Originally published at: https://www.mawazna.com/blog/a-guide-to-investing-in-mutual-funds-to-support-child-education/
Every day that goes by, the cost of education in Pakistan seems to be on the rise. Education is vital to the development and the future of your children but sometimes, the cost may seem out of reach for many. With this in mind, it is important that you begin saving as early as possible because it is that crucial, not only to your children but also to you. As a parent, you will naturally put the needs of your children before your own because your priorities change considerably. So, if the education of your children is important to you, you should consider investing in mutual funds because the right financial strategy can really make a difference. The remaining part of of this article illustrates a guide why you should be investing in mutual funds to support your child education.
How can you invest in mutual funds?In Pakistan, investing in mutual funds is easier than many might think. The first place to begin is by opening an account with an Asset Management Company such as Al Meezan Group, Lakson investments, UBL Fund Managers, ABL Asset Management, Habib Asset Management, MCB Arif Habib Savings & Investments and Faysal Asset Management Limited etc. The whole process is handled by them and made a lot easier for you, giving you the incentive to make the right investment for the future of your children.
Selecting an investment planThe plan you select has to be suited to your objective, which is to save for the education of your children. In this instance, you would be looking to invest in a plan over the long-term, a balanced fund is often the best choice when investing in mutual funds to support your children education. This is where the fund is balanced between stocks and other assets. This could be a plan such as the Meezan Balanced Fund or an equity fund such as the Meezan Islamic fund. Both of these would give you exactly what you need from an investment plan that is designed to help you cover the cost of education in future years.
Additional Reading: What You Need to Know about Mutual Funds When Investing in Pakistan?
Understanding investment plansTo make the right decisions, you have to understand that mutual funds are all different. The difference could relate to the instruments that the fund manager has invested in them. This will result in a wide range of returns and risks.
Choosing an investment plan is all about how much of a risk you are willing to take. However, when it comes to funding education, it is a risk that you will have to consider. In some cases, the more you invest, the higher the risk but the returns will then be higher. At this point, you need to determine how much you are willing to risk and how much you can afford when it comes to investing in mutual funds.
Invest early and really benefitThe education of your children might seem like a long way away. While this might be true, the earlier you invest, the less you will need to invest to cover the cost of education when they reach the desired age. Of course, the later you begin investing in mutual funds, the more you have to invest, which might see good returns but it could also push your budget a little. For example in developed countries Government also inspires its citizens to open and maintain a child trust fund that can help child and parents to manage future education related expenses and a child can have a quality life.
Plan accordinglyWhen it comes to investing for the education of your children, you need to have a clear understanding of what is required. It has to be suited to your specific needs and that is why Mawazna.com can help you with the right set of tools and information to make your well informed decisions. At Mawazna.com, it is possible to compare and review investment plans that make investing in mutual funds so much easier. Having the ability to compare and understand what is available will help you to make the right decision based on your circumstances. This gives you control over the decision you make and the plan that you choose, ensuring that you can comfortably afford your child’s education when the time comes.
“Mawazna Karein Apne Liye, Apno key Liye”