The future of one’s child is a major long-term objective for parents and they should definitely start planning right away. Here are some ways you can build a good investment corpus for your child’s future.
- Equity Based Investments- Investing for the future of your child is certainly a goal for the longer haul. You can try investing in equities for getting higher returns over a longer period of time even though these have market risks in a shorter time frame.
- Always keep inflation in mind- The money you need for your child’s wedding or higher education in recent years will increase over a period of one or two decades. Always keep in mind that inflation will rise over the years and hence you should keep this firmly in mind while working out the amount you will need for your child’s education or wedding in the future.
- Diversity investments- Make sure that you have the right mix of investments across mutual fund schemes. Choose diversified products for better returns. Invest a bigger chunk into largecap mutual funds and you can also open a PPF (Public Provident Fund) account in the name of your child as per experts.
- Periodic Investments- SIPs (Systematic Investment Plans) are the best way to keep investing on a periodic basis without overdoing it. This is way better than shelling out a lump sum amount upfront. SIPs also bring in greater discipline when it comes to investing for future goals.
- Re-balance your investment portfolio- At periodic intervals, it is very important to reconsider and re-balance your investment portfolio. One simple method is to have the fund balance divided into 36 installments and thereafter execution of the Systematic Transfer Plan as per experts.