How would you invest this money?

[robby]

If you had a newborn baby and $1000 to invest for her future, what would you do with the money? Would you invest it for her college or for her retirement? Would you put it in stocks or someplace else?

[Fern]

Start the college fund with no-load mutual funds at a well-respectef fund family with a track record, such as T. Rowe Price, Vanguard or Fidelity. She's got 17 years before college, so go with a stock fund.

Some would argue that your retirement is a more compelling need, while theoretically your daughter could find other means to fund her college tuitiion, including employment, student loans and scholarship monies if she's bright.

Either way, invest the money. I assume the part about saving for HER retirement is a typo, since that's her responsiblity, not yours.

[jmjj215]

And pretend student loans aren't an option. Make them not an option.

[Bruce Wayne]

I agree that stocks are the best option over that period of time. If you didn't want to risk it you could always go with bonds as a low risk alternative.

[Fern]

why say student loans shouldn't be an option??

[robby]

Originally Posted by Fern

Either way, invest the money. I assume the part about saving for HER retirement is a typo, since that's her responsiblity, not yours.

No, I thought placing the money in a Roth IRA for her could be an option.

[robby]

Should I use the money as a general investment with the money not necessarily earmarked for a specific use or should I make it specific (aren't there special types of saving funds for education?)

[Tree0164]

I would place it in it in a 529 plan.

You can not place it in a Roth IRA unless she earned the income.

[jmjj215]

Originally Posted by Fern

why say student loans shouldn't be an option??

Fern, I think people move too quickly to the 'student loan' option when thinking about how to pay for higher education. If a kid knows from the time they're 12 that they're going to have to save money and work through college and that you can't borrow money to get through, they'll likely save the money, choose a reasonably priced school, and/or both.

I just think people lose a bit of ingenuity, and creativity with all of the loans available out there. It's easier to borrow it than to pay it back.

[BAGAGT1]

In either case (saving for college or retirement), you have plenty of time to work with. That being said investing in long term growth Stocks (ETF's or Mutual Funds, not individual companies) would be the way to go IMO. The real question is, are you willing to manage the portfolio/risk for the next 18 years?