Whether you are a parent looking to invest in your child’s future, or a student looking for some ways to grow your money to pay for college, you are going to have some options to you. While there are many investment vehicles out there, there are some that are better for paying for college than others. It really depends on when you start, and how much you need to save up.
If you are a parent who has just started a family, you might be interested in starting up a 529 account for your child. You can pay it all now, or you can have a set amount taken out every year, and there are tax advantages for doing it either way. You can start as soon as you have a child, or know that you will have a child, and is a great way to make sure the money isn’t lost along the way.
For a student that is looking to sock some money away, what about getting a certificate of deposit, or a savings bond, from the bank. These are two really safe investment plans that will give you a guaranteed yield and you will know how much you are going to get. The two biggest benefits are that you are going to keep your money safe, and you get more money for school through accrued interest.
It is always a good idea to look to the stock market to get some cash for school. While the market itself can be a tad risky, there are ways to overcome this. A great idea is to buy into mutual funds because they contain a lot of diversity. They are individually managed, and buy stocks in many sectors to overcome being devalued due to any one stock doing poorly at a given time.
The advantage of investing in stocks and bonds is that you can make interest off your money, and you can get decent returns on your investments. If you have twenty years to kill before having to pay for college, you could have doubled your money twice as stocks tend to average about 10 percent returns per year. Not bad if you are playing your cards right.
College is something that you are not going to be able to avoid if you want to get a good job in a tough market. It is very important to figure out a way to pay now, so that you don’t have to worry about paying for it later.