NCN has posted a list of questions he has about money (he is one of the original PF blogger gurus, so it’s reassuring to know that even he still has unanswered questions). I found myself asking the same questions on number 1 (what’s in your retirement account) and number 2 (saving for college). My IRA and 457 plan are a mix of ETFs, index funds, one bond fund and one stock (GE). Do I have the right mix is anybody’s guess. My bond fund is only about $200 out of a $22,000 portfolio, so it’s not much of a concern. I have about $1800 worth of GE… I bought it because a couple years ago, when it was a “stock to buy now” in both Money and Smart Money magazine. Dumb reason, I know, but that’s why I have it. It hasn’t done much since I’ve had it, although it is worth more than it was when I bought it. I have about $15k in ETFs, and the rest is in index funds. I’m 28, and most of what I have is reasonably high-risk, high return stuff. I feel ok about what I have, but I also feel unsure – I know that there’s so much I don’t know about investing, and I wonder if I’m missing the boat somewhere.
Question number 2… We don’t have children yet, but I have been reading about 529 plans and various ways of saving for college… I’m not sure yet what we will do. One thought that I already have on that subject is that children should be responsible for some part of their college costs. My parents helped me open a savings account when I was about 5. All the money in the account came from doing chores around the house, and birthday money from my grandmothers – and I always knew that the money was “for college.” That savings account was like a roach motel. Money could go in, but it could not come out. I applied for every scholarship available when I was a senior in high school. I ended up getting enough to cover tuition and fees at a good state university, with a little extra for room and board. My parents helped me with a good chunk of the remaining room and board while I lived in the dorm, and then I paid my own rent and groceries once I moved into an apartment. I worked part time in college, which I would strongly recommend for my own children. I knew people whose parents paid for everything – tuition, rent, groceries, car insurance, books, gym membership, beer money… I was never very impressed with those people. They had an air of entitlement about them that I found unappealing. It’s one thing to have help from your parents. It’s another thing entirely to be a total mooch. So while we will start some sort of college savings plan as soon as we have a child, we will not plan to cover the entire cost of college and everything that goes along with it.