In a previous post I wrote that I opened up 529 plans for my children during the COVID-19 pandemic when the economy was impacted. I made the decision to open up these accounts because I thought the economy was going to recover and it was a good time to invest. The reason I opened a 529 versus an individual account is because of the potential tax breaks and that the gains are not taxable if used towards education. I didn’t open the Prepaid College Trust rather the College Investment Plan. I didn’t want to commit to the prepaid so I’m hoping that the investments I make will grow super fast.
The graphic is the Dow Jones Industrial Average chart where the red rectangles represent when I made my 3 deposits. You can see that the market gained after each deposit.
So how did my 529 investment do? I am experiencing a positive rate of return and so far I’ve gained approximately 16%. It looks like my decision to invest was a good decision.
Since this is a 529 plan, I can’t withdraw without penalty unless it’s for education purposes. I’m very happy with the rate of return and hope the economy continues to recover. It’s important to note that any investment has risk. It’s also important to capitalize when you can on investment opportunities. My savings account interest kept decreasing and I thought my money can be better invested elsewhere. I wanted to share this because as history shows the stock market eventually rebounds after a crash which is one reason I invested. The uncertainty and market volatility is always a concern but again looking back at history, the stock market eventually comes back. Whatever investment opportunities you are exploring, take the time to research. Taking advantage of investment opportunities will help you reach your financial goals and help reach financial independence. If you are interested in following my journey, email subscribe to get alerts of latest posts or follow me on Facebook.