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Did you get the memo?
Join Date: Mar 2003
Location: Wichita, KS
Posts: 32,538
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Investment Gurus- I need advice
Question 1: With Christmas coming up, we suggested to my parents as part of our 20 mo old sons gift contributing to a savings account of some kind. When my wife was a child her grandparents bought her a savings bond every Christmas and B-day, but aren't there better options? What would be the best option for roughly a 20 year period of time? Bond vs CD vs mutual fund vs ?
Question 2: We plan on starting some sort of college/ general savings account, what are some good options? I know this may be somewhat state dependent, as they often advertise KS college savings funds, but before we go talk to our Waddel & Reed guy we'd like some impartial advice. We want something that will grow well with minimal taxes on the interest, but that doesn't have to be used for tuition when the time comes. Ideas? Thanks! 
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‘07 Mazda RX8-8 Past: 911T, 911SC, Carrera, 951s, 955, 996s, 987s, 986s, 997s, BMW 5x, C36, C63, XJR, S8, Maserati Coupe, GT500, etc |
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12-09-2005, 08:43 AM
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Location: New England
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Utah runs a really good college saving program. That's the one we use. The money grows tax free. And it can be taken out by the contributor anytime if circumstances change, as long as taxes are paid on the gain (I think). Your parents can put money in there too.
I was reading something about John Robert's (now Chief Justice Robert's) financial disclosures, and he uses the Utah program. Confirmed how smart I am 
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We will stay the course. [8/30/06] We will stay the course, we will complete the job in Iraq. [8/4/05] We will stay the course *** We’re just going to stay the course. [12/15/03] And my message today to those in Iraq is: We’ll stay the course. [4/13/04] And that’s why we’re going to stay the course in Iraq. [4/16/04] And so we’ve got tough action in Iraq. But we will stay the course. [4/5/04] Well, hey, listen, we’ve never been “stay the course” [10/21/06] --- George W. Bush, President of the United States of America |
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12-09-2005, 08:54 AM
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Unconstitutional Patriot
Join Date: Apr 2000
Location: volunteer state
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How many dollars do you plan to invest?
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12-09-2005, 09:22 AM
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Did you get the memo?
Join Date: Mar 2003
Location: Wichita, KS
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We would like to contribute $100 a month to start, after I graduate from college hopefully we can bump it up some. My parents would like to contribute $50-$100 every b-day and Christmas.
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‘07 Mazda RX8-8 Past: 911T, 911SC, Carrera, 951s, 955, 996s, 987s, 986s, 997s, BMW 5x, C36, C63, XJR, S8, Maserati Coupe, GT500, etc |
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12-09-2005, 09:34 AM
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Registered
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Location: New England
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Go to Utah's college savings plan site. Its perfect for your needs.
There are other websites that rate the various states' college plans, check those sites out too. Utah has always been in the top tier of state plans.
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We will stay the course. [8/30/06] We will stay the course, we will complete the job in Iraq. [8/4/05] We will stay the course *** We’re just going to stay the course. [12/15/03] And my message today to those in Iraq is: We’ll stay the course. [4/13/04] And that’s why we’re going to stay the course in Iraq. [4/16/04] And so we’ve got tough action in Iraq. But we will stay the course. [4/5/04] Well, hey, listen, we’ve never been “stay the course” [10/21/06] --- George W. Bush, President of the United States of America |
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12-09-2005, 09:39 AM
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Where is that wrench?
Join Date: Jun 2003
Location: Irvine, CA
Posts: 1,415
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Here is an article in Newsweek about 529 college savings plans:
http://www.msnbc.msn.com/id/9865075/site/newsweek/ |
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12-09-2005, 11:18 AM
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Unconstitutional Patriot
Join Date: Apr 2000
Location: volunteer state
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For monthly investments, mutual funds are certainly attractive. A no-load mutual fund won't charge fees to buy. You will pay some taxes at the end of the year. That's the downside with mutual funds--they can be inefficient with taxes.
I would say an 8-10% return is conservative, which means your investment doubles every ~7-9 years. In 18-20 years, your son will have a nice sum to help with education or other needs. The Utah college savings plan does look nice. |
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12-09-2005, 11:57 AM
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good start. my parents saved everything. i had rocks and dirt as toys. frugal has hell, and i hated it. till she gave it to me for a downpayment on a california home. love those people!
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12-09-2005, 12:28 PM
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Did you get the memo?
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Location: Wichita, KS
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Rocks and dirt, that's great. I was about the same, except my parents didn't save any either. I'm not repeating their mistake.
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‘07 Mazda RX8-8 Past: 911T, 911SC, Carrera, 951s, 955, 996s, 987s, 986s, 997s, BMW 5x, C36, C63, XJR, S8, Maserati Coupe, GT500, etc |
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12-09-2005, 12:35 PM
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Quote:
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My work here is nearly finished.
