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With the average cost of college education rising approximately 6% every year, what is the best way to have the money for college education when you need it? We can easily help you with different ways to invest for college education.
In fact, only 40% of students graduate in four (4) years. That means that 60% of students are taking five (5) years to complete their college education.
It's very important to plan for this major expense well in advance. On average, it costs over $6,000 per year to attend a state college. And if you attend an out-of-state college, the sur-charge can amount to over $10,000. Private colleges can run well over $22,000per year.
There are many ways to pay for your or your child's college education:
- You can invest your money in the stock market or savings account. But, this can mean a hefty tax payment when you take the money out of the account.
- You can hope your child has the ability to obtain a scholarship.
- You can take a second job when the time comes...or have the student take a part-time job to help with expenses. But consider the longer time to graduate, and also the fact that there is a higher drop-out rate with students who have to work.
- Or you could have your child finance his/her education with student loans. But, this leaves them with a huge debt load when they are trying to start their adult life.
I have an alternative! Consider purchasing a rental property with a 15-year mortgage. It's the easy way to have the funds for college at your fingertips when you need it.
Let's use a $125,000 property for an example.
Even if there is no appreciation in value - you will have a $125,000 asset which will go a long way toward a college education.
But, let's look at the figures with just a modest 5% increase in property values. This $125,000 investment will have more than doubled....to over $250,000...in 15 years.
And you don't even have to sell it to pay for college! Just re-finance it when the time comes. And guess what - it's tax-free money because a refinance is not taxable income.
What a great way to have money for a college education! All these great benefits - plus having someone renting the home to make most or all of the payments. Remember, as the value of the home goes up - so does the rental income. Even with a larger refinance - the rent will have kept pace with the home's value.
There are many different ways to invest for a college education. This is just one of the ways we can help you plan for the future. Don't miss my article on how you can have $100,000 tax-free income annually for an early retirement.
Contact me for help to create a blueprint for future income. Hope to hear from you soon! Please feel free to call us at your convenience.
Remember - You've got a friend in Nashville! We're Buyer's Agents - specializing in helping homebuyers find and purchase their new dream home.
Accent Realty Group Pam Rumley
Buyer's Agent Specialist
Broker, CRS, ABR, SRES
Office 615-206-8445
Direct 615-428-8500
Fax 615-206-8437
pam@pamrumley.com
The agent to call when you need someone to go that extra mile!
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