Radhika Gupta, the Chief Executive Officer (CEO) and Managing Director of Edelweiss Mutual Fund, offered insightful advice for parents initiating their children’s investment journey. Emphasizing the importance of early financial planning for youngsters, Ms Gupta advocates for parents to commence investing for their children as soon as possible.
In a recent post on X, shared “on popular request” on March 29, she outlined swift strategies for parents to initiate early-stage investments for their children, ensuring a secure financial future. Gupta recommended parents to organize their child’s documents, establish clear investment goals, commit to 2-3 SIPs monthly, and consistently monitor and adapt these goals over time.
On popular request, some quick thoughts on investing for a child:
1. Get the docs done – birth certificate, Aadhar, PAN and then bank account. Actually very easy to do for a minor.
2. Try to find a goal – higher education is one – to save for. Break it down into the number…
— Radhika Gupta (@iRadhikaGupta) March 29, 2024
Here’s what she wrote:
1. Get the docs done – birth certificate, Aadhar, PAN and then bank account. Actually very easy to do for a minor.
2. Try to find a goal – higher education is one – to save for. Break it down into the number of years you have to figure out an investment amount.
3. Do monthly SIPs. 2-3 funds work. Can use a large / mid index fund for broad market exposure, mid and small cap funds to add risk, and an international fund if you are thinking study abroad to manage currency. ,94 those who asked you can do all this without a children’s specific fund like gift etc.
4. Review this periodically as goals change, make it more conservative as you get closer to the goal. Involve the child in the process as they are old enough to understand.
5. This isn’t a perfect process and you can easily create your own. But it’s enough to start. Finally encourage those who gift to gift units or SIPs to kids. I know the pain of having three ball pools and four strollers as gifts and storing them in a Mumbai home. Financial gifts are productive and take less space 🙂
SIP (Systematic Investment Plan) stands out as a prominent tool for saving and accumulating wealth in the investment landscape. With SIP, investors commit to investing a fixed amount at regular intervals. This amount can be as minimal as ₹500, and investors have the flexibility to choose intervals that suit their preferences, whether weekly, monthly, quarterly, half-yearly, or annually.
Holding SIPs for 15-20 years can yield substantial returns in the future. The sooner you start investing, the greater the potential benefits. SIPs excel in the long term due to the compounding growth of investments, which helps offset any periodic losses through averaging out.