Skip to main content

Children Education Goal

Best SIP Funds to Invest Online 


Ajay was feeling a little confused as he heard Raghav and Abdul talk about the problems they faced while planning their children's education. Raghav had bought a child insurance plan for his son's education, but the amount was insufficient. Abdul had reduced his retirement allocation to contribute more for his daughter's education and was worried that he may be left with a smaller retirement corpus.

What went wrong

Both Raghav and Abdul made the following fundamental mistakes:

  • Never buy insurance in the name of the child. Your child is not the earning member of the family. You and your spouse who need to be insured. Child cover plans are hybrid products that mix insurance and investment, and hence, are ineffective.  
  • Instead of compromising on the retirement corpus, Abdul should have focused on starting his child's planning earlier.

Ajay should, instead, follow these steps to safeguard his child's future:

Integrate children's education into overall financial plan

Ajay must not treat the plan for his daughter's education as an isolated item of saving, but as a part of his overall financial plan. Currently, he has a monthly take-home income of Rs 2 lakh and expenses of Rs 1.1 lakh. He invests Rs 55,000 in bank deposits and Rs 35,000 in Systematic Investment Plans, monthly.  

He needs Rs 1.5 crore for his child's college education. He can reach this amount if he starts a SIP of Rs 22,500,  assuming he invests in an equity fund yielding around 15% annualized over 15 years. He can carve this out of his current monthly SIP. He can invest the remaining Rs 12,500 in an equity fund. Over the next 25 years that will be worth Rs 4.11 crore and coupled with his Provident Fund it will be a substantial retirement corpus.

Allocating Rs 55,000 just to bank FDs is not tax-efficient. He can look at investing in debt mutual funds that are more tax efficient and have similar risk profiles.

Start as early as possible

The earlier you start, the more returns your money earns. That is the power of compounding. Let us assume you have a monthly SIP of Rs 5,000, offering 15% yield. If you start at age 25 and save till age 55, the amount will grow to Rs 3.51 crore over a 30-year period. If you start at age 45 and save till age 55, the amount will grow to Rs 13.93 lakh over a 10-year period.

Invest in equities for the long term

When it comes to planning for your child's future, there is nothing like equities to create wealth in the long term, minimal downside.

Buy the right life insurance cover: If you and your spouse are the breadwinners, then you need to be insured. The term plan will ensure that even in your absence, your child's education goes through unhindered.




SIPs are Best Investments when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich - Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

Popular posts from this blog

SBI Magnum Tax Gain Scheme 1993 Applcation Form

    https://sites.google.com/site/mutualfundapplications/tax-saving-mutual-funds-elss     Investment Details Basics Min Investment (Rs) 500 Subsequent Investment (Rs) 500 Min Withdrawal (Rs) -- Min Balance -- Pricing Method Forward Purchase Cut-off Time (hrs) 15 Redemption Cut-off Time (hrs) 15 Redemption Time (days) -- Lock-in 1095 days Cheque Writing -- Systematic Investment Plan SIP Yes Initial Investment (Rs) -- Additional Investment (Rs) 500 No of Cheques 12 Note Monthly investment of Rs 1000 for 6 months and quarterly investment of Rs 1500 for 4 quarters.

Impact of Demonetisation

The government's move to demonetise `500 and `1,000 currency notes will immediately impact reserve money and money supply in the system along with the balance sheet of the Reserve Bank of India, the sole authority in the country for accepting currency notes and coins as legal tender. ET explains the interplay of currency, reserve money and money supply. 1. What is currency in circulation? It is the total value of currency (coins and paper currency) that has ever been issued by the central bank minus the amount that has been withdrawn by it. Currency in circulation comprises currency notes and coins with the public and cash in hand with banks. It is a major liability component of a central bank's balance sheet. 2. What is reserve money? It is essentially the central bank's money . It is also called high-powered money , base money and central bank money . As per the definition, reserve money equals currency in circulation plus bankers' deposits

Birla Sun Life Tax Plan Online

Invest Birla Sun Life Tax Plan Online   An Open-ended Equity Linked Savings Scheme (ELSS) with the objective to achieve long-term growth of capital along with income tax relief for investment.   After a bad patch from 2008 to 2010, Birla Sun Life Tax Plan has made a big comeback in the last five years, with a particularly good run since 2014. The fund's rankings, which had slipped to two stars in 2011-12, recovered sharply to three-four stars in the last three years. The fund has delivered a particularly large outperformance over its benchmark and peers in the last couple of years. The fund's investment strategy focuses on a diversified and high-quality portfolio, with parameters such as capital ratios and balance-sheet strength used to judge quality. It uses a combination of top-down and bottom-up approaches to take sector/stock positions. The fund avoids highly leveraged plays. Staying more or less fully invested at all times, the fund parks roughly half of its portfoli

Should you Roll Over 1 year Fixed Maturity Plans?

The period between January and March typically sees an uptick in the launch of fixed maturity plans, or FMPs. Not this year. Instead, fund houses are busy rolling over or extending the tenure of their one- year FMPs launched last year to three years. Investors in one- year FMPs have a choice. Either redeem units or roll over to three years. If you exit now, your gains will be added to your income and taxed in line with your individual slab rate of 10, 20 or 30 per cent. If you stay invested for two more years, you pay 20 per cent tax with indexation benefit. Yields have softened in the past few months on expectations of a rate cut. If the central bank continues its soft monetary stance, yields are likely to fall further. In such a scenario, it makes sense for investors, particularly those in the 30 per cent tax bracket, to roll over their investments and lock in at a higher yield now. In a surprise move, the Reserve Bank of India cut repo rate by 25 basis

Mutual Fund Review: IDFC Premier Equity Fund

  IDFC Premier Equity Fund, which falls under the presumed high risk group of mid- and small-cap schemes, can rely on astute and timely equity picks. These make it less vulnerable to fluctuations compared with others in the category   IDFC Premier Equity Fund is designed to invest in upcoming, but promising businesses available at cheap valuations, and hold on to these businesses until they reap desired returns. The experiment has been successful so far, and IDFC Premier Equity has emerged as one of the top performing mutual fund schemes in the mid- and smallcap category of equity schemes.    While the scheme is an open-ended equity fund, i.e. open for subscriptions throughout the year, it has a unique philosophy to limit fresh inflows. Thus, while an investor can always take the systematic investment plan ( SIP ) route to invest in the scheme throughout the year, inflows through a lumpsum investment have been restricted. Since inception, IDFC Premier Equity has been opened for l
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now