to plan for education is to build for the future.

to plan for education is to build for the future.

Do you have a child already? Or are you expecting one? Planning for your child’s education is an important subject when it comes to giving them a future. And when the subject of future comes into play in the discipline of finances, inflation is a term to look out for.

Generally, the cost of education advances faster than inflation. Thus, there is a need to start planning as soon as one can to take advantage of the power of compounding over time and reducing the monthly commitment required. Education planning can be a long process with a time range of 15 to 20 years. The length of time is crucial as it gives one the comfort of riding out the volatility of different market cycles.

One of the more popular vehicles for education planning is an endowment. The advantages of such a finance vehicle is that it provides savings, protection and it is almost risk-free. However, such a vehicle might yield less attractive returns for parents who are more au fait with markets and other high risk investment tools like high dividend stock, mutual funds or unit trusts. With such vehicles, it is highly vital to conduct early planning which provides the investor with the flexibility and the opportunities to optimize risk return on the strategies chosen.

Lastly, the most important factor in keeping to a long term investment/saving strategy is to have discipline. To be able to set aside money on a monthly basis for a long period of time requires one to have the discipline to keep contributing to the dedicated fund. As the amount of money grows, it becomes very tempting and easy to find reasons to touch the savings account that was set up to plan for the child’s education.

Don’t wait, don’t hesitate. Contact us now if you want to start planning!


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