How To Compare Your Investment Options For College

2006-08-21

The cost of education has continued to increase in the last few decades, and it is critical for parents to invest in the future education of their children. This should be done as soon as the children are born. Parents who wait to invest in the future education of their children will find that the path to success will become more difficult. Because of things like inflation and the rising cost of tuition and books, parents will need to do more than simply put $100 per month into a savings account until their child turns 18. While this worked in the past, it is no longer enough to insure that you will be able to afford the future cost of education.

When most parents think of investing for the educational future of their children, they fail to follow the 80/20 principle. They do what 80% of the population is doing instead of what 20% of the population is doing. In most cases, banks will suggest that parents open savings accounts, or even stocks and bonds. Stocks are highly volatile, and savings accounts or bonds may not take inflation into consideration. Many finance experts will tell you that the longer it takes for you to need the money, you can take more risks with it. I strongly disagree with them.

Parents should not gamble when it comes to the future education of their children. It is better for them to stick to long term investments that are safe and guarantee a certain amount of interest each year. When you take this avenue, you can sit down and calculate the exact amount of money you will be able to save in 18 years along with the cost of inflation. When you put your money into investments that are volatile, it will be difficult for you to calculate how much you will be able to save within a given period of time, because you will have a much higher chance of losing more money.

Continue to Part 2 of How To Compare Your Investment Options For College

Copyright 2006 Finance News Today. Articles can not be copied, reproduced or redistributed without written permission from Finance News Today. To request reprint permission please email us at info@financenewstoday.com

College Planning

How To Compare Your Investment Options For College
The cost of education has continued to increase in the last few decades, and it is critical for parents to invest in the future education of their children... Read More