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Comment by samstave | Hacker News Reader

I funded a 529 plan with $40,000 19 years ago. It lost money.

529s are a fucking scam.

I don't know what 529 you guys invested in but Utah's 529 which anyone can use whether or not they live in Utah allows you to invest in regular old Vanguard funds like VSTSX. They also offer target dates funds that handle gradually shifting to a more conservative allocation as enrollment date nears if that's what you want.

I agree that not all 529s are good, only 2 plans received a gold rating from Morningstar in 2022: Utah & Michigan. I wouldn't choose anything other than those.

Bullshit. 529 plans are great for tax avoidance. If you picked the wrong plan, or the wrong investments within that plan, then that's on you. Try a reputable, low-cost plan from a company like Vanguard.

I'm starting to feel the same, honestly. Do you know if it was just your plan or is there something where I can find more info showing how these are not smart investments?

They are not smart investments because you have no control over where the money is pointed in the plan.

So if you call your advisor, and say "i want my 529 to only focus on X" they tell you that you have no control over the index and the plan will be the most conservative 50-year-old actuary data which has no fucking clue where the market is heading and then berate you for when their 529 index loses value...

I was ready to pay that investment banker's family a personal visit with skills that I have accumulated over a number of decades.

This is not true in most states. My 529 is just a normal investment account like my ira.

In 2004 VTI was about $55. It's now $200. On a 19-year time frame a broad market index fund like VTI is the only thing you ought to have been invested in.

Perhaps the scam is when banks let people choose their own investments rather than have it be fully managed.

The thing was that it was invested by family, in banks that failed, and failed and failed... being collapsed and bought/bailed out through the rape...

And so the account ended up continually ending up in the hands of even seedier banksters....

I didnt discover this until after my grandmother passed, and I was able to trace it back through various funds - and they just raped the account...

Well, 529s are a good way to avoid capital gains taxes on investments dedicated for education. In your case, they wanted to be extra sure that you would avoid capital gains taxes, so they lost money.

I'm more than a little curious on this one. How did you lose money in a 529? Are you saying you lost opportunity cost of having put that money somewhere else?

How? The market has generally risen since then

What did you invest in? If you just did S&P 500 it would have gone up pretty significantly.

Crazy, what did you invest it in?

Any investment that includes stock can go down in value. That doesn't make it a scam.

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