I have just the no-loss investment plan for you. Just send your $10,000 cheque to....

[quote=Anonymous]I called College America Fund to find out about 529 plan not prepaid ones.
When I asked her if I put 10 k and market not doing well will I get at least get my initial 10 k back ? She saying it is possible that you may not get initial deposit is it true ? So 529 risky ? I thought it’s is safe and risk free college investment. Somebody help me to understand it need to open college fund ,[/quote]

Is this a joke?

Of course if you buy a stock or mutual fund trading at $95 per share or unit it can go down or up. Hopefully over 10+ years it ends up up considerably.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If you want security, put it in a money market inside the 529. Most 529s are in market funds, so of course they can go down.

With the interests so low, what is point of using a 529? I guess there may be some state tax benefit.

Tax advantage and tax free growth.

NP. But there will be practically no growth. And the biggest tax advantage is the tax free growth over time. The benefit with the initial contribution is relatively minor.

We used the MD prepaid tuition plan for all three of our kids. We were actually able to pay for 5 years of college instead of 4. Total cost was $150K.

We also used mutual index funds to save more money and plan to use it as required for college. I did not like the concept of 529 because the timeline for it was not very long for us and there was a chance that we would lose money. I did not want to be in a position that my kids did not go to college because the market crashed.

Please do not use a broker for a 529 plan. Set it up yourself and send all the money directly to the plan. A broker will take a chunk every month, and that's $$ that's not going to your kid's college fund! Even if it's "only" $15 a month, over 18 years that's $3,240, not to mention the additional loss of compounding on that $$.

[quote=Anonymous]Like people before have said, yes, you can lose money. I started when my DCs were young so fairly long time horizon, so good chance for positive return by the time they go to college. I have a 529 where they automatically move to more conservative investments as college approaches.[/quote]

Thank you finally someone answered my question. And not here to check on my grammar skills , my age or financials education .
I might look into prepaid options seems the best as of now . Although initially I wasn’t really thrilled with their restrictions .

Like people before have said, yes, you can lose money. I started when my DCs were young so fairly long time horizon, so good chance for positive return by the time they go to college. I have a 529 where they automatically move to more conservative investments as college approaches.

No one is going to lose their entire 529 buy-in. Even if the market takes a real dive.

If the fund(s) you invest in lose value, your 529 can lose value. The riskier the investment, the more likely that you might lose value, especially in the short-term.

The benefit of a 529 is tax-free growth, as well as any deduction you get from investing in your state's 529 plan.

Anonymous wrote:

Anonymous wrote:If you want security, put it in a money market inside the 529. Most 529s are in market funds, so of course they can go down.

With the interests so low, what is point of using a 529? I guess there may be some state tax benefit.

Tax advantage and tax free growth.

Anonymous wrote:If you want security, put it in a money market inside the 529. Most 529s are in market funds, so of course they can go down.

With the interests so low, what is point of using a 529? I guess there may be some state tax benefit.

You may be a good candidate to use the prepaid college tuition plans. You are unlikely to ever lose money with those. 529 plans uses mutual fund, if your time horizon is not long enough, if you can lose money.

Of course you can lose money if you invest in risky stocks. But over time you will likely gain money, just like other investments.

If you want security, put it in a money market inside the 529. Most 529s are in market funds, so of course they can go down.

I called College America Fund to find out about 529 plan not prepaid ones.
When I asked her if I put 10 k and market not doing well will I get at least get my initial 10 k back ? She saying it is possible that you may not get initial deposit is it true ? So 529 risky ? I thought it’s is safe and risk free college investment. Somebody help me to understand it need to open college fund ,