Investing in Equity Mutual Funds to prepare for children's education costs is a way to reach a brighter future for the children. Parents surely want the best education for their children to gain knowledge and become a great member of the society.
Preparing education funds from an early age is very important for parents to stay financially stable and not sacrifice the other needs of the child. Investing in Equity Mutual Funds is a great way for parents to easily save long term. Why is that?
What is Equity Mutual Fund?
Many parents may not understand what Equity Mutual Funds are and how they can benefit their children's education costs in the future. Mutual Funds are investment made by several investors in a selected product from various types of available investments. Later, the funds deposited by investors will be managed by an Investment Manager who will work to optimise your funds.
Meanwhile, Equity Mutual Funds are types of Mutual Funds in which most of their portfolios or funds are invested in the shares of companies listed on the stock exchange.
The better the education of the child, the higher the amount of funds that must be prepared by parents. This can be anticipated by investing in Equity Mutual Funds. Before that, as a parent, make sure you know the right way to invest in Equity Mutual Funds, so your investments can grow and your child's future journey to gain knowledge will be better thanks to the right preparation.
Tips for Setting Up Children's Education Fund with Equity Mutual Funds
Equity Mutual Funds are a great way to invest in today's wealth management strategy. If the income is not controlled and allocated to the right posts, it can hinder wealth management and put a stop to financial goals in the future.
After knowing what Equity Mutual Funds are, now you need to know the right way to prepare education funds for children in the future. So that the funds are better prepared for every expenditure in the best education for children.
-
Have a dedicated budget plan for education
All parents want the best education for their children. The planning needs to be thorough and suitable for the parents’ capabilities. Make sure to do the best possible financial planning to provide the best education for your child. One of them is by having a dedicated education budget.
Every family's budget is different. The more family members, the more expenses that must be made. This can be a barrier in providing the best education for children's future.
Education budget must be separated from other costs so that they are not mixed up with daily expenses. Be sure to find out which school you want and how much it costs. So that you can estimate how much budget should be prepared for your children's future education.
-
Calculating the education costs
In preparing a child's education budget, it is necessary to know the detailed costs in each semester so that children can focus on gaining knowledge. The detailed cost for each child’s education can differ, depending on the facilities, advantages, curriculum, and teaching staff of the school.
The better the school has to offer, the more it costs to match its excellence. Make sure to know your child's initial school fees well so that you can make an estimate in the calculation. This is because every time the school year changes, schools can also increase their payment.
Details of the range of educational costs for children include tuition fees, monthly tuition fees, desired extracurriculars, book fees, farewell fees, and shuttle fees. The more children's activities, the higher the cost required for parents to prepare.
One way to save finances so that children's education is more secure can be with Equity Mutual Funds with long-term benefits. Its nature, which is easy to sell or buy, makes Mutual Funds suitable for preparing children's education safely and securely.
-
Calculate the range of costs required during enrolment (consider inflation)
The budget to cover your children's needs must be prepared as well as possible in order to get the best. One of them is education for the children, and parents have to prepare it carefully. The goal is to keep your finances secure and stable.
Every child has different school needs and parents provide the best they can. Unfortunately, the cost of education prepared by parents must also consider inflation.
The inflation rate in the education sector according to the Central Statistics Agency (BPS) reaches 3.81%. Meanwhile, the increase in the average tuition fee for education in Indonesia can reach 10 to 15% per year. The increase in education cost inflation could even be higher than inflation in Indonesia for 5 years from 2017 - 2021 with an average of 2.62% (source: www.bi.go.id).In addition, there are many things that cause the cost of education in Indonesia to increase every year, starting from the lack of subsidies, the commercialisation of education and also increasing teacher welfare.
Investing in Equity Mutual Fund instruments to prepare children's education funds can be the right choice because the funds prepared for the next 5 or even 10 years can continue to grow and the percentage increase can exceed the increase in inflation itself.
- Simulate the range that must be invested in Equity Mutual Funds every month
The cost of education, which may rise in the future due to inflation and other factors, can be scary for parents. However, the more well-planned the preparation of children's education funds since early on, can ease your future needs when your child enters higher school.
