Parents of newborns have all heard variations of this depressing little factoid: Four years of tuition at a public college should cost about $96,000 in 18 years.
Put $5 a day into a cookie jar for 18 years, and you'll have saved a little more than one-third of the required sum. Even if you put that $5 a day into a savings account that earns 4 percent, you'll still have only half the necessary amount when your baby turns 18.That said, however, it's not too late to start saving for your kid's college education, or for any other goal that's seven to 10 years away.
This article will provide you with a solid group of funds for goals that far in the future. The first article in this series discussed investing for retirement, and subsequent articles will offer funds for shorter-term goals and investing for income.
With seven to 10 years until you need your money, you still have time on your side. You'll need a slightly different strategy than for retirement saving.
The kinds of funds useful for long-term goals, such as retirement, are the same ones that can help you save for college costs. But you'll want to add a bond fund to your portfolio.
Following are the funds with the percentage of your retirement savings to be allocated to each one and the toll-free number in parentheses:
-- FASCIANO (20 percent; 800-848-6050), managed by Michael Fasciano, 43, is a little-known but successful fund that invests in small, reasonably priced growth stocks.
-- FIDELITY (20 percent; 800-544-888) is run by Beth Terrana, 41, one of Fidelity's most experienced managers. Terrana's style is a blend of growth and value investing.
-- LOOMIS SAYLES BOND (20 percent; 800-633-3330) is managed by Dan Fuss, who has been investing in bonds for 30 years. An aggressive manager, Fuss keeps one-third of his portfolio in high-yielding "junk" bonds, some from emerging markets.
-- MONTAG & CALDWELL GROWTH (20 percent; 800-992-8151) invests in stocks of large, growing companies selling well below their "intrinsic value." Manager Ronald Canakaris has one-fourth of assets in health-care stocks.