Advisors legally can not set up their pay based as a % of profits. Most will do a % of your total assets (I think 1% or less is reasonable).

Would you assume someone like that is valuable with the amount I'm mentioning? I only ask because I would imagine if there a huge success everyone would have one right?

Don't assume everyone would have one just because they are a success. At the risk of seeming like I am cocky or feel I am smarter than anyone I'd like to remind you how stupid a lot of people are.

Yes a good advisor can add value, but I have a VERY biased opinion (hint, hint).

I am sure others ITT will say differently, but I am sure if you create a thread asking if you should pay a doctor to perform a heart surgery that you need or if you should do it yourself you would see both arguments presented.

Thanks I'll look into and interview a few see what they say.

Yeah. This is the part I was somewhat worried about, even though it seems silly. Lets say you amass 150k for 2 kids going to college, and they both get scholarships.

Woops. You're just out 15k. I guess it's silly to think like that, I don't know.

Yeah you can let it keep growing indefinitely and give it to grandchildren, at least in my state's 529.

wil - they would just have a ton of money to spend on rent, eating, and their university laptop.

Hah. Yeah, I guess that's one way to look at it.

Actually, I think if the beneficiary receives a scholarship you can take out that much of the 529 without penalty.

http://en.wikipedia.org/wiki/529_plan

Nice, I didn't know that. Well, still the issue if them not getting a scholarship and you saving/growing it to 150k and they "only" spend 80k, you lose 10% of the leftover.

I was thinking of offering my kid a brand new car if they get a full ride into college. Not sure if that'll work.

Yeah...what I was wondering now is that tuition, room, board, books etc are all allowed expenses. I wonder how much leeway you have in writing her checks above her expenses and letting her stick it in savings. 70k over 4 years is like 1.5k extra a month....not sure how illegal that is and how audit likely that will make you

That's not a bad idea

A brand new car (something like 35-40k range) for a full scholarship is a lol steal compared to paying for the kid's college costs. Not to sound "old", but I distinctly remember University of Penn's tuition back in 1995 because 2 of our friends went there. It was 27k a year and I remember how we all remarked how ridiculous that was, and wondered what type of people could actually afford to pay that money out.

Just read Harvard is like 48k a year now or something absurd in that range. 200k to goto Harvard. Wow.

Yeah...I'm sort of hyper paranoid about this. My wife and I both went to Princeton, which isn't that bad in and of itself, but she has pretty strong legacy connections in addition to that. Both her parents went there and random paternal great uncles, 2nd cousins once removed etc have wikipedia pages based on their associations with princeton....so for better or worse my kids will have a better chance of getting than most random people. And obv I have to pay for it if they decide to go there....

Lol. Start saving! Haha I'm sorry man I'm not laughing AT you.. more like.. well, you know.

My Dad offered me a brand new car if I got a full ride to college. I ended up going to the school that offered me the absolute least amount of scholarship money (though it was the best school I got into). Parents ended up happier since my Dad didn't have to "buy me a new Porsche so I could get wasted every night in college and eventually wrap it around a telephone pole".

FR:

Be sure to sign up at Upromise. The savings they generate from discounts accumulate faster than you think. They also generate offers for discounted/incentivized 529s

Thanks for that tip copernicus. I was wondering if there were other outside bonuses to the 529 plan.

Yeah, my school was about that much and not nearly as good as Harvard, but I was still able to repay all my student loans < 10 years, including a deferment in the middle. Looking at the costs without the benefits is a bit silly.

Right now, say you borrow $200k over 4 years to go to Harvard, and you repay it over 15 years with no repayments while in school. If unemployed, you get to defer.

You can borrow now under that structure at 3.25%. You'll owe $1400/mo after graduating with a Harvard degree.
You get a tax credit on repaying your interest as well, and any inflation betw 2016 grad date and 2031 final repayment date makes the 'real' cost substantially lower even at 2% CPI.

If you take the 'fixed' option your rate drops to 2.75% today, and you pay like $50/mo while in school. This is easily doable with any summer/winter/campus job. [Source: Sallie Mae]

That would save you another 5-figures in interest. Again, with any sort of normalized inflation you're basically getting an interest-free loan that doesn't have to be repaid in full until 2031 AND a tax credit on your return if you make less than $75k.

It's one of the very best financial deals you will ever get offered in your lifetime, short of a prime mortgage.

Less than ~0.6% of college students with loans have 6-figure loans and can't get a job according to the latest data.

I have a bit of sympathy, unless they accrued the debts going to grad school, then it's on them and they get to live with the consequences of their decisions like the rest of the adults.

Didn't some of the Ivies decide to charge 0 to people making under 100K or something like that?

One thing you should consider is how financial aid is given out at universities. Maybe you expect to have a ton of cash and big income so it won't apply to you, but this applies to a lot of people. Basically, financial aid will just take all the money you have saved up and then start giving out grants for your 'need'. In contrast, the person who hasn't saved a dollar will simply start off by getting those grants. For lower income people, saving for college is basically wasted effort. Better to hide money into vehicles that financial aid does not consider (things like retirement plan, home equity - but I don't remember anymore) The system can be gamed by some people. I would read up on financial aid and how they do it these days to get exact details.

My GF and her mother are thinking of giving her 2 year old niece a small amount of money to start a college savings plan

As a birthday present
200-800 bux something like that

529 plan is the way to go in Louisiana?

The Louisiana 529 plan is Dale and LT22's college savings wet dream.