Question: I am 32 years old and have a 3-year old kid. I want to accumulate Rs 30 lakh for my child's future education. How should I invest?
Anil Rego, CEO of Right Horizons, a wealth advisory firm: The current age of daughter is three years. The higher education (graduation) need will commence post 16 years and hence there is gap of 14 years to accumulate corpus. This is a long-term goal and hence we can consider investing in equity mutual funds via SIP mode (investing monthly).
The amount required for education as on today is Rs.30 lakh.
The amount after considering inflation post 14 years would be Rs.82.5 lakh.
Hence the lump sum amount to be invested today to build this corpus considering 10 per cent returns would be Rs.21.74 lakh.
The amount required to be invested yearly would be Rs.2.95 lakh and monthly would be Rs.24,000. For Rs 30 lakh corpus, we need to increase the SIPs accordingly.
So we suggest to invest about Rs 25,000/ month in mutual funds via SIP.
We can consider investing in largecap fund like SBI Bluechip fund, ABSL Frontline Equity fund and multicap funds like Franklin India Prima Plus, SBI Magnum Multicap, Motilal Oswal Focused 35 etc.
Balanced fund like ICICI Pru Balanced fund also can be invested on a smaller portion to reduce the risk
Disclaimer: Investors are advised to make their own assessment before acting on the information.
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