College 2020

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Megamill
Posts: 69
Joined: Sun Feb 11, 2018 10:44 am

College 2020

Post by Megamill » Sun Feb 11, 2018 11:11 am

Our oldest kiddo will be done with HS in 2020 and I never opened 529's because I just hated all the restrictions. I have i-bonds and UTMA accts for my kiddos, though which will probably cover the first year of tuition. We do have quite a bit of cash in regular (non-retirement) stupid savings accounts because we have been too scared to invest any of it so it has been languishing in sub-1% purgatory for the past several years. I call this our personal "lost decade"--i know, we are stupid fools that missed out on probably the best bull market of a lifetime. And i am the most stupidest because i personally just moved $100k that i had in my 401k's stable value fund into s&p500 index just days before the start of the huge swings we've been whipsawed with of late. So my question to all of you wise bogleheads is this: I was so ready to lump sum $100k into swppx or vtsax (taxable acct, non-retirement) at the same time i made the boneheaded move in my 401k, but did not because DH was not on board with it--he just did not 100% agree with it so i didn't do it. So thanks that, we can now make that purchase during this nice sale that is going on now on Wall Street. But the intention is to generate nice gains in the next 3-4 years for DS1's college costs and then further down the road, DS2's college costs. Is this a good strategy or confirmation that i am the absolute stupidest ever? i.e. is 3 to 4 years time horizon too short for such a move?

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beyou
Posts: 2903
Joined: Sat Feb 27, 2010 3:57 pm
Location: Northeastern US

Re: College 2020

Post by beyou » Sun Feb 11, 2018 1:04 pm

It is too short a time horizon to invest in stocks, IMO.
I would use a fixed income fund fo college at this point.

I had 529, and it worked out fine for us, not sure why you think it so restrictive.

chevca
Posts: 3071
Joined: Wed Jul 26, 2017 11:22 am

Re: College 2020

Post by chevca » Sun Feb 11, 2018 1:18 pm

Yes, far too short a time frame to throw $100k into stocks.... and pretty much confirms the absolute stu..... Kidding there, you listened to hubby and are asking now, so that shows you're smart enough to think it out first. The market doesn't really care about your intentions of some nice gains over a few years. It will do what it will do. But, I wouldn't invest for just a few years... it might just be a time of nice losses. Think long term for stock investing. Think an online savings account for your $100k and a few years.

I don't see your 401k move as all that bad. The timing didn't work out well. But, assuming the 401k won't be touched for a long time it doesn't matter much that you made that move at a bad time compared to a month before or whatever.

Your main goal now, I would say, is to come up with a comfortable to you and workable plan, set your 401k and other investment accounts to it, and then just stick with it. Jumping in and out of the market doesn't work too well because it's tough to do it well.

mega317
Posts: 3067
Joined: Tue Apr 19, 2016 10:55 am

Re: College 2020

Post by mega317 » Sun Feb 11, 2018 6:30 pm

It is important that you get your emotions in check. Everyone makes mistakes and many are much worse than yours. Don't make another one by market timing and another by investing too aggressively for a short horizon.

travellight
Posts: 2841
Joined: Tue Aug 12, 2008 5:52 pm
Location: San Diego

Re: College 2020

Post by travellight » Sun Feb 11, 2018 7:02 pm

I didn't do a 529 plan either. I invested in real estate instead and will have rental income pay for college.
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