I'll make this short, just looking for some general advice here. I want to start saving for my kids college. They are 5 months old and two years old. Whats best route to go about this? I don't know **** about investing I'll be honest.

I just need a place to start so I can go from there.

college choice 529 direct if its available to you.

Save for retirement instead, and send them to college in europe

Different countries/states/provinces/etc offer different investment options, and usually the advantages are tax related. Google and take a look to see what applies to where you live.

If you're American, Clark Howard has the best college saving advice I've seen...go to his website.

Or just have them go to a state school and use the $$ you would've spent to help them later with a house down payment.

Asia you mean.

This may be a weird stance but I would seriously question the assumption that both kids would be best going to college, higher education in America certainly has value sometimes but there's plenty of career paths / life situations where it doesn't make much sense to go to college (examples would be if you can't get into a highly prestigious institution, want to be a programmer, malcontent personality type). Within my group of "successful" friends, I would say it's only about 50% who have significantly benefited from their degree (and who knows what else they could have done with the money and years invested in college). Obviously this is not a sample size but it's a trend I think we can expect to continue.

I don't know much about how these investment vehicles would be affected by not using them but something to strongly consider while doing your research (and even comparing non-college specific investment options).

And within my circle of friends it would be nearly 100%. There are a lot of variables to these equations. Also, for those people that received a degree that they are not directly benefiting from I struggle with the idea that they are not truly benefiting in some way. I have met very few "uneducated" people that are as well rounded as those that have received post-secondary education.

Agreed 100%

There's a big question of cause/effect that goes into that. If as a society we're lead to believe that university is an integral part of modern life it would be pretty bold to go against the grain, so most highly capable people do it even if they have reservations about the value proposition - since if you're exceptionally capable it'll be a breeze and the financial sacrifice will be a drop in the ocean.

But I think it's more than that... there is no other point in a person's life where they are fully dedicated to learning and growing as a person. The ancillary benefits of the college experience are high. Whether you are learning something relatively useless like Art History, or something practicable like Law or Engineering, there is still tremendous benefit to the experience.

I didn't read Job's biography, and know little about him, but he is one of the most famous college drop outs and I've still read a number of quotes where he references a class he took in University.

I think it's very hard to quantify the lifetime value of education. Having said that, what you guys pay in the US for education is ****ing crazy.

I mean saying everyone will be fully dedicated to structured learning during that period is a really big stretch, a huge amount of people dick around during college. People who are interested and capable tend to make great strides regardless of whether they are in college or not during this time in their life (as Jobs demonstrates).

MarkD I feel like you're referencing an Ivy League experience (accurate?) where 100% are getting significant value from their degree.

I think saying it's a small cost is really understating it, 4 years of time and money is a huge opportunity cost. That's enough time to have made significant strides forward in your career if you started working early. It does restrict you from some career paths, but it certainly doesn't restrict your from making top dollar. Again, not saying you should turn down an Ivy offer but it's far from a layup for 90% of the population.

An interview that touches on a few of the bigger issues,

https://www.youtube.com/watch?v=kMAm2u_J50g


To add to that, what I think is often overlooked is which groups of people tend to benefit most from which degrees. I've found very little research that tries to answer that and it's depressing that regulatory boards have done so little to protect people. There's almost no attempt to discourage people who will have a negative experience from registering, and it's because the schools have very little incentive to care.

The important thing to consider is you shouldn't assume that because the schools offer the program that it's necessarily a good buy.

No, I wouldn't comment on that as I'm from Canada and my only experience with post secondary education is from that perspective. Also, I went to University from 1997-2002 and the total cost of my degree was probably less than $50K including housing and living expenses. Tuition was probably $6k/year. These numbers are just from memory so there is a probability that they are quite wrong, but I know I graduated with $20k student loans.

I recognize that the costs of education in the US are significantly higher, and that would definitely skew the results.

I wouldn't disagree with this, but I would say that it is highly unlikely that many people are embarking down a productive career path at 18 in any field. There is obviously an opportunity cost, but again, it's hard to quantify in my opinion, because from my experience very few 18 year olds are moving forward in a career path that provides significant opportunity and university (or even trades / tech degrees) provide a path they can use to guide them in a direction.


Agreed. For the right people skipping university would be the right decision - either because they are motivated and driven towards an entrepreneurial pursuit, or because they would dick around. But, I feel like these people would be on the tails of the bell curve representing the general 18-20 year population.

Thanks for the few places to start, I did request a packet and filing papers from my state for the 529, this will at least get me started and while I wait for that I'll try to do more research on the topic.

