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Author: inparadise Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 8206  
Subject: Re: Anyone succeeded in paying for college? Date: 7/14/2014 3:50 PM
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Anyone succeeded in paying for college via investing (yourself or your child)? I would like to hear your story if you would share some details.

Yes, for two kids. Eldest costs us about $40K/year and we don't yet know how much Youngest will cost us, but we will pay it. It is their inheritance paid as a front load. Fortunately, Eldest will have just one semester to go when we retire next year, and we have funds in the bank for Youngest who will graduate high school next year.

I don't know that there is any magic to how we did this. Mostly, we are content with what we have, have not increased our standard of living since before the kids came along, when we went from two incomes to one. All raises and bonuses pretty much got saved, then when I became a SAHM I taught myself how to invest. Some luck along the way for sure, some stellar, some bad. I am a bit of a contrarian so the various bubbles bursting didn't hurt us all that much, in fact giving us the opportunity to put more cash into the market when people were fleeing. IMO with so many undisciplined non-professionals now investing their own funds in index funds, I think it's kind of dangerous to have much in them, though others will tell you it is the only way to go. I typically did individual stocks when I had the investments, which are now in the hands of a financial adviser, who invests in mutual funds.

I preferred to keep the funds under my control, skipping the 529 plans and focusing on coverdells. DH earns a solid pay in an industry that has continued pay raises, and so far after the first year paid by the coverdell, (we've been able to pay Eldest's costs from his paycheck, though that has effectively halted further retirement savings. We had the kids in our 30's and were well established in our careers/saving/houses by the time they came along.

We also put money into I bonds, which can be redeemed for college costs without federal taxation on income. Timing for that now is less than excellent, but we at one time were getting over 9% and still over 6% on most of the bonds. That along with the Coverdell should pay for the first two years of Youngest's schooling, the rest coming from savings.

So I don't know if that helps. Honestly, we are savers, frugal in our way, very low maintenance. Seeing my parents retire in their 50's, I've had early retirement as a goal since I was a teen, but very determined to pay my kids' college costs after seeing how hard it was to bounce back from paying my own way through college. We tend to evaluate discretionary spending in terms of is it worth working X number of months more if we spend that now rather than invest it? When you look at how much something costs in terms of compounded invested value 10 years down the road, it's kind of easy to pass things up.

Set goals, be disciplined, save, save, save and invest those savings. Be frugal and pay yourself in rising investments rather than new cars or fancy vacations. It is rare to be able to have everything, so set priorities.

Best of luck, and remember, the best things in life ARE free.

IP
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