Honestly that number seems way too high.
He may be accounting for two kidsā¦
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That would be great too. My original plan had been to put in more money (my son got a gift long ago that was supposed to go into a college fund, but we never moved it in there), and split half-half between Amazon and Market fund.
I expect Amazon to grow faster than 8% in the next 4 years, but I donāt want to put all his āeggsā in āone basketā
This is because tech has been on rise recently. If you favor one sector, you have to be careful. VTI is fire-and-forget. If you can monitor and adjust ONEQ or other targeted funds are great.
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Great, Got it, Thanks.
All your eggs in one basket is principle not to follow, you guys investing your hard earned money should know that. Diversify or you will burn in one market crash.
WOOHOOO! Got 2 shares. 
Now every time I buy something on Amazon, I can feel like Iām contributing to my kidās college fund.
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I chose Utah 529 for my older child bcos of international exposure and Nysave for younger child due to lower cost. I see that california 529 now has lower cost and international exposure - may have to reconsider.
You want to select a passive age based plan - something that assumes more risk when child is young and less risk when you need the money. They do this by changing the %stock vs % bond.
Invest in individual stock only if you plan to pour over the 10k filings of companies every year. What if Amazon ends up like Enron when you child needs the money?
For those not using roth ira for retirement, you can use that instead of 529. Roth money doesnāt show up as parents assets in fafsa and the principal can be withdrawn anytime. Some people prefer roth bcos it gives more flexibility. I prefer using roth for retirment.
I believe some people are buying up rentals to fund kids college in this forum. How do you plan to use your rental for kids education - sell off or assume cash flow in future will pay for tuition? Are there tax advantaged techniques you can avail?
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I was the one who jokingly said I will pay for my kidsā college with rentals. I am not sure my rentals will generate 90k x 2 per year in 10 to 15 yearsā time. Maybe they can, but I doubt it. My thinking was that if necessary I will just sell one or two houses and that will for sure cover college expenses. If I sell there isnāt any tax efficient way to do it AFAIK.
My main reservation about 529 is that my money will be siloāed into special purpose funds. What if my kids decided to pull a Bill Gates or Mark Zuckerberg? What if they turned out to be super talented and got full scholarships? Also, investment options are limited and I canāt do margins. The potential savings is the 15 to 20% capital gains tax which will likely go lower under Trump.
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I explained above the dangers of 529. Your kid may end up being a bum, get a girlfriend pregnant, never go to college, etc.
You also, unless you are a gambler, will never invest your $ where it can be wiped out by a market crash. I know it sounds negative, but history tells us thereās always something we didnāt see coming wiping out our investments/savings.
Also, you have to deal with the present tax situation, as in the real estate market, you better not try to predict, or try to pull out your crystal ball. Deal with the present because at the pace we are going somebody has to pay that national debt and that aināt going to be the rich peopleās taxes which are already lower via loopholes but higher taxes from you and me.
Wouldnāt be good to invest your money, get x% but your principal is never risked?
By the way, we are in the threshold of witnessing the gathering of the ingredients of the recipe for the next recession. Trickle economy hasnāt worked, and never will. Look at the $ trillions stashed overseas.
Unless you believe, as some ignorant guy said that the stock market gaining what? 2-3K points is paying the national debt. Recognition for a Nobel prize in economy, I am telling yaā¦
First, why do you need 90k/year for two? Assuming UC, with 3% inflation, it may reach 60k max in 10 years.
Then, it must be 60k * 2 (person) * 4 (years) = $480000. Assuming 15 years including the years of study, if someone invest $1500 per month and grows the amount at S&P rate (7%), they will get $475000 by end of 15 years using 529 plan.
All you need to find is a rental home which gives $1500 cash flow positive and pay full cash right now. Take the profit and contribute to 529 plan.
Education at 3% inflation? Itāll be much higher than that. 5% minimum unless it suddenly gets difficult to borrow money for college.
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I looked at IUL that you are proposing. Looks like you can borrow against the cash value of the insurance. But doesnāt the cash value depend on how the insurance invests your money? Most likely they are investing in some blend of stocks/bonds. The returns would be lower after the insurance takes their management fees - why would you not do it yourself through low cost index fund?. Am I missing something?
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You need to look at risk adjusted returns. Investors usually use sharpe ratio or sortino ratio(more accurate)
The ratio is basically = (Return - risk free rate)/ portfolio standard deviation.
Higher the ratio implies you have more returns for less risk.(which is good)
Below is backtested portfolio comparing QQQ, SPY and BRK.A( berkshire) from 2000 to 2017
QQQ return = 11.75% but sortino ratio = 0.43.
SPY return = 8.75% but sortino ratio = 0.47
BRK.A return = 9.93% but sortino ratio =0 .65
If you have to pick one stock ā loks like BRK.A or BRK.B is teh way to go!
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I thought it could be used for siblings and for first-time buyer house-payment. Is the latter not true?
Thing here is that my kids were given gifts from a deceased relative intended for college. I feel that in the spirit of the gift, it should be invested into a college fund.
Canāt you take out a loan from the appreciation to use it to pay for college immediately? A loan that would leave you at break even with the mortgage-insurance-taxes vs. rent payments?
Is it tax-free if someone does that on any house (their own for example)ātakes out money from the value and uses it for college?
According to some folks, that is Commander In Chief materialā¦
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Borrowing against the house is tax free. So yes that would be another route, assuming I can still borrow at that time.
True, you reminded my favorite BRK.A/B, missed my mistake, this is stronger than SPY.