Korbitz and Stone both believe the threat of a young adult running amok with money saved toward college expenses is overestimated. Still, concerned parents can alternately invest in a growth stock in their own names with the child's education in mind. If the child doesn't qualify for financial aid, they can make a gift of the stock to the child when college expenses come due. It's also less effort. A deeper rationale for not keeping separate education accounts is the ability to maintain a better balanced investment portfolio now and in the future.
Individual investments are subject to spurts and retreats.
A college fund might seriously outperform or underperform your other investments. Fitted together in a good asset allocation plan, however, the pool of money grows more steadily and predictably. Save some in the child's name, but save some in your name, too. That way you can always reorient it to another child or to your own retirement. All rights reserved.