As the family expands the need for systematic investment planning arises. Experts say that those who think about it in time get big benefits in the long run.
The birth of a child is certainly a moment of joy and pride, but finance experts call it a moment of investment opportunity as well.
Interestingly, you don’t need to keep aside a hefty sum for it. On the contrary, you can start with a small amount, e.g. one thousand rupees per month.
What investment would give you good returns on such a small sum? Well, mutual funds have that power and capability.
You ask any expert about the best way of investing in mutual funds. He will emphasize on two aspects; consistency and patience.
You can afford to raise a child only if you invest systematically
The birth of a child makes you joyous, but at the same time, you have worries back of the mind. Raising a child needs a lot of money. Especially, you need big sums on the milestone events like school and college admission, high education, and marriage.
Keeping in mind the increasing inflation rate, the traditional investment methods (Fixed Deposit or Recurring Deposits) won’t work. Post tax returns on such investments will always be less than the inflation rate. Thus, the money you get at the maturity won’t make any sense.
To meet the future financial requirements of your kid, mutual funds are the right avenue of investment.
Start investing systematically, right from the first month
The best investment planning for your child is to invest a fixed amount every month starting from the first month after the childbirth.
Though the investment can be started with as low as one thousand rupees, it depends on your affordability.
Choose a fund that has performed consistently well in the last few years. You can continue with it or change anytime if you are not happy with the performance. For expert advice it's better to rely on a trusted financial planner like iplan.co.in.
The biggest benefit of starting the investment with the childbirth is that you get a long tenure to invest. Since there are at least 25 years in hand, the power of compounding brings big rewards.
When you invest for the kids, you can’t follow the ‘invest and forget’ approach. Rather, it needs a great attention. Do not withdraw from this fund in any case. Keep on switching to high-performance funds to maximize the yield.
This is the secret of saving huge money for the kids and living a worry-free life.