WDRP and Education Savings Accounts (Revisited)

This past year my wife and I adopted a little baby boy.  In this same amount of time I realized two things.  First, was just how much more my life could be fulfilled.  Second, I realized I have to start saving for college!  A few investing mantras came to mind: "Start early!", "Take advantage of the time value of money" and most important, "Buy low and sell high".  With the cost of higher education growing at an average rate of 6%, a public university education could be over $200,000.00, so I better get started.

529 Plans are a very good option because they work similar to a normal 401k, where you have a fund manager who provides possibilities to invest.  If you do not have the time to pick investments yourself they often have models to use also, which are extremely helpful.  Another similarity to the 401k is that you are locked into the investments that are in your specific 529 Plan with that manager.  This isn't a bad thing and it is great if you have a good money manager in charge of your plan.  However, using the 529 Plan option, you do not have the whole market to work with.

Education Savings Accounts (ESA's) are another great option that you can take advantage of.  I found that Scottrade has one as I am sure most trading platforms do.  Each year you are able to contribute up to $2,000 in an ESA, which will grow tax free until you need to take the money out for educational needs.  Keep in mind, there will be a penalty if you take distributions from tax free growth and do not use it for education.  So the goal of the money you invest in this plan is to use it for educational purposes. 

We know the 529 Plan has its own investment options, so lets talk about of using your ESA contribution of $2000 for this year to purchase WDRP shares.  Right now, the current WDRP price per share (pps)  is .017, you would be able to purchase a little more than 115,000 shares.  If WDRP went up to .05, which I think is very possible, your money would then be $5,750.  If in the next few months WDRP announces that they have a Microwave Tankless Water Heater (MTWH) to sell and we start seeing production, this could go to .30 pps very quickly.  That would be $34,500.  If in the next year or two WDRP is selling the water heater internationally and also coming out with any other products and uses for this technology, then this could be 1 to 2 dollars.  In that scenario your $2,000 investment would have quite a head start in paying for your child's education.

For my son's ESA I put $2000 in and bought 289,300 shares at $.005, for just over $1,400.00 and then two other positions that are more conservative. With the pps at .017 his Wanderport holding is worth $4,918.00. Already some nice growth.

Keep in mind both ESA and the 529 Plans can be used for any kind of education. Not only university, but pre-schools up through university or trade schools are acceptable ways to use this money and not pay a penalty.

One idea I like and hopefully will be able to take advantage of is to buy a house in the area your child goes to school, then when you pay for the Room & Board, it is a check you are writing to you!

There are rules and restrictions using the money for non education needs which penalize the distribution by around 10%, so you will want to be sure you are using the money correctly for education.

Both ESA and 529 Plans are transferable if the child designated doesn't use all or any of the money. I believe an ESA has some different, more stringent age restrictions for transferal than a 529 plan, so you should educate your self on the differences and choose the one that fits your needs best.
It is never too late to start saving for education.  Good luck!


Because of the possibilities of share price growth, I believe you could save a lot of money towards your child's education with this idea.  I am not your financial advisor, and this general discussion is not meant to be investment advice.  Use this information to talk with a professional advisor who knows your financial situation and can give you specific advice based on that.