$7,000 Invested in This ETF Could Send Your Kids to College
The average 529 college savings plan is opened once the beneficiary has already celebrated their seventh birthday, according to Morningstar research. And that's actually a late start. A 529 plan gives you a limited number of mutual funds, often target-date funds, that are designed for an 18-year time horizon.
But suppose when your child is 7, you opted to forgo a 529 plan and invest instead in a high-growth exchange-traded fund, like the Vanguard Growth Index Fund ETF (NYSEMKT: VUG). You'd be taking on a lot more risk with your child's college money, though the potential returns are astronomically higher.
If you invest $7,000, then kick in another $200 a month, and the fund delivers returns on par with what it has over the last decade, you could have more than enough to pay for your child's college tuition 10 years from now.
Source Fool.com
