AMFI Registered Mutual Fund Distributor | SEBI registered Investment Adviser
                Fundsupermart.com | Global   
SEARCH 
  Help us contact you
  *   
  *   
     
 
Funds and Personal Finance
   SUBSCRIBE TO E-NEWSLETTER
Subscribe
Share |
  Email
Print
more
Investment for Children - Start Your Child Plan March 27, 2012
A penny earned is a penny saved, the famous English quote is a reflection of current times. Inflation combined with slower economic growth with the ever-increasing day-to-day expenses takes a toll on the common man or the aam-admi!
Author : Debanjan Guha Thakurta


 Need to Invest in Child Plans

Need to Invest in Child

“A penny earned is a penny saved”, the famous English quote is a reflection of current times. Inflation combined with slower economic growth with the ever-increasing day-to-day expenses takes a toll on the common man or the ‘aam-admi’!

Being a parent your child’s dreams and aspirations are of utmost importance to you, but what if you fail to do so? So wake up from the dream and start investing right now for a brighter and better tomorrow for your child.

Everything has a price attached to it and education is no exception. Quality education is still affordable in India. But, do you have enough funds to gift your child the perfect career 20 years down the line?


Table 1: Estimated university education costs

 Countries

Education

2012-Total Costs

2022-Total costs

2032-Total costs

Inflation (p.a.)

India

Medicine

 2,000,000

  3,581,695

   6,414,271

6.00%

India

Engineering

240,000

  429,803

    769,713

6.00%

India

MBA

600,000

  1,074,509

  1,924,281

6.00%

U.S.

Engineering

3,000,000

  4,031,749

  5,418,334

3.00%

 

 

 

 

 

In the above table we would like to highlight the estimated costs of the most demanding courses in India, compared with the US, taking the rate of inflation fixed at 6% and 3% for both the countries.
With the ever increasing college and post-graduate education, we are looking at events in the foreseeable future that will need a huge amount of money to be laid out. Take a closer look and you can easily see that costs have escalated considerably from today.

Mutual Funds

If you are willing to save for your child's education over the next 10 - 15 years, then you have a good time horizon to plan your investments. You have the option to choose between numerous funds available in the market. Besides this, one can choose according to the risk appetite. Today, many fund houses offer goal based mutual funds that are specifically designed to mature when your children is ready to join college.

A mutual fund is a better than insurance linked investment product as it is professionally managed, without an entry charges/load and provides excellent returns over the long term.
An investor has got two options to invest into the Mutual Funds- one is by investing it through a lump sum manner or start investing using the Systematic Investment Plan (SIP) option.


Investment through Lump sum

Table 2: Investment portfolio after 10 / 20 years based on following returns

 Time Horizon

Annual rate of return on portfolio - 8%

Annual rate of return on portfolio - 10%

Annual rate of return on portfolio - 12%

(Lower risk)

(Medium risk)

(Higher risk)

10 years

                   1,659,018

                    1,380,899

    1,153,210

20 years

                   1,376,170

                        953,441

    664,947

Source: iFAST compilations.

We have taken Medical to be the base course as maximum amount of money is required to pursue it.  The above table gives you a precise picture of how much one need to invest in lump sum manner in order to reach the desired amount of money. The table also shows that longer the time horizon, the lesser is the amount you need to invest.
Systematic Investment Plan (SIP) is a simple and a powerful tool which is used to accelerate the growth of saving and investment. SIP is an investment option through which an investor can invest in monthly, quarterly and in a half yearly manner. The minimum amount an investor can invest is as little as 500 rupees.


Investment through SIP (Monthly)

Table 3: Investment portfolio after 10 / 20 years based on following returns

 Time Horizon

Annual rate of return on portfolio - 8%

Annual rate of return on portfolio - 10%

Annual rate of return on portfolio - 12%

(Lower risk)

(Medium risk)

(Higher risk)

10 years

19578

17485

15570

20 years

10890

8447

6484

Source: iFAST compilations.

The above table shows that how much one requires investing through SIP mode using differential rates of interest and time horizons.

Finally, More risk you take, the more quickly your money will grow; longer your time frame, lesser you have to save!


