We Design Your Financial Destiny


(Precious) Words of Wisdom : "Risk comes from not knowing what you’re doing." ~ Warren Buffett

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.

Briefly:
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.

childrens-day-finance-special
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.

Briefly:
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.

Briefly:
...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.

Concluding...
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.

An Investment In Knowledge Pays The Best Interest ~ Benjamin Franklin

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

Share Button

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

Subscribe via Email
Powered by Blogger.

... Three VALUABLE Tips ...

1. Fake News On Investment: Absolute Vs Annualized Return
Absolute Vs Annualized Returns
Whatever may be the source of news, always crosscheck and verify.

 


2. Tax-Free NPS Withdrawal Hiked To 60%. But Don't Say Wow.
Say No to NPS
It's a thumbs down for the NPS (National Pension System).

 


3. Many Credit Card Bills Equals Many Problems
Credit Card Problems
Warning! The joy and happiness from Credit Cards is momentary only.