Rule of 72

FOX TOLEDO NEWS - No matter how old your children are, it's not too early to save for higher education.

Viewer Cyndy asks, "What's the best way to save for your children's college education?"

As far as the best way to save for your children's college, try to take advantage of one of the most basic of all investment rules - the time value of money.

The sooner you start saving, the better, and here's why. It's called the Rule of 72.
Here's how it works.

You take the interest rate you're earning on your investment, let's say on average eight-percent, and divide that into 72.

Now, that equals nine. So that means every nine years your investment doubles.

If you start out with $10,000 - after year number 9, it becomes $20,000, and after 18 years - $40,000, and so on.

So the point is, the sooner you start with something, the more it can be when junior is ready for it.

Now, as to what to invest in, Ohio has a good plan. It's called the 529 Plan.

The Ohio 529 Plan is an investment to save specifically for a college education.

If you're an Ohio resident, the advantage of a 529 includes tax deductions on contributions and no taxes on the earnings within the plan.

You can contribute as little as $25 at a time.