This mutual fund trick can make your child Boss of Wealth! Check step by step guide

Mutual Fund Investments: Raising a child in today’s times, requires large amounts of money and thus, financial planning for securing his or her future is one of the most important decisions parents or would-be parents need to think about. From inflation to volatility in the markets, there are various factors, which need to be assessed while making an investment decision for a better future for the child. Take a look here at some of the factors that need to be kept in mind, the ways in which you can invest your money better and more. 

Systematic Investment Plans or SIPs have made investing easier from the early phase of everyone's career but all investments can't be for long-term. There should be some relaxation when it comes to a partial withdrawal of your funds and there comes the role of Systematic Withdrawal Plans.

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Speaking on the importance of Systematic Withdrawal Plans in one's portfolio, Sousthav Chakrabarty, Co-founder & CEO, Capital Quotient said, "Whether, it is planning for your child’s marriage or education, there is no denying the fact that the expense is huge, which necessitates, investing early with correct financial planning. Not just his or her higher education or marriage, every stage of raising a child comes with a barrage of expenses for which a sufficient corpus is required. Systematic Withdrawal Plan (SWP) becomes pretty useful for managing several associated expenses whenever they crop up."

Asked about the steps that can be followed by the parent to execute the above, Sousthav listed out the following steps:

Step 1] Start a Systematic Investment Plan (SIP) of Rs 5,000 in a balanced mutual fund as soon as possible, generally before 2-3 years of planning for a child;

Step 2] Have a pre-birth corpus accumulation of around Rs 2,25,000;

Step 3] Convert entire corpus into liquid mutual fund; and

Step 4] Give SWP of Rs 5,000 or Rs 10,000 from Liquid Mutual Fund.

Hence, all would-be parents are required to follow the above-mentioned steps that would ensure their child a Boss of Wealth.