Author Topic: Investing for my kids  (Read 417 times)

87tweetybirds

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Investing for my kids
« on: October 19, 2017, 09:10:02 PM »
Hey MMMers,
Sorry if there's already a post about this, if so please direct me there.
My DD is 2, and since she was born we've been saving about $100 a month in a savings account. It's finally reached nearly $2000, and I'd like to put it somewhere it can earn more interest. I've been investigating the 529 option, and it looks like a good option as long as she decides to get a higher education(something we do plan on strongly encouraging). I especially like that it can be a tax deduction, and no taxes paid on withdrawal either. I just don't want any savings we've socked away for her to count against her when it comes to scholarships and financial aid, or to have it count as minimally as possible. I was able to get through my Bachelors degree with no student loans and mostly paying for housing, food and books from my savings and jobs, and am hoping that she will also be able to receive scholarships to help her do the same.
I guess my question is if we invest the saved money into a 529, will it count against her when the time comes to apply for scholarships and financial aid? And what if she is able to get a full ride scholarship, what kind of options would the 529 have as far as being able to use it for other things.
-My parents had purchased stock in my name, and when I didn't use it for school I was able to use it to help with a down payment for a house just as the housing market started to recover in my area, which has turned into about a 33% return on my investment as we are preparing to sell said house. I don't want to put this money into an account that should she be fortunate enough not to need for school won't be able to be used for other opportunities.

What thoughts? Ideas? Suggestions?

waltworks

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Re: Investing for my kids
« Reply #1 on: October 20, 2017, 08:48:47 AM »
A 529 is really only useful if you have already filled up other tax advantaged (IRA, 401k, etc) space. It should probably be your last priority, because there are many other ways to save tax-advantaged money - and money is fungible, so you can help pay for DD's education regardless of whether you have a 529 or not.

Regardless, get that $2k *invested*, a savings account is just money storage, not investing. You have some time for that money to grow, you probably want it in the most aggressive (90+% stocks) vehicle you can.

-W