After knowing what the costs will be in the children's education budget later and considering the inflation factor, parents must then determine the amount of funds that must be invested in the Stock Mutual Fund every month so that the amount of funds you want can be achieved in your targeted period.
-
Ready to commit in the long term to Equity Mutual Funds
If parents already know the intended school for their child with the required cost range, now is the time to solidify their intentions and make it happen.To get optimal and intended profits from Equity Mutual Funds, parents or investors must invest consistently and commit to it. Because Mutual Funds are not savings that provide quick profits, but require time and consistency.
If you consistently set aside a portion of your income in Equity Mutual Funds, it means that the funds you invest will be greater and the profits you can earn also have the potential to increase.
The Advantages of Equity Mutual Funds in Preparing Children's Education
Every investor wants a profit from their investment product, especially if it is intended for children's education. There are several advantages of Equity Mutual Funds that investors can get from their products.
-
Return on investment
In investing in Equity Mutual Funds, investors can get a high investment return potential. This makes the investment attractive, especially for those that can be consistent for a long term. So that the profits obtained can be even greater and can be used for children's education costs.
But keep in mind that every investment will have risks. So, investors must be selective in choosing Mutual Fund products and try to minimise risk by analysing before buying.
-
Flexibility in making transactions
In Mutual Funds, investors gain advantage of flexible or easy redemption. Because Mutual Funds can be bought or sold anytime quickly and can even be done online.
The convenience obtained from Mutual Fund transactions will be secure and comfortable. This is because the Investment Managers of Mutual Funds are supervised by the Financial Services Authority (OJK) so that all transactions are monitored.
-
As investment diversification
Every investment has different risks. So, investing in Equity Funds can be used as a way to diversify assets or investments. The goal, of course, is to minimize the risk that will occur in one type of investment product and maintain the portfolio owned by investors.
-
Transparent
Every Equity Mutual Fund transaction and ownership will be managed transparently by the Investment Manager for investors. So that the growth of funds and portfolio reports can be monitored regularly by investors in managing their products.
The benefit of a portfolio that is presented transparently is that investors can see the growth of funds as well as their profits. In addition, you as an investor can also see whether the Mutual Fund product performs in accordance with the desired expectations and is not detrimental.
The Equity Mutual Fund profits that you can potentially gain later can help you in preparing children's education funds.
DBS Treasures for Children's Education Preparation with Equity Mutual Fund
Equity Mutual Funds investment through DBS Treasures priority banking ("DBS Treasures") can be the right way to prepare children's education funds safely and easily through only a single application. The advantages of this investment can be experienced by investors and has the potential to make profits in the desired timeframe.
-
Investment management by professionals
For someone who uses Equity Mutual Funds as a future investment, surely want the management of their funds to be carried out only by professionals. DBS Treasures partners with professional Investment Managers so investors can rest easy choosing from the available products. The performance of the products can be more optimal in providing potential profits.
-
Supported by a team of experts to guide investment
Every market analysis from DBS Treasures is carried out by a team of experienced and proactive financial experts. So that investors can always seize opportunities that match their profiles and preferences, at the right time, to invest in Equity Mutual Funds in the dynamic market.
Through market analysis by the team of experts, they can communicate the right time to invest. So, investors can get profitable opportunities from their investments in the long term.
-
Reducing risk through diversification
Each investment can have different risks. Diversification can help investors in reducing risk because they have a spread of funds in different assets. Thus, diversification can help stabilise a portfolio if one asset declines.
-
Easy Transactions through the digibank by DBS Application
At DBS Treasures, all transaction activities are made easier. You can make sales, purchases and even product switching through digibank by DBS Application. This includes analysing Mutual Fund products using data from Infovesta.
If you have just registered as an investor, you can easily make Single Investor Identification or SID from the Indonesian Central Securities Depository (KSEI). So you don't have to bother installing other applications anymore.
The requirements are you need to become a Client of DBS Treasures with a minimum deposit of IDR 500 million and have the digibank by DBS Application, e-KTP, and NPWP.
