Child Education

EVERY CHILD HAS A DREAM

HOW MUCH AND WHAT WILL YOU SPEND IN RAISING A CHILD

Expenses rise with the age of  a child. As your child grows, so do his demands. With every passing year, some of his needs increases, while others wane. For instance, healthcare costs are the highest till the child is 4 years old, whereas education costs form a huge chunk of expenses between 17 and 21 years.

SOME EXPENSES RISE FASTER THAN OTHERS

Education: Assuming that child studies in public school. Cost includes all school expenses tuition fee, bus fee, books, sports etc. As the child completes schooling, he enrolls for any professional /degree course which escalates education costs for the parents. Education expenses have risen faster in metro cities to that in tier 2 and 3 towns. 169% has been the rise in inflation in primary and secondary education from 2005 to 2011, according to a survey by ASSOCHAM.

 It is every parents dream to provide the best of everything to his child. A sound education would undoubtedly be at the top of the list. However, it now costs more to bring a smile on child’s face than it once did to educate his father. Quality education comes with an expensive price tag, and you need to invest today in order to gift your precious one the education he deserves tomorrow. With every passing year the cost of child education is increasing beyond our imagination. Apart from course fees there are other expenses involved which are normally ignored.

(Increase in the cost of education assumed at 6% every year)

FUTURE REQUIREMENT IS HUGE, THE QUESTION IS HOW TO HANDLE

If the cost of education is going to increase by more than 3 times in next 15 years assuming inflation @ 6% then you need to choose a right asset class to plan for your child’s higher education.

INVEST IN SYSTEMATIC INVESTMENT PLAN IN EQUITY MUTUAL FUNDS

Systematic Investment Plan (SIP) is a financial Planning tool that allows you to invest in mutual funds through small, periodic installments. Moreover you can also select the tenure of your investments.

SIPs help you set aside a fixed amount every month for investments thus contributing towards your financial goals. For investment purpose, we often wait to collect a large amount of money and invest it all at once. Through SIP you can start with smaller amount on a monthly basis, which can help create wealth over the long term.

APPLY THE BASIC INVESTMENT RULE

START EARLY+INVEST REGULARLY+SELECT RIGHT ASSET CLASS = GOAL ACHIEVEMENT

Systematic investing has a compounding effect on your investments. In the long term, an investment as low as Rs. 5000/- per month can swell into a huge corpus. If an investor starts early, even with lower invested amount he can create a large corpus.

Every investor dreams of buying at a low price and selling at a higher price. But, how does one know whether any given time is the right time to buy or sell? many retail investors try to judge the market movements and end up losing money by making incorrect decisions.

Equity has delivered better inflation adjusted return among all asset classes over a longer period of time. In the long term equity investments have outperformed other investment avenues and have also beater inflation by a huge margin.