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How to maximize investing for education
Be sure to save on a regular basis. And even if
you can afford to make one annual contribution, you may be
better off making regular monthly payments. The reason is
to take advantage of a strategy called dollar cost averaging,
which can help smooth out the highs and lows of investing
in equities and mutual funds. If you have at least 6 or 7 or more years until
the funds are needed, be sure to take advantage of growth
investment opportunities, which are your best defence against
soaring tuition costs. And always keep in mind the principles
of diversification and asset allocation discussed earlier. Remember that even more important than how much
you contribute is how much your investments earn. Over a number
of years, after the compounding effect, even 1% more in earnings
can make a huge difference. Be sure to contribute the maximum if you’re
contributing to an RESP and as much as you can afford if outside
an RESP. With costs soaring as they are, you never know how
much you’ll need in future years. Encourage your children to save as well. It’s
never too early to begin and over the years those savings
can really add up. Tell friends and relatives about your educational
savings programs and make sure that money the children receive
as gifts go toward this purpose.
Important information about our financial planning services can be found at the bottom of our
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