Need financial advice

SYBIZ

SYBIZ

Member
Joined
May 5, 2021
Messages
94
Reaction score
40
My Wife's Grandma recently passed away and had a $50,000 life insurance policy in my 14 yo daughter's name to be used for college. Should I put that in a 529 policy or would it be easier just to put in a savings account? I know there a lot of smart money guys here so I'd appreciate any advice. 

 
I had a 529 for each of my kids (3 of them). They were earning next to nothing even when market was doing good. Took them out and put in a general index fund type account. They did much better. And yes, their are tax implications to consider. 

 
I wouldn't put it in a 529 unless you already have one, or you plan to add to it in the next 4 years.  And if you do, put it in a self directed 529 if possible.  I don't think there is any tax implications with this amount at all as well.

For me, I would put it in an S&P 500 fund and let it ride.  You will have some taxes on it the growth when you go to use, be prepared.  

 
$50,000 for College? I'd try to figure out a way to use the $50k to fund daily living expenses. Car / Clothes / Food / Housing etc......Peace

 
ChEFF said:
$50,000 for College? I'd try to figure out a way to use the $50k to fund daily living expenses. Car / Clothes / Food / Housing etc......Peace
Click to expand...
You can do tuition for $50K for four years, but you would be living on the streets.  Most of college expenses is housing and food.  I just put two through college and have one more half way through it.  I figure it cost $100k a kid to get through it all.

 
An "Expert" would tell you don't listen to anyone who is not an expert....for good reasons.

That said, in my stupid opinion....I think it is better to pay taxes than to dodge them as it means that you made a profit.  

A savings account is moving backwards as the interest rate is lower than inflation...but I guess that it is better than burying it in a coffee can in the backyard.

You can go to some other states, and pay out of state tuition than you can in CA...or at least a guy that was going to a local U.  He was from the Sacramento area, if I remember right.

 
ChEFF said:
$50,000 for College? I'd try to figure out a way to use the $50k to fund daily living expenses. Car / Clothes / Food / Housing etc......Peace
Click to expand...
Seems like that would defeat the purpose of what grandma left it for?  Heck, why not just get some hookers and blow?  50k may not pay for an entire college education but it would be a start and no mater what happens, you cannot take a person's education from them. Maybe even be inspiring to the grandchild know that grandma is gone but still helping her grandchild on this journey through life?

 
 At 14 you don't have a big runway (4 years ) before college so you are not going to have a lot of gain anyway. 529's can also be used for a future spouse or future children for private school tuition as well as college and trade school. With a 529 only the gains are subject to a 10% penalty and taxes if the money is used for something other than qualified edjucation expenses. 

I'm with @Cookie on this one. I would just open a Vangaurd account and get a low cost index fund like VTSAX total market or VFIAX S&P 500. Keep in mind you end up with $40,000 in 4 years or you could end up with $60,000

If you really just want to preserve the money a CD would better than a savings account. 

As for being able to stretch $50,000.00 for college ? 

1) live at home 2 years JC and 2 years a Universtiy , no problem.

2) live away at school in state 1 1/2 years if you are lucky.

3) Go out of state or attend a private college, one year if you are lucky. 

Having already funded options 1 & 2 I would beg you to choose number #1

Good luck deciding and what a cool blessing to recieve the $50K 

 
Last edited by a moderator:
@badgas

#1  CA State Community Collège is free if you go full time for 2 years.  My kids will all go this route and figure out life, etc while getting their General Ed requirements completed.

The degree you earn at the end...still says the same name on it. $ave poor mom and dad some coin, while growing up a little more. 

 
I appreciate all the info and yes, it's a huge blessing. There's another $50k heading her way when my wife's grandfather passes away so that should set up her education fund pretty nice.

While the "hookers and blow" is tempting, I think a CD is the way I'm leaning in order to "preserve the money" as badgas suggested. 
 

 
SYBIZ said:
I think a CD is the way I'm leaning in order to "preserve the money" as badgas suggested. 
 
Click to expand...
Just remember with this option if you make 1.5 % that with inflation you are actually losing money but you also won't end up with $40K if things get dizzy for a while. 

 
You must log in or register to reply here.
Back
Top