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"Do not confine your children to your own learning, for they were born in another time.”- Chinese Proverb
As a parent, I want my daughter to be happy and successful. I also know that education is one the important factors which will help my child to achieve her goals. Quality Education bolsters the child’s future. It has the power to mold their future in ramifying a successful career. Investing in our children’s future is the cornerstone in preparing them to become successful and prominent members in our social framework. So we as parents need to know our child's dreams and aspirations. Also, be ready with financial requirements. Here are some thoughts and tips which will guide you for your child's educational future.
Education planning is one such activity to equip our children with main success pillar. But the horses of ambitions gets impediments due to steamy inflation. The cost of studying MBA, medicals or engineering can be very demoralizing. Here are some cost details relating to overseas studies:
*MBA in University like Harvard or Stanford and Wharton will cost approx. USD 200,000
*Engineering in the US will cost approx. USD 200,000 for 4 years.
*Medicals college fees in the UK will cost approx. USD 200,000 for 5 years.
In India, the cost of MBA – approx INR 10 lacs; Engineering is approx 5 lacs and medicals is approx 10 lacs for 5 years. Also, we cannot underestimate the cost of even pre-schools. In last 8 years, we have witnessed international curricula such as IB and IGCSE are growing in popularity. Pre-school fees in India may go as high as INR 35000 to 40000 per month.
Education Inflation in India is approx. 10% while in developed countries is approx. 4 to 5 % per annum. One can project the cost of doing above education courses for your child at their appropriated ages in future. The first thing to put down is how much would you want to spend on his education because identifying the country 15-20 years before the goal can be quite redundant. Say, if you wanted to spend 20 lakhs in today’s value – this would be equivalent to close to 85 lakhs after 15 years if you assume an inflation of 10%. With such high fees structure, timely and proper planning is of paramount importance .One needs to start saving immediately on a monthly/ quarterly basis.
Here are four steps which will help you to plan your child’s future:
1. Determining the minimum required rate of return to achieve the goal
2. Asset allocation as per the risk needed for return
3. Periodic Portfolio reviews and finally
Apart from planning, parents also need to find out if they are on the same page as child’s aspirations. There are different ways where parents can understand their child’s interests. Like, discussing with the child about their own experiences and thoughts. Exploring different career options by reading story books and solving puzzles. Also, you need to know the cost of education in different countries. Hope these thoughts help you.. Let me know your views too..
Take Care :)