One Smart Action I Took When My Child Was Born

We work so hard for earning money and our money should work hard for us too. Investing is how we take charge of our financial security. It allows us to grow our wealth but also generate an additional income stream if needed ahead of retirement.

In today’s lifestyle, finding a good investment option is very difficult. We have got so much fraud news these days so it is very important to dig into the details first. The best option if we are looking for investment in the financial market is the Mutual fund. I find Mutual Funds very easy to understand and because of their special features: easy availability, risk containment, liquidity, transparency, professional management, and decent returns, it attracts the small investors mainly of the average class.

When you get the news of arriving a new baby is set to arrive in a household, everybody is a bundle of nerves – mom, dad, brother, sister and even the grandparents.

It is known that after the arrival of a baby in the family the expenditure increases but most people do not realize that the increase will be significant. Apart from expenses on diapers, food, and medicines, regular visits to the pediatrician, expenses pile up quickly which we never realize and it takes a lot. It is very important to take a second look at your budget.

Creating a secure financial future for our newborn is one of the most important things young parents do, but often many of them do not know what to do and where to begin from.  My husband and I also were very much confused about how we are going to manage things in the future and how we are going to save or invest for our baby girl.

Managing risk is the key to financial planning. There are some investment schemes that carry a high-risk reward ratio, but remember that no investment guarantees you any returns, at least when it comes to Mutual Funds.

It is important to develop a plan to meet the educational needs of children, not to make temporary investments. The cost of education in India is growing rapidly. From elementary school to high school, and on to higher education, it is becoming increasingly difficult for parents to meet the growing structure of tuition and other education-related expenses. From here (https://online.ltfs.com/lntmf/investor-education/child-education-calculator/childCalculator.html ), you can estimate how much one needs to invest each month to prepare for their children’s education.

You can also check or use the power of compounding to plan your future goals. Simple interest means you earn interest on your principal saving amount. But with compound interest, you can earn interest on the principal amount as well as the accumulated interest amount over successive periods. Over time, this interest snowballs into a substantial amount that will help you in the future.

Mutual Fund for child needs

Stick with diversified equity Mutual fund schemes. Start SIP in 2-4 equity-oriented Mutual fund schemes with a mix of large-cap and mid-cap Fund too. Save additional Fund received by children on their birthdays or gifts from grandparents to the same Mutual fund folio.

There are so many investment options you should consider for your child

  • Equity Fund.
  • Fixed Deposit.
  • Mutual Fund.
  • Real Estate.
  • Gold Investment.
  • SIP.

Investing in Mutual Funds in a systematic way through SIP can be a great option and also helps to reach your short-term goals. You might not believe me so you can check the benefits of investing in SIP and you can easily calculate the monthly SIP amount that you need to invest in order to achieve a particular goal in a particular time period.

Disclaimer: This information is for general information only and does not have regard to the particular needs of any specific person who may receive this information. L&T Investment Management Limited, the asset management company of L&T Mutual Fund or any of its associates; does not guarantee/indicate any returns/and shall not be held liable for any loss, expenses, charges incurred by the recipient. The recipient should consult their legal, tax, and financial advisors before investing. The recipient of this information should understand that statements made herein regarding future prospects may not be realized or achieved.

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.

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