Saving For College

    Yes, I’m going to college!  Not tomorrow, but soon enough to seriously think about how I will set aside money for my college education. Education is an investment. Therefore, I am an investor.  Investing in mutual funds can be a great way of growing money for college. Mutual funds are companies that help investors diversify their portfolios by investing in a variety of stocks or bonds.  This is done by pooling funds from investors’ savings.  For example, some mutual funds specialize in investing in stocks from domestic companies.  Others focus on value, some emphasize growth, and others combine both growth and value.  Some mutual funds focus on investing in companies located outside of the United States while others focus on investment in companies located all over the world. Still some other mutual funds focus on social issues such as the environment.  This is why investing my savings in mutual funds will serve best for setting aside money for college.

    The two funds that are the best for setting aside money for college...drum roll please global funds and money market mutual funds.  Global funds are important because they can help you invest in different stocks in foreign companies. This is helpful because rising foreign stock can help offset falling or slow rising domestic stock in the United States. Therefore, by investing in global funds, I can increase my chances of making more money for college.

    Another type of fund that is a good place to invest is in a money market. Money market mutual funds have less risk and are a good place to keep your money. Instead of investing in a company you invest your money in IOUs and other debts for a short period of time. Money market fund shares typically remain at one dollar a share. They make a good place to save money.  When you invest in a company, the company sends 1% of your money back. You can trust this company knowing that your money will not get lost.  This is why money market mutual funds are a good fund to invest in for college.

    All of these funds have differences and similarities.  One similarity is that they are both funds that are easy to use.  Some differences are that money market mutual funds are safer. Another difference is that when you invest in money market mutual funds you get 1% of the money back.  In addition, when you invest in global funds your money goes out of the United States into foreign markets.  These funds are also easy to check by looking at the newspaper or using the Internet.

    By diversifying my portfolio in money market mutual funds, I will be able to gain a good return on my investment. My portfolio would combine different types of investments. If I want to have a successful portfolio, I need the right balance of investments for my money to grow.  I’m going to college!