Disclaimer: iFAST and/or its content and research team’s licensed representatives may own or have positions in the mutual funds of any of the Asset Management Company mentioned or referred to in the article, and may from time to time add or dispose of, or be materially interested in any such. This article is not to be construed as an offer or solicitation for the subscription, purchase or sale of any mutual fund. No investment decision should be taken without first viewing a mutual fund's scheme information document including statement of additional information. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Investors should seek for professional investment, tax, and legal advice before making an investment or any other decision. Past performance and any forecast is not necessarily indicative of the future or likely performance of the mutual fund. The value of mutual funds and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice. Please read our disclaimer on the website.Please read our disclaimer in the website. Risk Factors: Mutual funds, like securities investments, are subject to market risks and there is no guarantee against loss in the Scheme or that the Scheme’s objectives will be achieved. As with any investment in securities, the NAV of the Units issued under the Scheme can go up or down depending on various factors and forces affecting capital markets. Past performance of the Sponsor/the AMC/the Mutual Fund does not indicate the future performance of the Scheme. The name of the Scheme does not in any manner indicate the quality of the Scheme, its future prospects or returns. Please read the Statement of Additional Information and Scheme Information Document carefully before investing.



Comments (1) | Comment on this Article
 (Click on Comments/Comment on this Article to show or hide comments/post a comment)
USEFUL LINKS
Recommended Funds
Recommended Portfolios
Chart Centre
Risk Profiler

