Father's Day 2024: Becoming a father is one of life's most rewarding experiences, bringing immense joy and responsibility. As one embarks on this journey, securing their child's future becomes a top priority. This article focuses on empowering new fathers with essential financial investment tips to help ensure a stable and prosperous future for their children. From understanding the basics of savings plans to exploring long-term investment strategies, these insights will guide dads in making informed decisions that will benefit their families for years to come.

How can new fathers begin investing for their kid's future financial security?

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As per Manikandan S, Tax Expert, Cleartax, new dads should get familiar with basic financial concepts like compounding, inflation, and risk. 

Further, they should make informed decisions and identify what they are saving for, it could be their child's education, marriage, or even a fund for their entrepreneurial dreams.

Bhuvan Rustagi, Co-founder and COO, Per Annum, believes new fathers should consider the following while starting an investment for children:

>> Setting their goal, whether for their education, house-related or general security 

>> Understanding market and risk patterns 

>> Diversifying their portfolio to different asset classes 

>> Contribute regularly- starting early can be beneficial as you will have a great investment till your child grows.

The next step is to segregate the goals into categories from short to long-term. 

As per ClearTax's Manikandan S, list your financial goals as short-term (within 1-3 years), medium-term (3-5 years), and long-term (beyond 5 years) and allocate funds accordingly. 

Additionally, diversifying the investment will be another important aspect of building an investment portfolio for children.

Per Annum's Rustangi peer-to-peer lending, stocks, mutual funds,  non-convertible debentures (NCDs), government banking schemes, and Real Estate Investment Trusts (REITs) can help in diversifying the portfolio. 

Rustangi added conservative investment approach is best for short and medium-term goals.

As per him, for small to medium-term goals new fathers should go for debt fund investment and fixed deposits (FD) in small savings banks, while for long-term Sukanya Samriddhi Yojana (SSY), Equity Mutual Funds, Unit Linked Insurance Plans (ULIP), Public provident Fund could be the best options. Child Unit Linked Insurance Plans (ULIPs) combine insurance and investment for children can also be one option.

Now, create an emergency fund before investing. This fund should cover at least 6-12 months of one's household expenses, EMIs, child Fees, and monthly contributions for inevitable financial goals. 

Experts suggest that while investment is necessary, it is also crucial to buy insurance for a safe future.

Lastly, automate and review investments made.

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