Rich and highly educated! This is what you must do to make wealth for your children here and NOW
Investment for Child: Raising a child in today’s times, requires an adequate financial arsenal and thus, planning for securing his or her future is one of the most important decisions.
Investment for Child: Raising a child in today’s times, requires an adequate financial arsenal and thus, planning for securing his or her future is one of the most important decisions, parents or would-be parents need to think about. From inflation to volatility in the economy, there are a bunch of factors, that need to be assessed when making the right investments for a better future. Parents should remember that the earlier they start financial planning for their children, the greater is their chance of becoming rich, or even very rich, early in their lives. This can happen only if parents take the necessary action and this includes every aspect of investing in education, marriage, foreign studies and more.
Take a look at some of the factors, which need to be kept in mind, the ways in which you can invest your money in a better way that keeps a balance between the desire to make make money fast and the danger of taking risk thereof. Systematic Investment Plans (SIP) have made investing easier from the early phase of one's career but all investments can't be for the long-term. Also, there should be some relaxation when it comes to a partial withdrawal of your funds and here parents will also find that Systematic Withdrawal Plans (SWP) can be very useful.
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While SIP process is more or less clear for all, speaking on the importance of Systematic Withdrawal Plans in one's portfolio, Sousthav Chakrabarty, Co-founder & CEO, Capital Quotient said, "Whether, it is planning for your child’s marriage or education, there is no denying the fact that the expense is huge, which necessitates, investing early with correct financial planning. Not just his/her higher education or marriage, every stage of raising a child comes with a barrage of expenses for which a sufficient corpus is required. Systematic Withdrawal Plan (SWP) becomes pretty useful for managing several associated expenses whenever they crop up."
Asked about the steps that can be followed by the parent to execute the above, Sousthav listed out the following steps:
1] Start a Systematic Investment Plan (SIP) of Rs 5,000 in balanced mutual fund as soon as possible, generally before 2-3 years of planning for a child;
2] Have a pre-birth corpus accumulation of around Rs 2,25,000;
3] Convert entire corpus into liquid mutual fund; and
4] Give SWP of Rs 5,000 or Rs 10,000 from Liquid Mutual Fund.
So, upcoming parents are requested to follow the above-mentioned steps that would ensure a rich financial future for their children.