SIP Compounding benefits: The cost of education is increasing at the rate of double digit annually. In such a situation, preparation for future higher education has to be done from now itself. Expert has selected 10 special schemes of mutual funds for you, in which you can invest for the long term. One time return of lakhs will be available at the time of need.
SIP Compounding benefits: There has definitely been relief from inflation in the month of October, but the crisis of inflation is still intact in the world. In the UK, the inflation rate crossed 11 percent. Speaking on Zee Business’ special program Money Guru, Firoz Aziz, Deputy CEO of Anandrathi Wealth Management said that education inflation is growing at a double digit pace. Especially, the rate of increase in higher education fees is faster. The way the rupee is falling, the cost of education in international schools is increasing. In such a situation, it is important that keeping in mind the future of the children, investment preparations should be started from now itself for the expenses of their higher education.
Start investing as soon as possible
Firoz Aziz said that it is important to keep some things in mind before planning for studies. For example, how old is your child. The younger the age, the smaller the start of investment can be. As you get older, you have to save more money. The period of investment is also important depending on the age of the child. How do you dream about their future studies, according to that the budget will also have to be made for the expenditure. Before starting investment for studies, important factors like education inflation rate, savings every month, rupee depreciation, liquidity risk have to be taken into consideration.
Education inflation in double digit
Since, the education inflation rate is in double digit. In such a situation, your return should also be of double digit. For this, there cannot be a better scheme than mutual funds. If your savings are for the next 10 years, then to get an average return of 12-14%, at least 80% will have to be deposited in equity funds. Can deposit 20 percent in debt.
Firoz Favorite Fund
Firoz Aziz has chosen these schemes for the long term keeping in mind the education of the children. Include different funds while building your portfolio. One should not blindly trust any one fund.
DSP Equity Opp. Fund
HDFC Flexicap Fund
Kotak Emerging Equity Fund
SBI Focused Equity Fund
SBI Contra Fund
DSP World Mining Fund
Franklin Ind. Fund Feeder-Frank US Opp.
ABSL Money Manager Fund
UTI Money Market Fund
SIP of 5000 will become 14 lakhs
For example, if we talk about SBI Focused Equity Fund, the three-year average return is 17%, the five-year average return is 14.61% and so far it has given an average return of 15.51%. Its NAV is Rs.257. You can start SIP with as little as Rs 500. The size of the fund is 28407 crores. If a SIP of Rs 5000 is started in this fund from today, then after 10 years a total of Rs 14.45 lakh will be received. The total amount of investment will be Rs 6 lakh, on which a return of Rs 8.45 lakh will be received. The net return is 14.45 lakhs. In future, this amount will help in the higher education of the children.
