If you want to save for your child’s education, you can open a second brokerage account at American Funds and have the money earmarked for your child’s education. Before engaging us on this topic, you probably have heard of an investment account called a 529 or an ESA. While these accounts are outstanding for college savings, they are not adaptable to young minds’ changing desires. For this reason, we like to use a simple brokerage account to achieve the same investment exposure while having a separate account earmarked for college savings. In addition, given the unique tax status of most PI members, the potential tax implications of most brokerage account investment gains are mitigated, rendering the tax-deferred growth of 529 assets less impactful.
