I have a 6 yr old girl child. Want to have a corpus of 1Cr once she is 18 yrs to support her education needs. Please suggest how to approach this goal?

Ans: Planning for your child's education is a thoughtful and long-term financial goal. Here's a step-by-step approach to help you achieve a corpus of 1 Cr for your 6-year-old daughter's education by the time she turns 18:

Determine the Current Cost of Education:

Research and estimate the current cost of the education you envision for your daughter. Consider tuition fees, living expenses, and any other potential costs like books, equipment, and extracurricular activities.
Assume an average annual inflation rate for education costs. Typically, education inflation is higher than general inflation.
Choose the Right Investment Vehicle:

Equity Mutual Funds: Given your long investment horizon (12 years), equity mutual funds can be a good choice. They offer the potential for higher returns compared to debt funds or fixed deposits.
SIPs (Systematic Investment Plans): Start a monthly SIP in diversified equity mutual funds. This approach allows for rupee-cost averaging and reduces the impact of market volatility.
Calculate Monthly Investment Required:

Using a financial calculator or online SIP calculator, determine the monthly SIP amount required to reach 1 Cr in 12 years, assuming an expected rate of return. The rate of return can vary, but a conservative estimate could be around 10-12% per annum for equity mutual funds.
Stay Consistent and Review Periodically:

Consistency is key. Make sure to invest the calculated SIP amount without fail each month.
Review your investment portfolio annually to ensure it's aligned with your financial goals and adjust if necessary.
Consider Additional Savings and Investments:

Apart from SIPs, look for additional avenues to save and invest. Consider recurring deposits, PPF (Public Provident Fund), or even direct equity investments if you have the expertise.
Encourage relatives to gift investments or contributions towards your daughter's education fund on special occasions.
Keep Emergency Funds Separate:

Always maintain a separate emergency fund to cover unexpected expenses. This ensures that you don't dip into your daughter's education fund in case of emergencies.
Tax Planning:

Opt for tax-efficient investments like ELSS (Equity Linked Savings Schemes) under Section 80C of the Income Tax Act. This will help in saving tax while building your daughter's education fund.
Remember, the key to achieving your goal is discipline, consistency, and staying invested for the long term. Periodically review and adjust your investment strategy as needed, considering changes in market conditions, your daughter's education costs, and your financial situation. It's also a good idea to consult with a financial advisor to tailor a plan that suits your specific needs and risk tolerance.