Children’s Day: For all of us, the arrival of a child in the family brings a lot of happiness. With happiness comes a lot of responsibilities, especially for parents. We all have this kind of responsibility but uncertainty can spoil the financial health of the family. If we invest in bank deposits or any other instruments of savings, we will be left with nothing due to inflation. By investing our savings, we assure that our money will be safe. Also, good returns will also be available on it. With this our children will also be financially secure. You can follow the following things to secure the future of your children.
Know Your Plan
It is always advisable to start saving from an early age. Before we start investing, planning is needed. When you start investing for your child’s bright future, planning is the first step. We have to understand that how much fund will be required for expenses like child’s education, higher education and marriage.
Before taking investment decisions, we have to decide our goals. All our investments should reflect the need. Although the goals of every person are different, but they can be divided into long term and short term goals.
For example, long-term goals for a child may include pursuing higher education abroad, starting a business or getting married. Investing in equity to meet the long term goals of the child will fetch you good returns. To achieve this goal, it is advisable to invest in instruments that are not at risk of falling in real value. If there is a positive change in them, then it gives excellent returns. This reduces the effect of inflation. In such a situation, you should avoid plans with low returns like endowment plans and public provident funds.
Investing inreal estate
While choosing an option like real estate for investment, you should keep in mind that you have to exit it two years before when you really need it. With this you will have time to get out of negative growth. For example, if you need money for a child’s marriage, you can sell the land or house only when the child is in college and invest the money in a low-risk option like debt funds.
< pstyle=”text-align: justify;”>Short term goals for the child include school studies, extracurricular courses, training, participating in competitions in the country. For short term goals, you should invest in funds that have liquidity. For such goals, savings bank deposits, short term FDs are better as returns are assured on its real value.
Choosing the Right Investment Plan
Merely choosing an investment option is not enough, taking care of your income, you should also consider aspects like risk, liquidity, capital appreciation. It is prudent to choose an investment option on this basis. You should get such a return from the investment that it can meet all your needs over time. You should avoid such investments in which the risk is high. By opting for such a plan, you will not benefit, on the contrary, your risk will increase.
Insurance is the perfect way to keep your child financially secure. You must have a term plan covering the appropriate amount and tenure. Through this term plan, you should take a cover of at least 10 to 12 times of the annual income. Also, you have to take care of your liability in this.
Other investment options for children&zwj
You can open a savings account at a place where interest is compounded. This will give you better returns. If you invest in mutual funds, then it is also good because they are very systematic, as well as cheaper than other instruments. You can choose balanced open ended scheme which will provide more liquidity and closed ended scheme will help in saving money for long term goals. When you decide to invest in mutual funds, it should be remembered that investing more in equity will increase your risk. However, it also depends on whether you have invested for long term or short term. Long term investments reduce the risk associated with equity.
You can also invest in gold
Investing in gold is also a good option as no Indian marriage is complete without it. For this, you can invest in Gold ETF or you can also buy physical gold. It can also be bought on the stock exchange. With this your gold is also safe and you also get liquidity.