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The future of our children

The future of our children is probably the biggest concern for most parents. Many parents start saving for their children’s education and marriage, soon after the child is born. This is, of course, the right thing to do, because the parents can benefit from power of compounding while the child is growing up. As far as investment choices for their children are concerned Indian parents are mostly conservative. Public Provident Fund, National Savings Certificate and life insurance endowment plans have traditionally been the preferred investment options for the children’s education and marriage. These investment options continue to be preferred choice of a majority of parents today. While these investment choices offer safety of capital, on the flip side the yield of these investments is quite limited. Cost of living in general and cost of education in particular has been increasing at such a pace in India, that relying on low yield investments may leave parents short of the goals they have set for their children or force them to compromise on other important goals like retirement planning. In this two part series, we will discuss investment choices that will help parents meet the financial goals for their children’s future.

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