Isn’t it the goal of every parent to provide the best education to their children? However, the cost of education is growing exponentially high every year. A student entering IIM-A in 2018 will be paying about Rs 19.5 lakhs for the two-year course. This is 400% higher than the fee paid in 2007. The fee will be about Rs 95 lakh in 2025 if it increases by an average 20% every year.
First frame a basic idea of what educational qualification your child might aim for and the cost it involves. Next, compute an amount that you would be able to invest regularly over a long period of time. Never forget to account for inflation factor. Always be consistent, systematic and continue investing till you reach the goal.
If you start your investment as soon as your child is born, you can create a portfolio with a variety of investments; SIP is one best option. However, if you have only about 5 year’s window, then invest in the least volatile funds (debt funds) with good liquidity that are likely to provide inflation-beating returns.
Your child’s education invest plan depends on regular contributions by you. But what if something unexpected happens to you? The only way to safe-guard your goal is by taking adequate life insurance.