Early investing allows your investment to compound over time, which may help you reach your goal. That's why the best time to begin investing for higher education is now.
Say you are investing for your child's education and you add $250 per month to an initial investment of $2,500. The difference between starting to invest at your child's birth versus when your child is 5 years old is indicated below:*
As you can see, the five years of growth and compounding that were lost by starting later significantly impacts the total amount available when your child starts college. That's the power of giving your investments time to grow.
* Chart source: American Century. This example is based on an initial investment of $2,500 with $250 added each of the following months (made on the first day of each month) for a total of 13 years and assumes a constant rate of return of 6% per year. When starting at birth, the investments stop when the child turns 13. It is not meant to be an indicator of the future performance of your investment. Performance may vary when investing through an advisor, and, due to market fluctuations, the value of your investment may be less than the amount of money that you have invested.