I started a college fund for my daughter back when she was in elementary school. On the advice of a friend's wife who was in finance at the time, and a Fidelity advisor, I dished out a modest amount to pay for tuition. Long story short, the investment did not perform so well. As I was to learn later, my daughter's investment was saturated with real estate assets that went bust when the industry did. But caving in to the advisor's request, I left the money alone because the real estate market was supposed to recover. It never did and the investment never really gave us much of a return.
Now my daughter is relying on financial aid, scholarships, and her father to pay for tuition. Sad to say, tuition has become a burden even with all the aid and scholarships she's receiving. So my attempt at planning for her future failed for several reasons:
- Not trusting my instinct. At the time I started the fund for my daughter, I knew absolutely nothing about finance or investing. In fact, I was in a very different profession at the time so I left the investing options to the 'experts' although my instincts and common sense told me otherwise. Even when the real estate market went bust, I knew instinctively the asset mix should have been changed, but I believed that those in finance understood better than I did. In retrospect, I should have been firmer. It was my money the 'experts' were using, and it should have been my decision as to how it was used.
- Did not diversify. At the time, I had placed that investment in one place. Big, big mistake. I should have opened up other funds, such as a 529 Plan or used another broker. It's never a smart choice to leave any money in one investment.
- Did not contribute enough. To the fund that is. Once I opened that fund, I never added more money to it, but simply relied on the market to make the stocks that made up the investment grow. It was a good decision at the time because my family was growing and we were living on one income, so there really wasn't much more I could contribute. Reflecting back now, I see that that was merely an excuse. Any small contribution would have helped the fund grow considerably - after I had developed enough confidence and backbone to force the advisor to move the money out of a highly saturated real estate fund.
- Not filing on time. I must admit, I get very flustered and procrastinate. There are hundreds of scholarships available to apply for, but I never set aside enough time to do the required research. That, and I get awfully frustrated of reminding my daughter to write her essays. I have friends who file for every scholarship they come across, and their out of pocket for tuition is a lot less than what my daughter is being made to pay.