Tales of the Kids Edu Fund

[Featsbeyond50]

And how do you plan to handle them?

I'm sure there are others here who are also very pleased with the status of their kids education accounts. I'd like a little more in my oldest son's account since he only has 170K, he's just started, and he's talking law school after college.

Things get really fun with my 11 year old daughter though. She has 107K now and, if we believe the TSLA will 4X by 2025 story, she will have over 400K by the time she's a sophomore in high school. Since this is a humblebrag topic (please pile in with humblebrags of your own), I'll add that my daughter took the first test of her life a few months ago (she's a home schooler and the state of Pennsylvania mandates testing at the 5th grade level) and scored 99 percentile on both mathematics and reading comprehension. I'm thinking by the time she enters college she could have 400 to 800K in her account and academic scholarships lined up on top of that. By the time she finishes college there's a good chance she will have one of those good kind of problems to have.

My overlooked middle child has 120 at 14yo.

 

[MikeC]

I have two kids under 5 who each have 150 shares of TSLA in a custodial account they can access when they’re 21. I can’t even imagine what the shares will be worth in the late 2030s.

 

[Featsbeyond50]

I have two kids under 5 who each have 150 shares of TSLA in a custodial account they can access when they’re 21. I can’t even imagine what the shares will be worth in the late 2030s.

Wow. Most people around these parts, including me and it sounds like you probably do too, think it will more than 10X by then. What are your plans as a parent? If they go to college will they be self funding? How come you bought it in a custodial account as opposed to a tax free college fund?

 

[MikeC]

Wow. Most people around these parts, including me and it sounds like you probably do too, think it will more than 10X by then. What are your plans as a parent? If they go to college will they be self funding? How come you bought it in a custodial account as opposed to a tax free college fund?

It started as 30 pre-split shares for each at $300. I don’t get a 529 deduction in my state, but somehow overlooked that earnings on a 529 would be tax-free. I still like the flexibility of the custodial account because it will hopefully be more than they need for college and that part won’t be subject to a 10% penalty. Since it’s their money, it will be taxed at their rates once they reach 18, which should help, too.

I think I can transfer some of it to a 529 account before they start school so it doesn’t affect their financial aid as much, although if it’s like a million dollars at that point, I guess they won’t really need financial aid. I can withdraw from the accounts along the way to spend for their benefit. I also plan to use it to teach them to invest and let them make their own trades (although I don’t know what else to teach them other than to buy TSLA.)

I guess the big question is what happens if they turn 21 and don’t want to go to school or aren’t responsible enough to handle a windfall. I’m not sure but I suppose that’s my job as a parent to make sure they are.

 

[UncaNed]

Is there a way I can contribute to a friend's kid's education fund tax free?

I know nothing about college funds and taxes.