It is a significant thing to investigate various savings options and picking the best for the future needs.
However, when you plan for long-term future needs, e.g., education and marriage of your kids; you have sufficient time in hand.
Investment gurus say that when one saves for the kids, diversification is the key to success.
Also, they insist that the investment should start as early as possible; possibly immediately after the birth.
Thus, there are at least 18 years in hand where the funds can be cleverly invested to create a large corpus.
Marriage and higher education are the two most significant expenses in the later age. Start saving for it today!
Various investment choices
Statistics reveal that the cost of education has increased more than 150 percent in the past two decades. The trend looks similar in the coming years as well. Hence, invest for the child’s future now.
Here are some excellent choices.
Equity mutual funds
The yields are phenomenal here if you stay invested for a long time. Hence, for the future planning of your kids it is the right choice.
The mode of investment should be SIP (Systematic Investment Planning). Calculations say that an investment of 5000 rupees every month for 20 years can generate a considerable sum of 50 lakh+ with the assumption of 12 percent return per annum, whereas the cost of investment will be 12 lakhs.
Actual figures may be more than this depending on the market performance. Since you stay invested longer, the ups and downs get moderated.
Though they are more relevant to fulfill the short-term needs, a perfect balance of debt instruments and equity funds can create wonders.
Other than bond funds with lower maturity, you can invest in mutual funds and short-term funds as well. The returns are higher than conventional fixed deposits, and the risk is either very low or moderate.
Thus, money that is needed in the near future can be invested in debt funds.
Thus, invest early and invest smartly in fulfilling the financial needs.