Investing for yourself and your child's future

When are you planning to invest for your child. General parent sentiment is to start investment for there child very early, probably before their child is born. Along side you need to also look at saving some money for the life after work.

Start early..

Its always a good plan to start in life to invest in insurance policies, mutual funds and health funds so that you do not find yourself in a helpless situation later in life.

Go for atleast 2 investment options one for yourself and one for your child before you reach 27. This would ensure you have sufficient time and life before you to grow your investment exponentially at the end of say 20 years.

1. Set yourself the priorities.

     - Marriage cost of your children

     - Education

     - Income after retirement

     - Health emergencies

     - Travel funds

2. Determine the approximate inflated cost that for each of your priorities.

3. Calculate the affordability and time factor as well so that you can put your money in a strategic manner on various investment products on a consistent basis so that none of your priorities are compromised.

4. Some best practice examples that you can take a look at and hopefully will help.

-Always calculate the total returns that you would see at the maturity versus the sum that need's to be invested every month/quarter/half-yearly or annually.

E.g. Policy A would give me 15 lakhs return and needs 5000 per month for 15 years
My total earning per month is 50000 (say)

Policy B would give me 12.5 lakhs and needs 50000 annually (equates to approximately 4200 per month) for 15 years

I would receive 17.5 lakhs on maturity at the end of 15 years term given that I commit 20% of my monthly take home on today's date. This sum if invested when your child is at 5 years would give a good sum of money for any of the priorities mentioned above.

All above figures are indicative only.

You could also do a similar math and start planning for a long term. Happy investing!