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investing for private school?
08-31-2014, 06:29 PM
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#1
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Dryer sheet wannabe
Join Date: Apr 2010
Posts: 23
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investing for private school?
What is the best way to invest for private school?
I just sold a house and cashed in on 140K, I need to pay 20K for the next 7 years starting next august (2015). What is a reasonable way to invest this, so I can withdraw 20K every year, plus have some growth to allow for inflation of tuition.
Thanks
Norisk
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08-31-2014, 06:36 PM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2007
Posts: 7,746
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Something with no risk. You have a fixed series of obligations. CD ladder, inflation linked bonds, something like that.
Personally, I'd take a shot on year 6 and/or 7 tuition and stick some or all of those funds in the market, keeping the years 1-5 money in no risk investments. Assuming I had some back up funds in place in case the market doesn't go up within 6 years.
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Retired in 2013 at age 33. Keeping busy reading, blogging, relaxing, gaming, and enjoying the outdoors with my wife and 3 kids (8, 13, and 15).
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08-31-2014, 07:43 PM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2005
Posts: 10,252
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K-12? or College?
K-12, one can use an Education Savings Account, but the contribution limit is low, something like $2,000 a year. I'd invest in a Vanguard LifeStrategy fund and just go with it.
College: 529 plan.
Note that one can give lots of money to the kid who can earn something like $2,000 tax-free from investments each year, so just just giving some money to kid to invest each year and cashing it in before gains are more than $2,000 and reinvesting could be worthwhile.
But, there will not be big gains unless one takes big risks. If the money does not gain or if there is a small loss, would that be a problem? Or would normal cash flow pay for education?
Vanguard LifeStrategy Moderate Growth would be OK if one if comfortable with risk.
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09-01-2014, 01:38 AM
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#4
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Dryer sheet wannabe
Join Date: Apr 2010
Posts: 23
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it is K-12, actually will be 6-12.
what does this mean exactly?
Quote:
Originally Posted by LOL!
Note that one can give lots of money to the kid who can earn something like $2,000 tax-free from investments each year, so just just giving some money to kid to invest each year and cashing it in before gains are more than $2,000 and reinvesting could be worthwhile.
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with CD rates so low, I am looking for something that hopefully may be a little higher than CD rates, but lower risk than market.
Does anyone have any experience with structured products? Like those CD-type things that have some downside protection and upside potential? Of course there is no free lunch, I understand, but just checking if there is something our there that I might not know about.
Thanks again.
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