Wednesday, December 15, 2021

Confession Series - 3

Confession Time !!

When my son was born, within 3 months of his birth, like any other responsible parent ,I took a Child Education policy of 18 lakhs, premium Rs 53000 p.a.
The rationale behind going for this amount was, since I am an Engineer by education and Engineering fees in my days (1998) costed approximately Rs 200000 for 4 years, I thought that even if the cost of education grows by 11% which is a fair assumption , I will still be comfortable with the investment I have made.
I made 2 mistakes here
First one I assumed, that the stream that my son would pursue would have similar expenses like Engineering but today he has taken up 'Bachelor of Design' which is costing me Rs 25 lakhs, so I have to fill the deficit of 25-18 = 7 Lakhs
Hence when you are planning for your child education, check out the current expenses of a costly stream like Medical and then make your investment accordingly. Also note that Foreign Under-Graduation expenses are approximately 5 times of that in INDIA
Second, I invested in a traditional policy, wherein along with investment, it also had insurance coverage, hence the returns are just approximately 8%.
If I had 18 years still to go for my son's education , I should have invested in *Equity Mutual Funds* and with the same outgoing from my pocket every year, I would have accumlated Rs 34 lakhs.
So plan your Goals Correctly and Early !!
Please share this with people you care for, especially the Young Population 
Happy Investing !!


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