It is the dream of every Indian parent to see their children excel in their studies and graduate from Ivy Leagues like Harvard, Oxford, MIT, YALE, IITs, IIMs etc.This is the number one goal for most Indian Parents, a higher priority than even their Retirement.
The rising costs of education both in India and abroad make it essential that you start planning for this goal at the earliest. Starting early is essential, but equally essential is investing in the right instruments to achieve this important goal.
Like most parents, you might be saving regularly to ensure a safe and secure future for your child where your child is set up with the best education to give him/her a great platform on which to build a career and life. However, savings alone is no longer enough.
For ensuring adequate funding of your child’s education, you as a parent, need to do two things:
» Invest appropriate amount systematically in the correct financial instruments
» Provide for a financial security blanket to cover any eventuality
It is never too early to start saving and investing for your child’s future. Especially in today’s context. For example, the cost of a 4-year degree could range from 10 lakhs (IITs) to 2 Cr (MIT) today, depending on the college and country. On top of this, inflation needs to be factored in.If your child is one year old today, after 17 years when he/she goes to college, you may require a sum of Rs 25 Lakhs – 5 Cr, assuming an annual rate of inflation of 6%.
Education planning involves designing an investment strategy by forecasting the educational needs of your family and addressing those needs by helping you create a financial plan to reach your goals and fund your child’s college dreams.
We at SMFS, have successfully guided a lot of our clients to their goal of providing the best education for their children. We can help make an education plan that suits your family’s so that you will be ready for the next stage of your child’s life. It is important to begin investing early to reduce the funds required by taking advantage of the power of compounding over time.