<%@ page import="com.fin.common.web.util.*"%> <%@ page pageEncoding="UTF-8" %> <%@page import="com.fin.common.manager.fund.FundManager"%> <%@page import="com.fin.common.dao.fund.FundInfoBean"%> <%@ include file= "pageTitle.jsp" %> <% I18NSession i18n = I18NSession.getI18NSession(session); boolean onLoadScript=false; // defining the default pages for the template if (main==null || main.equals("")) main="main.jsp"; if (header==null || header.equals("")) header="header.jsp"; if (footer==null || footer.equals("")) footer="footer.jsp"; if (leftBar==null || leftBar.equals("")) leftBar="leftBar.jsp"; if (leftBar2==null || leftBar2.equals("")) leftBar2=""; if (body_onload==null || body_onload.equals("")) body_onload=""; else { if (E2EEUtil.isE2EEStatusActiveFSM()) { onLoadScript = true; if (body_onload.lastIndexOf("/")!=-1) body_onload = body_onload.substring(body_onload.lastIndexOf("/")+1,body_onload.length()); body_onload = "javascript:"+body_onload+"()"; } } //System.out.println("Leftbar *******"+leftBar); Boolean isSecure = (Boolean)request.getAttribute("common.template.isSecure"); if ( isSecure == null ) isSecure = new Boolean(false); // Default secure = off %> <% String requestedURL = request.getAttribute("javax.servlet.forward.request_uri").toString(); %> <% if (request.getAttribute("article")!=null) { com.fin.common.dao.content.Article1Bean article = (com.fin.common.dao.content.Article1Bean)(request.getAttribute("article")); String Articleurl="http://www.fundsupermart.co.in/main/research/viewHTML.tpl?articleNo=" + article.getArticleno(); %> Fundsupermart.com -<%=article.getTitle()%> <% }else if(request.getParameter("sedolnumber")!=null && !"".equalsIgnoreCase(request.getParameter("sedolnumber").toString().trim()) ){%> <% FundManager fm = new FundManager(); FundInfoBean fundinfoBean1=fm.loadFundInfo(request.getParameter("sedolnumber").toString().trim()); %> fundsupermart.com -<%=fundinfoBean1.getFundName() %> <% }else if(strPageTitle!=null && !"".equals(strPageTitle)){ %> <%=strPageTitle %> <% }else{ %> fundsupermart.com -<%=ProjectProperty.get("common.tagline")%>|<%=ProjectProperty.get("common.taglineExt")%> <% } %> <% if(requestedURL!=null && ProjectProperty.get("fsm.metatag.main.school.gettingStarted")!=null && ProjectProperty.get("fsm.metatag.main.school.gettingStarted").toString().indexOf(requestedURL)!=-1){ %> <% if(request.getParameter("PageID")!=null && request.getParameter("PageID").toString().equalsIgnoreCase("1")){ %> <% }else if(request.getParameter("PageID")!=null && request.getParameter("PageID").toString().equalsIgnoreCase("2")){ %> <% }else if(request.getParameter("PageID")!=null && request.getParameter("PageID").toString().equalsIgnoreCase("3")){ %> <% }else if(request.getParameter("PageID")!=null && request.getParameter("PageID").toString().equalsIgnoreCase("4")){ %> <% } %> <% }else if(requestedURL!=null && ProjectProperty.get("fsm.metatag.main.school.basics")!=null && ProjectProperty.get("fsm.metatag.main.school.basics").toString().indexOf(requestedURL)!=-1){ %> <% if(request.getParameter("PageID")!=null && request.getParameter("PageID").toString().equalsIgnoreCase("1")){ %> <% }else if(request.getParameter("PageID")!=null && request.getParameter("PageID").toString().equalsIgnoreCase("2")){ %> <% }else if(request.getParameter("PageID")!=null && request.getParameter("PageID").toString().equalsIgnoreCase("3")){ %> <% }else if(request.getParameter("PageID")!=null && request.getParameter("PageID").toString().equalsIgnoreCase("4")){ %> <% }else if(request.getParameter("PageID")!=null && request.getParameter("PageID").toString().equalsIgnoreCase("5")){ %> <% }else if(request.getParameter("PageID")!=null && request.getParameter("PageID").toString().equalsIgnoreCase("6")){ %> <% } %> <% }else if(requestedURL!=null && ProjectProperty.get("fsm.metatag.main.school.investing")!=null && ProjectProperty.get("fsm.metatag.main.school.investing").toString().indexOf(requestedURL)!=-1){ %> <% if(request.getParameter("PageID")!=null && request.getParameter("PageID").toString().equalsIgnoreCase("1")){ %> <% }else if(request.getParameter("PageID")!=null && request.getParameter("PageID").toString().equalsIgnoreCase("2")){ %> <% }else if(request.getParameter("PageID")!=null && request.getParameter("PageID").toString().equalsIgnoreCase("3")){ %> <% }else if(request.getParameter("PageID")!=null && request.getParameter("PageID").toString().equalsIgnoreCase("4")){ %> <% }else if(request.getParameter("PageID")!=null && request.getParameter("PageID").toString().equalsIgnoreCase("5")){ %> <% }else if(request.getParameter("PageID")!=null && request.getParameter("PageID").toString().equalsIgnoreCase("6")){ %> <% }else if(request.getParameter("PageID")!=null && request.getParameter("PageID").toString().equalsIgnoreCase("7")){ %> <% }else if(request.getParameter("PageID")!=null && request.getParameter("PageID").toString().equalsIgnoreCase("8")){ %> <% }else if(request.getParameter("PageID")!=null && request.getParameter("PageID").toString().equalsIgnoreCase("9")){ %> <% }else if(request.getParameter("PageID")!=null && request.getParameter("PageID").toString().equalsIgnoreCase("10")){ %> <% }else if(request.getParameter("PageID")!=null && request.getParameter("PageID").toString().equalsIgnoreCase("11")){ %> <% } %> <% }else if(requestedURL!=null && ProjectProperty.get("fsm.metatag.main.school.financialPlanning")!=null && ProjectProperty.get("fsm.metatag.main.school.financialPlanning").toString().indexOf(requestedURL)!=-1){ %> <% if(request.getParameter("PageID")!=null && request.getParameter("PageID").toString().equalsIgnoreCase("2")){ %> <% }else if(request.getParameter("PageID")!=null && request.getParameter("PageID").toString().equalsIgnoreCase("3")){ %> <% }else if(request.getParameter("PageID")!=null && request.getParameter("PageID").toString().equalsIgnoreCase("4")){ %> <% }else if(request.getParameter("PageID")!=null && request.getParameter("PageID").toString().equalsIgnoreCase("5")){ %> <% }else if(request.getParameter("PageID")!=null && request.getParameter("PageID").toString().equalsIgnoreCase("7")){ %> <% }else if(request.getParameter("PageID")==null || (request.getParameter("PageID")!=null && request.getParameter("PageID").toString().equalsIgnoreCase("")) ){ %> <% }else if(request.getParameter("PageID")!=null && request.getParameter("PageID").toString().equalsIgnoreCase("10")){ %> <% }else if(request.getParameter("PageID")!=null && request.getParameter("PageID").toString().equalsIgnoreCase("12")){ %> <% } %> <% }else if(requestedURL!=null && ProjectProperty.get("fsm.metatag.main.research.listArticles")!=null && ProjectProperty.get("fsm.metatag.main.research.listArticles").toString().indexOf(requestedURL)!=-1){%> <% if(request.getParameter("categoryid")!=null && !request.getParameter("categoryid").toString().equalsIgnoreCase("") && request.getParameter("categoryid").toString().equalsIgnoreCase("17")){ %> <% }else if(request.getParameter("categoryid")!=null && !request.getParameter("categoryid").toString().equalsIgnoreCase("") && request.getParameter("categoryid").toString().equalsIgnoreCase("26")){ %> <% } %> <% }else if(requestedURL!=null && ProjectProperty.get("fsm.metatag.main.research.viewHTML")!=null && ProjectProperty.get("fsm.metatag.main.research.viewHTML").toString().indexOf(requestedURL)!=-1){%> <% if(request.getParameter("articleNo")!=null && !request.getParameter("articleNo").toString().equalsIgnoreCase("") && request.getParameter("articleNo").toString().equalsIgnoreCase("149")){ %>