Before knowing the steps to invest your money for your children education in India, you must know why should you invest for bright future of your children. You know higher education is must for your child's future. If you think big dream regarding your child, you need big capital for this. No one can become doctor, engineer or higher professional with your small savings. There are main two reasons of this.
# 1. There is increasing trend of Educational Expenses.
Just go to any private school and ask total annual fees and compare it with your school fees. I remembered, I paid only Rs. 5 per month in my fifth stand class. But now, many private school is demanding Rs. 5000 for first class education.
# 2. There will be more costly education in next 10 years.
Next 10 years will be more bad because today education will more costly in next 10 years due to inflation. If today MBA rate is Rs. 5 Lakhs, it may be Rs. 10 Lakh in next 10 years. In Next 20 years, its cost is Rs. 20 Lakh
Due to above reason, it is necessary to make correct investment plan for child education.
Following are its simple steps.
1. Fix the Need of Money in the end of 10 or 20 years.
First of all you have to fix your requirement. What do you want to get after 10 years or 20 years. For example, you need 20 lakh Rs. after 10 years. If you have Rs. 10 Lakh at this time, you can take the risk free step by investing money in Kisan Vikas Patre of Post office. If you have only Rs. 1,00,000. You need surely take risk. Because for converting Rs. 1,00,000 into Rs. 20 Lakh, you need to do investment in business. Only business has power to convert your Rs. 100,000 into Rs. 20,00,000 in 10 years. Never go for playing gambling. It will make your whole money zero.
2. Diversify Your Investment
Never invest your whole money in one investment project. Diversify will give you better result. For example, if you have Rs. 15 Lakh, you can invest it with following ways.
a) 50% in Govt. FD
b) 22% in Real Estate
c) 10% in Mutual Funds
d) 18% in Business
3. Fix the Annual Return Expectation
It is simple saying more risk more profit. So, fix your annual return expectation, if you need fast money, you need to invest in risky business projects.
4. Early Investment will give Better Results
There are lots of long term plan where you can invest your money and it can give the money as per your requirement. For this, you have to make your monthly investment habit. For example, you can open 5 or 10 year RD account or Mutual Fund account where you can invest monthly and get big reward.
Reference of Books