Market Graph
Child Education Plan
All parents dream of fulfilling all the requirements and desires of their kids. They want to give the best to their juniors. Best of education, best of toys, best of health, best of everything! The only problem with these best things is that these have the best price tags too!
Let's take education as a case. After paying Rs 1,000 to Rs 5,000 per month in play school, a father takes his kid to the best private school in town. This school makes him forcefully pay huge sums of donation, though donations were meant to be paid wilfully.
After this donation which runs into a few lacs of rupees, every month the parent is required to pay tuition fee of his/her kid, which may be again around Rs 1,000 to Rs 4,000. And, if the parents have chosen an air-conditioned, well-built school with all upgraded infrastructure facilities, then the monthly outgo maybe around Rs 7,000. But what can a father do, after all it is about the child's future. Or is this really the case? Maybe something could have been done.
Duration depends on when planning is started. It is no-brainer in investment world that the sooner we start, the better it is, and for a very basic reason - the magic of compounding. Think of a parent who started planning for their kid even before it was born and begun investing when the little one arrived. They had a pretty long time (about 18 years for higher studies and 25 years for marriage and house). With such a long period one can think of an equity skewed portfolio.
Lastly, risk tolerance is what varies with one's portfolio duration, value, liabilities and return expectations. But in case a couple is looking for such a big time horizon (more than 15 years), risk tolerance should cover all other variables. Equity investments, as shown by countless researches, are best suited for long-term investment durations.
Based on the above analysis one may look at various financial products available in the market. Looking at investment options that provide more exposure to equity is something one should look for. For passive investors, those who find stock symbols like chemical formula, investing directly in equity mutual funds, exchange traded funds (these replicate the performance of an index) could be a preferred option.
Also to reap benefits of tax allowance on investments and their disposal, one can allocate some amount to products like Public Provident Fund.
Education Planner :
This planner helps you to see the future expenditure which will be incurred at the time when your child is pursuing for higher education.
Please contact us for more details