We are sending our first off to college. We can either take $15k in loans at about 6% or liquidate our stocks. We started investing in the first place so we could help our kids pay for college. But our stocks have returned 309% (thank you Apple) and now we're wondering if we should keep the money in stocks, since they are growing so exponentially more than the loan percentage, and take the loans instead. Seems like a no brainer, but when do we reach that line where we stop with the stocks and give the money to the kids? When the stocks start to tank?
We are obviously not to financially savvy, so thanks for any input you can provide.
Sat Apr 01, 2017 12:05 am
Cash: $ 381.25
Joined: 09 Feb 2009
Trying to time the market is something even the experts cannot do time and time again. The last figure I heard was that no Professional stock trader can beat the market consistenly and only 15% of those traders can beat the S&P 500 for a short period of time and their never the same traders.
I would consider yourselves lucky and sell. As for what to do with the money, if you feel as though your own retirement won't be in jeopardy without this money, then go ahead and pay your child's college tuition. If it will effect your retirement savings, then I would look to school loans, scholarships and grants to pay for school.
Just for fun, I once thought about buying Apple stock in 2000 when it was $7.00. Shows you how much I suck at timing the market. Instead I just invest in index funds that track 3,000 companies and have done quite well with that with .05% expense ratios.
Risk comes from not knowing what you're doing. (Warren Buffet)
Tue Apr 04, 2017 7:32 pm
CrazyCache New Poster
Cash: $ 0.45
Joined: 31 Mar 2017
Thanks - that makes sense
This won't affect our retirement, so we're good there. Thanks for putting it in layman's terms I could understand.
Wed Apr 05, 2017 1:41 pm
Roger Contributing Member
Cash: $ 0.45
Joined: 26 Aug 2014
I think no one can make profit consistently in stocks even experienced traders also and you should save your money for future and also give some money to kids but not invest all your money in stocks.