Issue 25(1)

I was very fortunate that my parents sacrificed, scrimped, and saved to pay for my college education. Now that I am a parent, I want to ensure that my 2-year old son is also able to graduate debt free from college. The bottom line of David G. Speck's book, College Savings Rx: Investment Prescriptions for a Healthy College Fund, is start saving early! The author is managing director of a major securities firm and an authority on mutual fund investing.

This concise (64 page), easy-to-read book helped me devise a savings plan to finance my son's college education. The four chapters of the book are loaded with step-by-step instructions accompanied by useful charts to help the reader devise an individualized savings plan. Speck first provides a framework for estimating future college tuition expenses and how much parents need to invest each month to cover those costs. Next, he discusses the various savings mechanisms available today and the pros and cons of each option as well as instructions on how to develop a sound, individualized, investment strategy. Finally, he covers options available to parents who did not start saving until immediately before their children graduated from high school.

The book is fairly timeless because it is based on sound economic theories. The author notes, "If you read this book 5 or 10 years from now the assumptions will be the same and Table 1 will be the only resource you need" (p. 13). The table to which he is referring outlines estimates of college inflation rates. Again, the underlying message of the book is that one needs to start investing early so that he or she can take advantage of the money compounding. The book also allows people to tailor their investment plans to their own unique circumstances and to set up realistic, monthly, savings plans. My only criticism of the book is that some of the material seemed a tad complex for the average lay person, but it is worth the time and effort to navigate through this book!