You're definitely on the right track by investing early...compounding interest (the interest you earn earns interest on top of that) is probably one of, if not the best advantage to long-term investing. You've got a wide variety of options open to you. I'm sure you read about a 529, a custodial account, prepaying school fees, etc. Here's a quick summary and my thoughts on each.
529 - This is basically like an IRA or Roth IRA for education. You put the money in, it grows tax free and you can take money out tax free as well as long as its for qualified education expenses. If you want to save for college, this is probably your best bet. Have your portfolio tend towards growth funds, and then get more conservative after your child turns 10. Make sure you have 20-25% in international funds too.
Custodial - Basically a portfolio for your child you handle until they're 18. This is taxed, but as I understand it, your child's income is what they base the bracket off of. Since your kid won't be earning any money until 16, when a large portion of your growth has already happened, you shouldn't take too much of a hit. This is what I'm doing for my kid, because I want to have money I can tap into for things other than college, without taking a 10% penalty with taxes. Stuff like wedding, graduation, etc.
Prepay College Tuition - I haven't looked into this one too much, but from what I can gather its a way to pay tomorrow's tuition at today's prices. Pretty good deal, my advisor projected the education I got at a cost of 40,000 bucks to be 120,000 dollars by the time my son is 18. Yipes. But, and you'd have to look into this more, I think you're very restricted on where your child can attend college. I.e., can't go out of state, can't go to a private university, etc. Since you have no idea what your kid wants at this point...I'd stay away from it, but it depends on your state laws.
There are Coverdell and other education plans out there, but I don't know much about them. Good luck!
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