cost of college

THATmanMANNY

Well-Known Member
Wild that your son is in college!

I also have a UGMA for the kiddos so hopefully their portfolio does better than mine over the next 10 plus years. Never sell! Accumulate!
 

fidodie

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But our Vanguard fund returned over 10% for 18 years. And that's including the massive drop in value over the past few months. My house hasn't gone up that much.
yes - but you would save the interest on a mortgage, and i don't think they attach your home equity to what you pay for tuition.
so perhaps you get a boost in assistance? that vanguard return is much 3% higher than the 18 year vanguard....we've taken about a 4% hit in NYSavers
in this downturn.
 

fidodie

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Staff member
i think i mentioned starting a roth for the kids - if they work, just put how much they made in a roth.
better than the gift thing! even better if you own a business, cause you can pay them for thinking.
 

Bike N Gear

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yes - but you would save the interest on a mortgage, and i don't think they attach your home equity to what you pay for tuition.
so perhaps you get a boost in assistance? that vanguard return is much 3% higher than the 18 year vanguard....we've taken about a 4% hit in NYSavers
in this downturn.
Assistance is a myth. Save as much as you can.
 

qclabrat

Well-Known Member
My parents had set one up for my son with Vanguard when he was born, so they got the deductions (in NY). After 18 years of monthly contributions we had enough for his freshman year with a few dollars left over.
you should check with your personal tax experts but i believe if you work in NY and live in NJ (as do I) if you contribute to the NY 529 you CAN take that as a deduction on your NY income tax return

at least that’s what i did for the last 18 years or so. now i have 2 of 3 kids in college (the 3rd is a HS junior) so the savings are just being depleted now.
@THATmanMANNY, good advice above
find a financial planner to find the best 529 for your situation, we used Nevada if I recall, but very limited since too much in 529 will effect financial aid. I highly recommend @Bike N Gear 's strategy to use family to feed into 529s for you since they don't look at the financials outside of the immediate family. At the end of day the school doesn't care who writes the checks to them. We also bought a bunch of bonds for them till they were about 5. Matures just when they need it the most, last year in school or graduate school if they go the route.
Also financial aid is sham for those living in the tri-state. Sucks that we have to compete with families who live in Nebraska in houses twice our size with half of the income.
 

qclabrat

Well-Known Member
yes - but you would save the interest on a mortgage, and i don't think they attach your home equity to what you pay for tuition.
so perhaps you get a boost in assistance? that vanguard return is much 3% higher than the 18 year vanguard....we've taken about a 4% hit in NYSavers
in this downturn.
If you look at your home as an investment, it will disappoint you. I wish I learned this earlier in life, been told your most expensive real estate should never be your primary home.
 

fidodie

Well-Known Member
Staff member
@THATmanMANNY, good advice above
find a financial planner to find the best 529 for your situation, we used Nevada if I recall, but very limited since too much in 529 will effect financial aid. I highly recommend @Bike N Gear 's strategy to use family to feed into 529s for you since they don't look at the financials outside of the immediate family. At the end of day the school doesn't care who writes the checks to them. We also bought a bunch of bonds for them till they were about 5. Matures just when they need it the most, last year in school or graduate school if they go the route.
Also financial aid is sham for those living in the tri-state. Sucks that we have to compete with families who live in Nebraska in houses twice our size with half of the income.
we did some sort of bond roll into our 529
 

fidodie

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Staff member
If you look at your home as an investment, it will disappoint you. I wish I learned this earlier in life, been told your most expensive real estate should never be your primary home.
i get it - but it is a great way to hide money. as you get to the end of a mortgage, the deduction is small (and i'm not a fan of paying $2000 in interest to save $600 in taxes) in a bear market - thing is, equity means borrowing power. asset backed loans are incredible cheap (home equity for example) - hell, rather than cashing in that stock that has gained so much which was planned for college, take an asset backed loan against it - they'll give you 50% of the value at the 30 day libor rate. (about $4/month on $1,000 atm) - over the average, the gains will pay for the interest, and still grow.
 

qclabrat

Well-Known Member
i get it - but it is a great way to hide money. as you get to the end of a mortgage, the deduction is small (and i'm not a fan of paying $2000 in interest to save $600 in taxes) in a bear market - thing is, equity means borrowing power. asset backed loans are incredible cheap (home equity for example) - hell, rather than cashing in that stock that has gained so much which was planned for college, take an asset backed loan against it - they'll give you 50% of the value at the 30 day libor rate. (about $4/month on $1,000 atm) - over the average, the gains will pay for the interest, and still grow.
I have a few relatives who saved well for their kid's education and lucky for them their kids got full rides and they ended up buying real estate with those savings. With some luck and good choices they are now set for life. I always joke about wishing my kids go in-state so I can buy a Lambo, but I rather have a condo in the city for rent.
 

fidodie

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Staff member
I have a few relatives who saved well for their kid's education and lucky for them their kids got full rides and they ended up buying real estate with those savings. With some luck and good choices they are now set for life. I always joke about wishing my kids go in-state so I can buy a Lambo, but I rather have a condo in the city for rent.
my dad got a pontiac fiero gt when i got my tuition covered after sophomore year. damn, wonder what he would of got if i was a bit smarter!!!

oh, it was a underpowered with a massive drop-throttle understeer problem, but it looked great!
both me and the car.
 

qclabrat

Well-Known Member
my dad got a pontiac fiero gt when i got my tuition covered after sophomore year. damn, wonder what he would of got if i was a bit smarter!!!

oh, it was a underpowered with a massive drop-throttle understeer problem, but it looked great!
both me and the car.
And this chart was over 10 years ago.
Triple of median income growth back then...
College-Tuition-Costs.jpg
 

fidodie

Well-Known Member
Staff member
And this chart was over 10 years ago.
Triple of median income growth back then...
View attachment 84521
if it is looked at as an investment, what is the return?
https://www.payscale.com/college-roi

this doesn't do enough math, cause it doesn't include alternate investments of the tuition, and drag the loan causes.
it also gives a cumulative $ amount, rather than a rate, or discounted cash flow calculation.

some logic, but still not enough: https://www.investopedia.com/advisor-network/articles/calculating-roi-college-education/
 

THATmanMANNY

Well-Known Member
Woah things got too smart for me haha

I guess there is not perfect way. Saving money is good PERIOD.

OTOH i will be giving Vanguard a call to set it up because I will hopefully going after a graduate degree soon and I want to open the 529 just for myself and immediate family use. Also, you damn well be sure my kids will be going to community college for at least a year before a “real” college.

Here are some myths about 529s
https://www.google.com/amp/s/www.sa...icles_html/7-myths-and-realities-of-529-plans
 
Since yours are still years away from college, you should keep believing this if it makes you feel better.:rolleyes:
Why? It's more realistic than some full sports scholarship or "my kid is going to Annapolis" pipe dream. Our son could have gone anywhere he wanted but chose community college first, now he's in Rutgers. Unless your kids are independently wealthy, they don't have much choice...
 

Bike N Gear

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Why? It's more realistic than some full sports scholarship or "my kid is going to Annapolis" pipe dream. Our son could have gone anywhere he wanted but chose community college first, now he's in Rutgers. Unless your kids are independently wealthy, they don't have much choice...
You said your son "chose community college." Good for him. My point was @THATmanMANNY thinking he had a choice was funny. Once your kid choses it's all over.