InvestorQ : My son is 4 years old and I want to invest in mutual funds for his education. How should I go about it?
Karim Sahu made post

My son is 4 years old and I want to invest in mutual funds for his education. How should I go about it?

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Pratik vyas answered.
4 years ago
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: It is great that you are planning for your child’s education so soon. This is absolutely the right way to go about any investment because well begun is usually half done in the world of investment.

One can’t stress enough the benefit of an early start when saving for a long-term goal such as your child’s education. And with inflation taking its toll, education like other things is only going to get costlier by the day.

Starting early also put lesser burden on your finances because it requires a smaller outflow. For instance, if your target is Rs 25 lakh, you need to save only Rs 5,004 a month if you start now. But if you wait for six years, you will have to invest Rs 9,195 a month to reach the target. Wait for three more years and the required amount jumps to Rs 23,875.

I would suggest you start with an SIP worth Rs. 5000 in three different mid-cap equity funds.

If you continue with the investment amount and suppose your funds earn 12% interest per year, you will roughly have Rs. 20 lakh by the time your child is ready for college.

What could further help your investment is if you increase your SIP amounts every year by as much or as little as possible, keeping in line with your own income hikes.

Thus, if you increase your SIP amount by 20% every year, then you could accumulate over Rs. 1 crore in 13 years.

Funds you could invest in:

- L&T Midcap Fund

- Aditya Birla Sun Life Small & Midcap Fund

- Mirae Asset Emerging Bluechip Fund

- Canara Robeco Emerging Equities

- Aditya Birla Sun Life Pure Value Fund

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