of adding children (even newborns) as authorized users on your credit card. This jumpstarts their credit history and helps them start adulthood with a strong credit score.
  • “Some people get a cigar for their high school graduation. I’m planning on giving my kid a credit score in the high seven hundreds, maybe eight hundreds. Is it bad that I’m kind of jealous of that?” — Vivian Tu [07:40]
• KEY INSIGHT: You don’t need to give your child the physical card for this to work. Just pay the bills on time—your responsibility affects their score.
• Caution: Poor credit habits will hurt both your score and your child’s.
• [09:10] Vivian notes you can even add a newborn, though not all card companies allow it.

2. Educational Savings: 529 Plans

• [12:00] Vivian explains 529 accounts: tax-advantaged investment accounts for education expenses, available even before your child is born.
  • Parents get potential state tax deductions, and money grows and is withdrawn tax-free if used for qualifying education expenses (including K-12, college, and even trade schools).
  • "This is the kind of stuff that nobody talks about but you can do too. Regular people use this. I would know because my parents had one for me.” — Vivian Tu [14:57]
• [17:45] Even unused funds can be rolled into a Roth IRA for the child (up to $35,000), a newer benefit.
• KEY INSIGHT: Start early, even before you have kids, by naming yourself as beneficiary and transferring to your child after birth or adoption.
• “Making it possible for them to graduate debt-free, letting them start at zero, is such a gift. It's a gift my parents gave me.” — Vivian Tu [19:05]

3. Jumpstarting Retirement: Custodial Roth IRAs

• [22:08] For kids with earned income—think babysitting, mowing lawns—a parent can open a custodial Roth IRA.
  • Contributions grow tax-free for decades; withdrawals in retirement are tax-free.
  • “The best asset you can have for investing is time. So giving them an 18-year head start means 18 years of compounding interest.” — Vivian Tu [23:00]
• Early access: Contributions (but not earnings) can be pulled out at any time (e.g., for a car or house purchase).
• Common among the ultra-wealthy (Nepo baby alert): Some wealthy parents employ their children through family businesses to generate “earned income.”

4. Trusts: What They Are, and Who Needs Them

• [26:09] Vivian clarifies the often-misunderstood concept of trust funds.
  • A trust is a legal entity through which you can pass on assets (real estate, investments, etc.) with specific conditions.
  • “Somebody in the family tree's got to make the money, and unfortunately, it's probably going to be you.” — Vivian Tu [27:10]
• Benefits: Assign a trustee to carry out your wishes, protect assets from creditors, and control distribution (especially important for financially irresponsible heirs).
• "The gag is that with a trust, you can tell everybody in your life exactly who gets what, when they get it, and why.” — Vivian Tu [28:33]
• For all levels of wealth, not just the ultra-rich; consult an estate attorney to determine if a trust makes sense for your family.

5. Passing Down Knowledge, Not Just Money

• [31:48] Vivian addresses the “shirtsleeves to shirtsleeves in three generations” adage: most generational wealth doesn’t survive past the third generation.
  • “Generational wealth is not just money, it's also that education. Because rich people do pass down these secrets and the rest of us, we have to learn the hard way.” — Vivian Tu [33:15]
• Practical steps: Teach children about personal finance, responsible credit use, how to invest, and the value of a dollar.
• Suggestion: Use allowances, rewards, or incentives for achievements to instill money values early.

Notable Quotes & Memorable Moments

• “Is it bad that I'm kind of jealous of that? When I was 18… I didn’t have an excellent credit score until later in my 20s just because my credit history was short. But for my kid, they’ll never have to worry about building up their score because I’ll have done it for them.” — Vivian Tu [08:20]
• "You can protect your kid's wealth even from beyond the grave." — Vivian Tu [29:34]
• On teachable moments: "Share the knowledge. When you hand over the funds you’ve worked hard to create for them all their lives, you can trust that they’ll know how to manage and invest it well.” — Vivian Tu [33:48]

Q&A Segment Highlights

Do children inherit parental debt?

• [38:55]
  • “Children are not personally responsible for their parents’ debts… The only time they are responsible is if they co-signed anything with you…”
  • Debts are settled from the estate before any inheritance is distributed.

Useful Resources for New Parents

• [41:45]
  • Child tax credit (up to $2,200 per qualifying child as of 2025)
  • Child and Dependent Care credit (covers daycare, nannies, after-school care, some camps)
  • Adoption credit and exclusion for adoptive parents

Tax-Advantaged Ways to Gift Money

• [44:50]
  • As of 2024: $18,000 per person, $36,000 per couple, per child per year—without triggering gift taxes.

Types of Trusts Explained

• [45:55]
  • Revocable trusts: Flexible, changeable, good for privacy and probate avoidance, but offer less tax benefit.
  • Irrevocable trusts: Rigid, can’t be changed, but protect assets from creditors, lawsuits, and may reduce estate taxes.
  • Other types: Spendthrift (restricts spending), land trusts (for real estate), Medicaid trusts, generation-skipping trusts.

Practical Takeaways

• Start Early: Don’t wait to add kids as credit users or to open 529s—the earlier, the better.
• Even Small Steps Matter: You don’t need to be wealthy to use these strategies; even modest actions can make a difference.
• Educate Early and Often: The best legacy is both money and financial literacy.
• Get Legal Help When Needed: For trusts and more complex strategies, investing in professional advice is worthwhile.

Useful Timestamps

• 05:10 — Credit as authorized users
• 12:00 — 529 plans explained
• 17:45 — Rolling unused 529 funds into Roth IRAs
• 22:08 — Custodial Roth IRAs
• 26:09 — Explaining trust funds
• 31:48 — Teaching kids about money
• 38:55 — Inheriting parental debt
• 41:45 — Tax credits for new parents
• 44:50 — Annual gift tax limits
• 45:55 — Types of trusts and their benefits

Final Thoughts

Vivian wraps with encouragement and humor:
“You don’t necessarily need to already be super rich in order to get things started for your little one… Doing something is certainly better than doing nothing.” — Vivian Tu [53:42]

She plugs her forthcoming book, “Well Endowed,” for more step-by-step instructions and details on trusts, 529s, custodial Roth IRAs, and more.

For anyone wanting practical, accessible steps to set up their kids (or future kids) for financial success, this episode is packed with tactical advice and delivered with Vivian’s signature mix of wit, warmth, and actionable tips.

Resources Mentioned:

• RichBFF Book - Well Endowed (Pre-order)