Why you should plan for your child’s education? College is costly, and it will only become more so in the future. Every parent wishes they could provide their children with the best education money can buy. Parents are generally unprepared for their children's higher education because they focus on short-term goals. They end up stretching their finances by taking out loans that may be beyond their means to repay, as well as pledging or selling their assets. As a result, it is critical to begin investing in your child's future with a child insurance plan as early as possible. Building a substantial education fund for your child’s education investment plan starts early. Along with getting a head start, diversifying your investment portfolio is critical to achieving the financial goals you've set for your child's education investment plan. The sooner you begin contributing to your child's education fund, the larger the corpus will grow, allowing your child to pursue their dreams without financial constraints. You can also have a monthly investment scheme.
What to look for in an investment? The three features to look for before investing in child education plan are SLR (Safety, Liquidity, and Returns). The issuer's ability to repay the principal and interest is referred to as safety. The lower the return, the higher the safety. In contrast, the higher the risk, the higher the reward. A secure investment is one in which your life is unaffected by the amount you invest or the amount you lose. Never put money into an investment that you can't afford to lose. While the investment you're making is safe, you want to make sure that no matter what happens to it, you'll be able to live comfortably. Budgeting everything is a great way to figure this out. Liquidity in financial markets refers to how quickly an investment can be sold without depreciating its value. The more liquid an investment is, the easier it is to sell it for fair value or current market value (and vice versa). When all other factors are equal, liquid assets trade at a premium and illiquid assets at a discount. The most liquid items on a company's balance sheet are typically listed first. As a result, cash is always listed first in the asset section, followed by other types of assets like Property, Plant, and Equipment. Returns are the earnings generated by an investment over time. Return on investment (ROI) is a performance metric used to assess an investment's efficiency or profitability, as well as to compare the efficiency of multiple investments. ROI attempts to directly measure the amount of profit made on a given investment in relation to its cost.
Which financial instrument to invest in? Equity shareholders, government securities, corporate debt, bank deposits, fixed income, National saving certificates, post office time deposits, insurance, mutual funds, and money market instruments are among the investment options available today.