Wealth Planning & Children Education

Children education planning is an integral part of wealth planning for any family. It basically is asking parents to start a funding program for their children's future tertiery education.

As you may now know, what is the current cost of a good university or college degree. What about a good overseas university or college degree? It could easily triple or quadruple the local cost, that is why it is so crucial to start planning early and funding for your children's education.

Go to wealth experts and ask a wealth query with regards to Children Education funding.

Let us now look at the important aspects of Children Education funding.

Again we look at the 5 Driving Forces                                            to determine our direction.

The 5 driving forces are Wealth Aspirations, Strategic Wealth Analysis, Strategic Wealth Planning, Wealth Action and Wealth Management.

Wealth Aspirations
Everyone must start with an aspiration. So ask yourself this question, "What do you want your child to be in future"? Irregardless of the aspirations, we believe that every parent wants to provide the best for his or her child.

Of course the course of our child's future and destiny is determine by our child and not us, but as young as they are at the moment, we want to influence our child so that they can have a better future, right? So let's start off with just this aspiration.

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Strategic Wealth Analysis
Next step is to start analysing a few things:
1. How much would it cost to go to a local university NOW?

2. How much would it cost to go to a foreign university NOW? Research a few options of the available universities you like in the web to find out their course fees.

3. Determine the inflation component of the education fees. As a general help, inflation on education roughly around 7% to 12% per annum.

4. Now calculate the future value (FV) of the university fees using the current cost over the number of years till your child is to go to university.

5. Your future value (FV) of the education fee is the amount you need to accumulate to achieve the goal you want to fund your children education.

6. Final step here is to analyze what you sort of funds you have available.

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Strategic Wealth Planning
This next step requires you to start the planning process of getting to your objective, which is the future value (FV) you worked out in the previous step.

After that the next few step will be crucial.
1. How much do you have right now, current value (PV)?

2. Use (FV) to minus (PV) you will get the shortfall. This shortfall is what you must accumulate from now till the time your child goes to university. So better start cracking.

3. Your (PV) can also determine how much returns you have to make up to get to your (FV). Which means if you decide that your current value (PV) is all that you have and you only want to use this funds to increase in value over time to fund for your children's education, then your (PV) must be used to determine how much returns you must make in your investment to get to your objective in the future.

Another way to calculate is,
1. To determine how much you need to accumulate regularly, you must include the time factor, which is the number of years to accumulate. From here you can straight away determine the amount you need to save regularly with the desired investment returns over the required time period.

The advantage of doing this method is that you are using the method of dollar-cost-averaging. Which means that market fluctuations and volatility is not of your concern.

Now that your planning is complete you need to do the most important thing in the next phase.

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Wealth Action
This is when the rubber meets the road.

Your desired investment returns would determine the kind of investment vehicle to invest in.

For example if your desired investment return is to get only 5%, you could be looking at investment instruments such as a Bond Fund, an Insurance plan that projects an investment return of 5%.

If your desired investment returns is 15%, then you could be looking at equity funds or investing in equities yourself.

Whatever the objective you have, make sure that Wealth Action must be taken. A good plan would not be of any use when there is no action taken.

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Wealth Management
Once your action is decide upon and taken, you need to constantly monitor your actions. This is where most people fail. Reason is simply, they do not have the time. This is where experts is most useful.

Our advice is, go look for experts to manage your money. But choose wisely.

Want tips to get good advice, go to this link...Seeking Financial Advice

Don't stinge on investing in good advisers. Pay a fee rather than look for advisers on commission base. Fee base advisers are non product bias. We are not suggesting that commission base advisers are bias, but given the human factor of greed, it is better to look for fee-base advisers.

However if you want to do it your own, here are a few tips,
1. Monitor it on a quarterly basis.
2. Keep in touch with world events, especially the finance sector.
3. Be prepared to make wrong decisions and live by it.
4. Go and invest in seminars to improve your knowledge and skills.

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