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(Funny) Words of Wisdom : "My wallet is like an onion, opening it makes me cry." ~ Anonymous

Children's Day Special: You Have To Do NOTHING Special

Yes, you read the blog title right. You DON'T have to do anything different for your child.

As I have repeatedly advocated, when it comes to your personal finance and investments...
... what is good for you, is good for your child too
... the word 'child' in any financial product is just a marketing gimmick.

In other words...
... do your financial planning as per your financial profile
... avoid the so-called 'child-oriented' insurance policies, investments, mutual funds, etc.

Do this and you would have definitely done 'something special' for your child.

A. In my blog post The Best Insurance Policy for your Child, I had suggested how you should secure your child's future.

Step 1: Buy a large TERM plan for self.

Step 2: Make child the beneficiary of the above policy.

Step 3: Invest the balance amount [= premium for the child / normal plan minus the premium for the term plan] in pure investment products such as PPF, EPF, debt MFs, FDs, equity MFs etc. (the suitable mix depending on one's risk-appetite and time frame).

Step 4: The maturity of the term policy and various investments should be when the child's higher education or marriage is due.

What is GOOD for you, is GOOD for me too...

B. In my blog post How to make your child a crorepati, I had listed down various options.

Option 1 : Fixed Income Product - Depending on your tax bracket, invest around Rs.28,500 to 35,000 per month for 15 years.

Option 2 : Gold - For 15 years buy almost Rs.31,000 worth of gold every month.

Option 3 : Insurance -  Pay around Rs.32,500 as monthly insurance premium, to receive Rs.1 crore on policy maturity, after 15 years.

Option 4 : Property - After making a down-payment of Rs.5 lakhs, pay around Rs.21,500 monthly EMI (for a 15-year home loan of Rs.20 lakhs).

Option 5 : Balanced Mutual Fund - Just Rs.19,000 per month would give you Rs.1. crore for your child after 15 years.

C. In my blog post The best money tips for your child's bright future, I had warned you against the common pitfalls.

...You often invest in their name. This is wrong.

...You often invest in Fixed Deposits. This is wrong.

...You often invest in 'child' insurance plans. This is wrong.

...You often buy Gold for their marriage. This is wrong.

One common behaviour among most parents, that I find totally "unacceptable" is...
... they want their kids to study very hard and slog, to get into the best of the colleges;
... yet they themselves will not put in any hard work, to best manage their money.

You Learn A Lot By READING... And Even More By SHARING.

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Ignorance is like a SIGNED BLANK CHEQUE... anyone can MISUSE it.

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