Case Study: Funding an IIT Dream
Funding a premier education at an institution like IIT is a dream for many Indian families. I want to share the story of how, with the right strategy and guidance from a child education financial advisor, this dream became a stress-free reality for one of my clients.
The Goal: An Ambitious Dream
Fifteen years ago, Mr. and Mrs. Kulkarni, a young couple from right here in Nagpur, approached me. Their goal was clear and ambitious: they wanted to ensure their 3-year-old son could pursue an engineering degree from a top institution like IIT without the crushing burden of an education loan. At the time, they had a modest monthly surplus and no prior investment experience.
Our Strategy: Discipline and the Magic of "Step-Up"
We designed a simple yet powerful strategy for them:
- Goal Calculation: First, we projected the future cost of an IIT degree, accounting for a realistic 8% education inflation rate. This gave us a clear target to aim for.
- Starting Small: They started a Systematic Investment Plan (SIP) of just ₹5,000 per month in a diversified equity mutual fund.
- The Step-Up SIP: This was the secret ingredient. We agreed they would increase their monthly SIP amount by 10% every year, in line with their salary hikes. This small annual increase had a massive impact on the final corpus.
- Annual Review: Every year, we would sit down, review the portfolio's performance, and ensure the plan was on track. This kept them motivated and disciplined.
The Result: A Dream Realized, Loan-Free
Last month, their son secured admission into an IIT. Thanks to their 15 years of disciplined investing, the Kulkarnis had built a corpus that comfortably covered all four years of tuition, accommodation, and other expenses. They achieved their dream without taking a single rupee of loan, giving their son a debt-free start to his career.
This success story is a testament to the power of starting early and having a professional plan. Your child's dream is achievable, too.