(MONEY Magazine) – As an architect, Joe Groff, 33, of Phoenix knows the importance of designing an extra margin of safety into his houses. So it should come as no surprise that he and his wife Susan, 39, both graduates of Arizona State University, have been overly cautious in investing the $9,700 they have set aside to educate daughters Tess, 5, and Samantha, 3 1/2. Starting when Samantha was a month old, the couple, who rely chiefly on Joe's $40,000 salary, have regularly put $50 a month in conservative money- market-type investments for both girls. Additionally, they have invested & $2,000 in an equity total-return fund for Tess and $2,000 in a growth fund for Samantha. Unfortunately, if the Groffs continue to follow their current strategy, their account for Tess, now $5,600, will grow to just $31,000 by the time she enters college in 13 years. With tuition expected to rise at 7% annually, that will be enough to pay bills for only a year and a half at a public school. And Samantha's $4,100 savings is projected to increase to only $30,000 when she is ready for college in 2009. For advice on how the Groffs can meet their goals, MONEY turned to Ibbotson Associates, a Chicago financial research and consulting firm. Its analysts recommended that the couple boost college savings about $200 a month and commit nearly 90% of their money to domestic and international growth-stock funds. The analysts expect the combination to gain an average of 15% a year. There may be some bumps along the way, of course, but by diversifying among different types of stocks and bonds, Ibbotson calculates that the portfolio has only a 1% chance of gaining less than 2.8% in any one year before the girls get to college. (For funds that suit this strategy and the others in the profiles that follow, see "75 Best Funds for College" on page 54.) -- C.F.

BOX: Going for All-Out Growth

With college more than 10 years away, the Groffs can invest aggressively in international and domestic growth stocks and shrug off temporary market drops.

Portfolio allocation 40% Large-cap stocks 22% Small-cap stocks 25% International stocks 8% Long-term bonds 5% Intermediate-term bonds Projected average annual return: ..................................15.3%