It is good to see your kid sitting in the shade of the tree, you planted years ago. Investment is just like that. What you invest directly affects your kids’ future. Hence, it is essential that you think densely about their fiscal needs. Here are some dos and don’ts to help you select better options when investing for kids:
Plan for the long term
Saving for kids is a long-term objective. You have no idea what the future holds for you.
Do: You should plan well. Seek help of a professional to draft your kids financial future. Investment requires good planning and thought. Understand the funding your child will need and the factors which will make your goals better.
Don’t: Wing it. If you don’t have the right knowledge of investment market and fiscal products and the risks involved then you may wing it in the wrong manner. You will get severe losses and not get any fiscal security for your kid.
When should you commence investing?
Time is very important. It is important to commence as soon as possible so that you get good return on your investment.
Do: Start as early as you can, preferably as soon as your kid is born. It will give more number of years for your funds to compound and multiply. Long investment tenure will help you in getting better rewards.
Don’t: Do not commence late. The later you begin, the more you are left behind in saving for your kid.
Know the needs of your child
How will you know how much is sufficient? Every parent wants to provide their kids with the best resources and options.
Do: Look out for the education inflation rate and calculate the cost of higher education of your child. If you are looking for foreign or private education, then calculate accordingly.
Don’t: Do not make flying calculations. Make sure you calculation is based on actual research. Discuss it with a fiscal advisor and then plan accordingly about the money you will need.
Where should you invest?
Different factors add up to a perfect investment: time period, investment products, rate of return, risks involved, tax redemption and liquidity.
Do: Diversify your investment as much as possible so that you have a range of options. Your portfolio should bend towards your achievement of goals.
Don’t: Do not put all the eggs in one basket, especially when you are getting low return on your investment. Don’t lock all your investment in one product.
Loved is an app which offers you the custodial investment opportunities for your kids. Sign up in just a few seconds and invest for your kid till they reach the age of 18. Look out for different companies like Amazon and Berkshire Hathaway for your investment that offer long- term high return profits and also educate your kids about it. Diversify your investment portfolio and invest for your kids as much as you want. It is the best way to take care of all the future needs of your child.