Is your money growing fast enough for your child's education?

OLife · Post time 4-2-2016 10:11 AM

Edited by OLife at 4-2-2016 10:26 AM

Education is the greatest gift parents could give their children. With proper education, our children will learn important knowledge and life skills, securing a brighter future in the process. As economists like to put it, there is no such thing as a free lunch; proper education comes with high costs, and unfortunately these costs are rising every year.

The graph above depicts the minimum cost of studying in a Malaysian university, including tuition fees, living expenses and transport, after some calculations with the data taken from Business Insider Malaysia. According to the website, the costs of studying in Malaysia is expected to rise by 5% annually, based on past historical data. This is especially troubling because while studying in Malaysian universities costs RM138,020 in 2015, the cost increases to RM332,164 in 2033! Notice how the cost more than doubled in just 18 years!

It is not surprising that many parents are concerned about the ability to pay for their children’s education, with most saving up their hard-earned money in savings accounts. Ignoring the fact that depositing money in savings accounts are a bad idea, can you save enough to meet the cost of education? The better question is—

Can your money grow fast enough to meet rising education costs?

We know that Traded Endowment Policies (TEPs) are stable, long-term investments with exponential returns, and we will see how we can save up for education fees using TEPs with a simple example.

Catherine & Madam Wong are good friends and they both became mothers of a newborn recently, so they decided to start saving up for their children’s education. Catherine planned to set aside RM 700 every month for the next 18 years, for a total of RM 151,200. But to her horror, Catherine realizes she could not afford to send her child to any local university due to rising education costs and inflation. RM 151,200 is a far cry from the RM 332,164 she requires in time to come.

On the other hand, Madam Wong decided to invest in TEPs from Optimise Life. By purchasing a TEP now for RM25,000 and pay monthly premiums of RM700 for 15 years, Madam Wong will receive RM398,000 18 years from now. Both Catherine & Madam Wong invested the same amount of money, but only Madam Wong could pay for her child’s university fees!

When you purchase a TEP, you take over the savings plan of the previous investor, thereby you gain the savings of the previous investor. You’ll also receive your maturity payment earlier as the previous investor started saving in the plan previously. This way, you save both time and money. Now Madam Wong is enjoying the benefits of saving in TEP!

As parents, we are always on the lookout for ways to build a better life for the young ones. One thing is for sure, education is always the priority no matter where we come from. Plan a bright future for your child today!

For more details,please visit our website www.optimiselife.com or our Facebook: Optimise Life Sdn Bhd facebook or call us 03-27259225.