MBA Saving Program

Brian has 2 places to choose from to save for college. Dave thinks both are better.

QUESTION: Brian is 24 and debt free. He wants to do an MBA program and thinks a 529 savings plan is the way to save up for it. Should he save in a money market account or growth index funds? Time to split things up, says Dave.

ANSWER: You can’t do a college savings plan like a 529 or educational savings account if you are over 18. Put half of your money in an S&P 500 fund, or a simple growth and income fund, and the rest in a money market account. That is conservative enough because you don’t have a big window of time here. If you go with something more aggressive than that, the volatility will take you out. In 5 to 7 years, the interest rate isn’t what will send you to school. It will be your savings, because the interest won't work that hard in that time span.