On February 3 last, I was in Semarang to fulfill the invitation of NOVA provide seminars on how to design children's education budget. Although this topic I've written before in NOVA No. 642 and 643, whenever I feel up to this topic will still be interesting if the discussion.
The seminar consisted of two sessions. The first session discusses the importance of preparing children's education funds and how to calculate its budget. While the second is a special session to train the participants how they can calculate your own budget for education for their children.
Before the first session ended, I get many questions about investment products what is "appropriate" in preparing for children's education fund. Even when the rest seminar (coffee break), there are still students who approached me and asked whether investment in this product and it was profitable or not.
Therefore, it occurred to me to discuss the preparation of the child's education fund, but in terms of investment products. This means that investment products are available for the preparation of the child's education fund, and what the pros and cons of each.
Let's go over a little earlier. In preparing the child's education fund, actually not only need to know about how to calculate the budget for the preparation of funding their education, but also what is the best investment products selected. For example, you've done the calculations and find that you need to save money amounting to Rp 100 thousand per month to prepare for your child's education fund. Now the question is, where the money USD 100 thousand, it should be well saved? Into a savings account at the Bank, buy gold, buy mutual funds, insurance open education, or where else?
In previous NOVA when writing about how to prepare the child's education fund, I was more focused on how to calculate its budget. Not where the money should be invested. Let's discuss what investment alternatives that can be selected parents in preparing their children's education fund and what the pros and cons of each.
Savings in Bank
This product is a product of the most frequently selected parents in preparing their children's education fund. The process is easy: you live to the bank, open a savings account, and put your money into it. At present, interest rates hover around 8 Â 9 percent per year. Such interest shall be cut back to taxes. If your balance is USD 7.5 million down, then you have to pay tax is 15 percent of the flowers. But if the balance of your savings over USD 7.5 million, the tax you pay is 20 percent of the flowers.
What advantages if you use this product as an investment tool for the preparation of your child's education fund? Obviously the money that you enter will not be reduced. This is because the investment returns you earn on savings is uncertain, which is around 8-9 percent per year before taxes. Well, that's me know so maybe you thought. But that's all really just excess. There are no other advantages.
The downside? If you're saving money regularly every month, then when you die, regular savings deposits you normally do threatened to stop. For example, you save money amounting to Rp 100 thousand per month into savings. Currency USD 100 thousand, it comes from your income every month. Well, when you die, then your income will stop. If your income stops, stop also the deposit of USD 100 thousand was. Right? If you stop payment, then you prepare for education funds can not be fulfilled later threatened.
That's why his name pops Education Savings products. This product is actually just the same as regular savings products, it's just that these savings are covered by life insurance. How does it work? Simple: You deposit a certain amount of money each month. When you die, then the regular savings deposit you normally do will be replaced by a third party (in this case the insurance company), so that education funding will still be available later. It's just note that these products generally offer lower interest rates than the interest rates on ordinary savings. Perhaps because this product is also protected by life insurance.
Deposit
If you want to save for your child at once (lump sum), then the deposit you can make your alternative investment products. But if you want to save money on a monthly basis to say   USD 100 thousand per month, it will be difficult to open a deposit. The reason, most banks require a minimum amount of USD 1 million to be able to open a deposit.
What are the benefits when opening deposit? This product is similar to the savings, only the interest rate you get bigger. At this time, the deposit rate is around 11-12 percent per year. Only yes it was, most banks require a minimum amount of USD 1 million to be able to open a deposit. So if your savings balance has reached around Rp 1 million, it never hurts you enter into the deposit to obtain a greater interest than the interest savings.
Only, unlike the savings deposits which can be taken at any time. At the time, your money will be locked for a certain period. But if you're saving for children's education fund preparation, of course this is not a problem. After all the new money will you take when your child will attend school. So my advice, if the balance in your savings account has reached the amount of USD 1 million or more, should move into the deposit to obtain higher yields than savings.
Soil
If you have a large enough amount of money, you could invest in preparation for your child's education by buying a parcel of land.
What's the advantage when you buy land in preparation for the child's education? In the long term, investment results that generally you can get on the ground can be quite large. The numbers vary. But in the long run could be about 30 percent a year. The reason is because the population continues to grow, while not increasing the amount of land.
But keep in mind that the land is not always easy to resell. Therefore, do not buy the land if it's your preparation time distance is still below 10 years. For example, if indeed you want to set up college funds for your child is still 7 years away, it would be very unwise if you make an investment through the soil. Thus, the results on the ground can indeed great, but the results were generally only be obtained in the long term, not short term. Of course, these long-term assumptions can be different between me and you. But according to me, numbers above 10 years already safe enough to be called the long term.
Gold
You can also choose to invest for children's education by buying gold. At this time, the price of one gram of gold varies. If you want to save money for say   USD 300 thousand per month, and the price of one gram of gold is USD 60 thousand per gram, then you can buy 5 grams of gold every month.
However, when observed, generally gold will only increase if there is some specific conditions. There are three conditions that could make the gold price rises: (1) dollar price increases, (2) rising prices of goods and services in general or inflation, and (3) social unrest.
If the three conditions above are not happening, in the sense of normal circumstances, it generally increases the price of gold will be mediocre. In fact, the price will drop. Well, not feeling too huh? But yeah that's why I suggested that the gold be the last option only if you want to do preparatory fund your children's education by buying gold. Wong normal state if the gold price will rise only slightly kok. The magnitude, yes, at most only 5 per cent a year.
Insurance Education
How it works is like this education insurance: You pay premiums to a certain amount (can be every month, three months, six or 12 months), and when your child entered the stage-specific levels of education (usually starting from elementary school and junior high, high school and Higher Education), you will get a large amount of educational funds varies.
Education insurance excess, when you die, then the amount of educational funds promised by the insurance company will still be given, even if you no longer pay the premiums.
How did it go? If the count is calculated, the investment return you get on the education of insurance may be smaller (in some insurance companies may be the same) compared to savings in the bank. Only, the compensation is that you (as parents) will get the protection of life insurance where this is necessary for preparing your children's education funds, life insurance, because the role here is to protect the risk of death on you.
Mutual Funds
You can also save themselves by opening a mutual fund account. Mutual fund is a form of investment where your money will be managed by an investment management firm, and you will get progress reports every year or every few months. A description of the mutual funds you can read in the NOVA no. 666 and 667.
Excess of the Fund is that generally you can get the results could be better than the bank product. This is because your investment is managed by an investment management team and your money will be invested not only in bank products (such as savings and deposits), but also on other financial products that can offer greater profit potential, such as SBI, bonds or shares .
What drawbacks when used for investing the Fund your children's education? Well, if you die, you enter a regular deposit into mutual funds threatened to stop, so that your child's educational funds at risk will not be available at the time later. Therefore, it can be anticipated by way of taking life insurance companies. So, besides saving money into mutual funds, you also have life insurance.
Hopefully, after learning the ins and outs of a glimpse of the investment products and the advantages and disadvantages, you can decide for themselves which products should you use to prepare your child's education fund. While on the seminar in Semarang, I hope someday to return again to share another topic that is not less interesting.
Quoted from Tabloid NOVA No. 678/XIII. Written by Safir Senduk.