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12-09-2005, 12:35 PM
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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
Posts: 51,063
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How bout buying a Share of XOM or CVX , and putting the dividends into an automatic Dividend Reinvest program.
The share price is now around $60 a share...buy a block of 10 shares and add one every quarter... Mother did that for me back in 1967...10 shares XOM and 10 shares CVX...$1500 total investment....today worth $31,000 (no dividend reinvest) plus both companys have paid a Dividend every quarter since 1967 ...today the divends are about $600 a year.
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12-09-2005, 12:42 PM
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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
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Quote:
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Copyright "Some Observer" |
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12-09-2005, 12:44 PM
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Did you get the memo?
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What are XOM or CVX? How about a share of Porsche?
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‘07 Mazda RX8-8 Past: 911T, 911SC, Carrera, 951s, 955, 996s, 987s, 986s, 997s, BMW 5x, C36, C63, XJR, S8, Maserati Coupe, GT500, etc |
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12-09-2005, 12:46 PM
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Registered
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sad to say, two hellion boys can do some serious damage with rocks
 mom was not proud..
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12-09-2005, 12:47 PM
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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
Posts: 51,063
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Exxon Mobile = XOM
Chevron = CVX You want a low Beta stock...not terribly risky, and with a PE ratio of about 12% on XOM how can U go wrong...price appreciation plus 1.9 % Dividend....not terribly exciting like watching the grass grow...but steady as they come...and thats what you want You have to pay Income tax on the Dividend...unless the shares are bought under a Tax Deffered program...and no Capital Gain Tax until you sell the shares...regardless of the program..
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12-09-2005, 12:52 PM
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Southern Class & Sass
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You're really going to trust the feedback you get here?
 There are many things that need to go into what is the best answer.If you're young, perhaps a 529 plan would be best (Until Hillary does not extend Bush's tax package that is...) I bet Kansas has one, And I suspect Kansas even lets you deduct it off your State income taxes. Then again, if you're older, and have small children, you'll want to concentrate on retirement accounts, and paying off your mortgage. Why? Well, you can always get college funding (loans, grants and scholarships) but you can't get a retirement loan. Plus, legally you have to take money out of your differed savings plan (based on your age). You can always use some for tuition. Keep in mind that the value of your residence does not factor into getting grants, but money you've saved for sending junior to college does. Now if all you want is opinions on an investment choice, I'll give you one. I-bonds.
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Dixie Bradenton, FL 2013 Camaro ZL1 |
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12-09-2005, 01:41 PM
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Unconstitutional Patriot
Join Date: Apr 2000
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I like tabs' idea, but brokerage fees will eat up a fair portion of the investment. The best trading fees are ~$7 per trade, unless you go with one of the ultra-low fee brokerages like Interactive Brokers. However, IB has a hefty minimum balance.
I believe a plain vanilla Index or Total Stock Market fund is ideal. There is little to manage, and your return is equal to the market. I would not use I-bonds for long-term investments. Your return is only 1% over inflation. For protection of assets, I-bonds are great. For wealth-building, I'm not so keen, but that's just me. jurgen |
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12-09-2005, 02:04 PM
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Did you get the memo?
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For a bit more clarification, we're 25, don't own a house currently, and almost have our only debt (4Runner) paid off. We both have Roth IRAs, and a mutual fund, and as soon as we have the stupid 4Runner paid off we plan to contribute to them on a monthly basis. Tabs has a good idea, but I agree with the others, we are not yet able to afford to buy stock on a large enough scale to make it worth the fees.
I'll look into 529 plans for our college fund, but what would be the best route for my parents, chipping in a few hundred a year? Would it be worth them opening a CD for our son, or just buying bonds?
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‘07 Mazda RX8-8 Past: 911T, 911SC, Carrera, 951s, 955, 996s, 987s, 986s, 997s, BMW 5x, C36, C63, XJR, S8, Maserati Coupe, GT500, etc |
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12-09-2005, 04:35 PM
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Location: New England
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Unless your parents want a seperate account, they should just contribute to the college fund you establish. Otherwise, at the levels you are talking about, savings bonds are fine in my opinion.
With all due respect to some smart people here, opening a stock trading account makes little sense for you right now. Let a professional handle it in a fund. Congrats on starting early. Keep it up!
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We will stay the course. [8/30/06] We will stay the course, we will complete the job in Iraq. [8/4/05] We will stay the course *** We’re just going to stay the course. [12/15/03] And my message today to those in Iraq is: We’ll stay the course. [4/13/04] And that’s why we’re going to stay the course in Iraq. [4/16/04] And so we’ve got tough action in Iraq. But we will stay the course. [4/5/04] Well, hey, listen, we’ve never been “stay the course” [10/21/06] --- George W. Bush, President of the United States of America |
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12-09-2005, 04:57 PM
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My Camaro
