A 529 is a no brainer for a grandparent. You get to a) take money out of the taxable estate and b) it is the ONLY exception that allows the GP to 100% revoke the $ with tiny penalties.

2 years on, and your blog is still providing benefit:
Very clear explanation of the flexibility to change beneficiaries of 529 Plans, even to grandchildren, if need be!
On Nevada 529 Plan and Vanguard: I also have this investment for my 529 Plan, but I do it through Upromise, and get the added benefit of small additional contributions each quarter, based on various everyday items I buy. (BTW, I figure that Upromise gets some value from knowing my purchase patterns but that doesn’t bother me. Also, I’ve been with Upromise for 7 years, and I don’t think that any confidential personal data has ever been compromised.)

thank you, Bethany

It doesn’t look bad – a quick scan shows it has an expense ration of 0.52%, which is on the low side. Utah is still likely better, depending on the amount you are going to invest. I’m still in Nevada, due to pure inertia more than anything else. I haven’t filed to transfer the money yet. Nevada lowered it’s expense ratio to 0.5% as well.

I think the UPromise branded accounts are a little more expensive, due to the cut that UPromise is probably taking. Just a hunch.

Adam

What do you think about IOWA plan (collegesavingsiowa.com)? Do you recommend this?

Thank You,
Raj.

It’s a specific company, PetroChina. Unfortunately, it’s one of the biggest companies in China, and thus any fund that owns any Chinese stocks seems to own that one.

You definitely could decide to not invest in any global fund that includes emerging markets like China.

Of course, the line in the sand is murky here too. Do you divest of other Chinese stocks that do business with PetroChina? With US & European companies that have partnerships with PetroChina?

I’m not sure this approach is the right one, either to make a difference in PetroChina behavior, or in investing your own personal portfolio. However, it’s a free market, right?

I think you’ll find that any Emerging Markets fund, or even large cap international fund, may end up with PetroChina shares.

Good luck with your efforts.
Adam

I’m not sure I have an easy answer here. In general, the concept of “socially responsible” investing has had a poor reputation overall, largely because the definition of socially responsible varies quite a bit between different people. For example, is it socially responsible to own Coca Cola? Through the 1990s, most socially responsible funds avoided Tobacco, Gambling, and Oil-related stocks. But they had no problems owning car companies, for example.

Personally, to date I have never specifically pulled out of an investment company or fund due to the stocks they own.

Do you think you could post a link to your reference to Vanguard supporting the Sudanese government? Or is the issue that Vanguard owns stocks of European companies, and European companies are notoriously close to Sudan?

I think Vanguard is extremely ethical, and likely only invests in companies that match the goals of the funds it offers. For example, if you tell Vanguard, “I want the best stocks in France”, they go buy the best stocks in France, regardless of whether or not those companies do shady deals with Iraq & Iran.

My bias would be to assume that Vanguard doesn’t seek out to invest in companies with Sudanese association, but that they are diligent in doing exactly what their investors ask them to do. A better path might be to avoid the Vanguard funds specifically that invest in these companies, if possible.

Hope that helps. I’ll think about it some more. I’m glad my blog is helpful. Let me know if there are other topics I could help with in terms of new posts.

Adam

I personally do the aggressive plan, as I like to see 100% of the plan assets in stocks, with a solid international weighting. I’ve been thinking about even moving it to the individually selected portfolios, to get a more aggressive mix of small cap & international stocks. For now, though, I’m 100% in the aggressive option.

I, of course, am not a financial advisor, so all I am giving here is my personal opinion about how I invest for my two sons education. I hope you find the information useful.

Adam

People do seem to like my personal finance posts… I guess when your blogroll is all high tech, a practical post or two really stand out. I hope the information above is helpful.

Adam

If your child decides not to go to college, then you have a few different options. The first option is to potentially reassign the account to another person who will go to college. You can change the assigned beneficiary once a year. You can even split an account into multiple accounts, and then reassign each new account to a new beneficiary.

I believe that if you withdraw the money for non-college expenses, then you are hit with federal income taxes on any gains, plus a 10% penalty, similar to what happens if you pull money out of a retirement account before age 59 1/2. Some state plans actually ding you for an additional penalty, but you could always switch your plan to a state that doesn’t.

Hope this helps.
Adam

this is probably the most useful blog post I’ve read in the last 4 month . . .