Child’s Education
Keeping ahead of escalating college tuition

The future always presents opportunities, as well as a degree of uncertainty. As young parents, one of those uncertainties is the cost to educate our children. We can look at present-value, apply an inflationary factor and make certain assumptions about the supply and demand of a continued education, but in the end, there is no fixed formula that will let us know what it will cost to educate our kids.

Start Investing Today!  
View Our Top 20 Holdings
Need Assistance? Contact Us

Even though little Johnny or Suzie may be excelling in the third-grade science fair or on the Little League field, one should not assume that a scholarship or grant will lessen the burden of college tuition. You must have a plan - one that is realistic, attainable and is built around certain “worst-case” scenarios.

Here’s an example:

Let’s say the average four-year tuition today is $80,000. Let’s assume that you have 13 years until the first tuition bill is payable. Sounds like a lot of time, right? Wrong. Let’s assume that college costs will increase by a factor of just 3% per year, on average. That means the same $80,000 tuition is going to cost $117,482 by the time your child is ready to go to school. Thirteen years is a mere 156 months. So - starting TODAY, you would need to save $753 per month to cover those costs. Sounds steep, right? For most Americans, it is. But help is on the way.

Why not let the stock market help you? Let’s assume (as it has been for the past 100 years or so), that the US stock market rate of return will average 8% per year. Granted, there are years that are better than that, but there are certainly years that are worse, so let’s use 8% as a good average over the next 13 years. If you invested in ETFs or a well-diversified portfolio, and compounded your investment at 8% per year, you could achieve the same goals that $753 per month would have generated - for a much lower savings of just $430 per month. A simple 8% rate of return (albeit - never guaranteed) could reduce your necessary monthly budgeted allotment by $323 (or 43%). That is a savings of over $67,000 on the same $117,000 education costs (excludes MSF fees and long-term capital gains tax). See your financial advisor for more details.

A word of caution!

But - just remember. Every month you delay, every month you “procrastinate,” the monthly budget needs to increase accordingly. With an at MyStockFund, you can start this process immediately and set your AutoVest Schedule for $430 per month to be automatically deducted from your checking or savings account on a monthly basis. Tell us which securities you would like to invest in, and we’ll do the rest. It is simple, easy, affordable - and CRITICAL to your child’s education. Stop worrying - start doing. MyStockFund, and the stock market, can help!

Open An Account  
Go Back To Personal Planning