I myself did not graduate college and it's something I wish I had done, I feel like I would have benefitted from it more so than just a degree.

I just want my children to be able to have the opportunity if they choose. My families finances have vastly improved over the last few years and with no real debt lurking over us, I think this course of action would be better served than wasting money on other things.

What state are you in?

You say it's hard to quantify the opportunity cost, but the benefits of the degree are equally difficult to quantify and there's a lot of research out there that suggests a very significant percent of people are having a negative experience - not just the tail ends.

There're a lot of credible people who're saying these things - it's not just random wackos on the internet.

Yes, I have certainly read this, and I'm not going to argue against it. Those people are certainly smarter than I am, and have probably thought about it more than I have. I was only speaking from my own experience and my own circle. The economic value and opportunity cost of a degree in Calgary (where I live) is certainly going to be different than in Miami or San Diego or even San Francisco. And the value of a history degree is certainly different than the value of a computer science, engineering, law, or medical degree.

I certainly don't fully disagree with college being a waste of time, but I also don't think it's a black and white issue. I think it's very complex and there are a lot of variables that need to be weighed.

Hopefully this doesn't bite me in the ass, but instead of specifically trying to save for college, I'm trying to make sure my children have good study habits and a positive school experience, so when the time comes they can get scholarships. Many of my friends got full or partial rides based on exceptional PSAT scores; my special lady friend was offered a full ride at two decent schools just based on her grades; I got a scholarship for 2 years (but I blew it after only one semester!) and when I returned to school years later I got a few tiny grants ($500 and $1500) and a few interest deferred loans which was enough for my in-state tuition, etc. But some of that comes down to the genes; if one or both of your kids is as sharp as a bowling ball, this method may not work! But sometimes even knuckleheads get scholarships - my father was a C student with horrible test scores, but he got a work/study scholarship for athletics that provided him with room and board and tuition in exchange for a couple of semesters of part time work at the university.

Minnesota

Do not pay sticker price for any school, unless you have 8-figures. It's just not worth it, except maybe Harvard Yale Princeton (and even then it's close... if you have the resume to get into those schools, you can go somewhere else for free, saving yourself $300k in the process, and you'll still be successful). There are too many schools with too many academic/athletic scholarships and need-based aid to justify paying full-pop at any school.

I wouldn't be in a rush to save, either; the top schools give generous need-based aid, and cruelly, if you've saved for your children's college that will be counted against you versus families that haven't-- you will appear to have less "need". If your kids don't get into a top school, as I said above: you should not be paying full-pop, so that will keep the costs down.

As someone who is entrepreneurial, an iconoclast and a malcontent, I am more critical of the current college paradigm than almost anyone, but I still benefited from my education on the whole (with the added caveat that I paid a fraction of the sticker price), and I think an undergraduate degree is still the best option for most 18-year olds capable of accomplishing it (though between increasing cost and deteriorating quality, it's an unnecessarily-close call these days).

There should be other options, but between a four-year degree (which takes many people 6 or more) and not going at all, I think most young people today are better off with the undergraduate education... PROVIDED they choose the right school and pay the right price. Do not go out-of-state because it's "fun" when there are equally-good schools close to home-- you'll pay more for no good reason and if you're in a place you likely won't live for the long run, you're building roots that will immediately get torn up as soon as you graduate, which is really stupid at a time you should be establishing yourself as a fledgling adult. All the friends you made and invested in you'll end up seeing once a year or less after you're done school.

Don't party your face off. Take something challenging-- if it's interesting and esoteric that's fine, as long as it can feasibly be commercialized (art history at Harvard is a fine stop on the road to elitehood; art history at Idaho Directional will probably have you serving frappuccinos through your 20s). Don't pay more than you absolutely have to unless you are getting a phenomenal increase in quality of experience and reputation. Most importantly, go to a school at which you feel comfortable and would enjoy; that is way, way more important than the US News rankings. Successful people come from all backgrounds, including some really mickey-mouse colleges. People destined for success always make it there eventually; some schools can get you there sooner, but there's no need to pay tens or hundreds of thousands for a marginal improvement in your career prospects.

That makes sense if I knew what my kids would do in life and it was destined, but since I really don't know, I'd rather start saving and being somewhat prepared for whatever it is they decide to do. I'd imagine if either of them end up wanting to be a a little successful, having a a little head start would take a little burden off them.

529 is the standard advice, but if you're not using a roth ira already, I like the Roth option a lot. The nice thing about the roth is that if they decide they don't want to go to college, you can just use it for yourself for retirement with no penalty. This is especially true in MN, where they offer no additional state tax benefits for using a 529.

Just send them to St Cloud State, cheap enough