advice on scholarship funds...

[Nai]

We've gone with ASG too - signed up when DD was about 6months old. I like the fact that it is guaranteed and also that you get tax exemptions ont he interest as it is an education fund. Also the tertiary incentive is a good one (I know I would have liked that when I went to uni!)

[AnyDream]

The financial advice we got is that it's far better to sink that money into paying off your home loan as quickly as possible (given that the interest on a home loan compounds, you can save yourself far more than you'd ever earn in a scholarship plan). Then once your loan is paid off (ie your money has worked hardest for you) you can afford to invest in a high-yield arrangement to cover any education expenses/other things that you'd like for your children. Ie you might have a child who opts to NOT to study but wants to spend time overseas - (valid lifelong learning). Or they may want capital to start a business/buy property, etc. In the ASG model your money won't give you a return in this scenario, but by investing independently the money is yours to decide.

PS I'll add that originally we signed up, seemed like a good idea, but took an early exit.

[MantaRay]

You're certainly right MD that paying off your mortgage quicker is a better return. But the will power to do that and not redraw the money is not always there

[Cassius2]

Thanks guys!! it's great to hear that others have or are thinking of this idea! We do like the principles, but like MD said, i am concerned that if DD decides to not further her study then that money goes back into ASG...

MD: when you took the early exit what happened to the funds you accumulated?

the tax exemption idea is one of the selling points of the plan vs. doing our own managed fund i have to say.

ohhhh, so much to think about!

[AnyDream]

MD: when you took the early exit what happened to the funds you accumulated?

We exited fairly early on (less than 2 years from memory) so we got a little money back and I *think* a very small interest amount. We were going through a debt consolidation process at the time and that was reason enough for them.

[Cassius2]

MD: hhmmm, well at least they seem reasonable about the whole thing. DH really liked the guy and thought he seemed pretty genuine (I missed out on the whole presentation as it was a work day...).