Hi all,

I just got a baby last 2 months and we have accumulated some cash that were given to the baby. Unfortunately I'm not too sure what is the best way to maximize the profit for her future (education & etc). Some said I should join unit trust and some even advise me to buy a gold.. but can anyone help me with this? Since there are too many banks around and I'm not really good when it come to financial mgmt.

Assuming this is for his/ her education funds, gold would not be the appropriate vehicle. It is more for preserving value. U want compounding interest or leverage to grow your investment.

Buy an afforatable property - more expensive then UT or education policy but you can get rental income and if the location is correct in 20yr time returns will be much better.

educational assurance???

Thx rakyat,

Basically I just need something to maximize the profit without any attachment to a policy or whatsoever.. Something that can be withdraw anytime for her needs and not necessarily have to wait till she ready to go to the univ (Assuming that she does get accepted in the uni later..b ut that one is diff story)

House or other property is a bit too high for me.. Besides, I'm just planning to add few hundreds on monthly basis into her saving.. or is there any other way around to get a property with this kind of funding?

This post has been edited by awiekupo: Sep 18 2009, 10:16 AM

awiekupo,

1) Money is money. So, why do you separate one savings from another?? It is ALL the same.

2) You have to SURVIVE first before you can THINK giving money to ANYONE. Much less a baby.

Dreamer

if u can afford to add few hundred on daily basis... 1 month how many thousand u have in her account already???... so i think u can afford to buy lots of property for this purpose

Open a SSPN account. Start saving for tertiary education.

http://www.ptptn.gov.my/c/portal/layout?p_l_id=PUB.1.9

opps.. sorry toriton.. typo therere.. duibuqi. duibuqi.. hehehe..

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Added on September 18, 2009, 10:23 am1) cannot lah bro.. that money had been entrusted to baby.. u know.. like yr friend or family gave to the baby.. So cant really touch that one.. have to keep for her.. hehee..

2) at the moment its ok.. i can still survive.. for future dunno yet la..

This post has been edited by awiekupo: Sep 18 2009, 10:26 AM

Property investment is different 'game' with secured saving, like FD or educational insurance.

Property investment is a liability as one took up housing loan to buy the property, unless one is paying in full cash.

There is no guarantee property investment must be making money (net with more than FD rate), nor the property is liquid when you want the cash time.

There is no guarantee one will be getting tenant or good tenants as well.

Don't mean property investment is not good but there are more variable risk involved.
It should be treat as investment as buying house using housing loan actually is a leveraged investment and you are commiting to the monthly payment of the loan which is a liability, not a pure saving.

he he he... anyway... good unit trust agent usually can help u get good returns from your investment. but this depend on the market actually... looking at your situation... u may go for long term investment... so the risk is lower...

coming to the part where u said u need the fund to be accessible anytime for her need... this has some drawback in term of the fund safety unless u are very discipline in taking care of the fund...

by saying "her need"... what do u categorize as her need???...
- primary/ secondary school expenses???
- Buy toys & clothes???
- Hospitalization???

You should ask yourself, can you withstand if the money invested turn out losing one?

If no, UT and gold is not an option.

Save the money in your saving/FD account is sufficient for near term. Your child still a baby, should be looking around what option you have and your financial situation, before commiting to anything.
Do not commit anything before you are unclear of. The first priority is to come out your personal plan aka each month save how much for your child future spending/education fund.
That's my advice.

This post has been edited by cherroy: Sep 18 2009, 10:36 AM

If it is not for education fund only for 'pocket money' with a short term outlook then your best bet would be a combination of FD (liquidity) & UT (mid term growth)

But if its for college fees then u need a little bit more aggresive since a couple hundred per month will not take u far (assuming uni will cost at least RMXXX,XXX)

Being a new parent, I have looked into the options available and education policy seems to be 1 of the least attractive. Of course I also took up a small policy (premium RM3k end up with RM60k) in case any unforseen befall me.

Lets put it into pespective : what can RM100k (RM60k + some bonus) do in 18 yrs time? UTAR/ Multimedia college registration fees + 1 semester fees???

It's great that you are thinking of your child's education early. I would advise NOT to put it in an instrument where you can withdraw anytime because usually when you do this you will tend to withdraw.

When my daughter was born I put in RM2K into Amanah Saham Wawasan for her. I also bought an education plan for her that is investment linked but the money is not invested in aggressive funds but partially with a bond fund with the rest in a balanced fund. The capital is guaranteed.
I have not touched any of her money but have reinvested the returns every year.

As she just turn seven, I intend to purchase a property around RM150K-200K with 30% deposit with a ten year loan and MRTA (this 30% I have been saving since she was born). Hopefully when she is ready for university there will be approximately RM200K-RM300K for her to start off with.

However, I am a great believer in not spoiling my child and have created a trust for this amount. If she refuses to further her education, she will not receive any of the money as the proceeds will go to charity if I am already dead but if I am alive, I am taking the money for a nice long holiday!

aa.. thx for the input guys.. really appreciate it.. now I can see much clear... if got any other ideas/comment/input pls dont hesitate to share..

There is no best method, but a method that you are able to stick through it.

As for me, this is what I have done for my kid:

i) My wife and I both opened a SSPN a/c RM 3Kx2 p.a. mainly for tax benefit. By the time my kid reach IPT level, it should have abt RM 100K, ready cash

ii) Bought a Med Card (very important, you will definitely need it, cost of paying hospital bill is more than annual premium of the card, this I guarantee)

iii) Bought a Investment Link Life Assurance with Critical Illness Rider under my kid's name. I selected aggressive fund to maximize the rtn. Should have abt RM 60K Cash value by the time my kid reach IPT level.

iv) Continue to invest in equities on my own.

v) Withdraw from KWSP a/c 2 if there is any shortfall in the future.

vi) Avoid unnecessary big ticket spending. Bye bye to LV bags, no more Dunhill wallet or Tag Hauer watches or Starbucks... hello kopitiam.

Xuzen

invest is the best way to make more cash.
small amount put in bank u c nothing.
small amount u invest hav chance to become big.

Keep in mind that education cost increases every year, might be higher than inflation.

awiekupo,

Congratulations on your newborn. I believe you have received enough suggestions on the types of investments available for your baby. I am just going to add a few words of advice to help you in making your decision.

There is NO one best way in anything we do, especially when it comes to investment. Some might shine during good times, but to fall hard when bad times hit. We have just gone through a hell of a crisis in the last 2 years and I'm sure you are aware of it. Since it is for your child's education fund, we are looking at a timeframe of about 18 years. For that amount of time, we could see another 2 crises if we're not being careful.

So, what you need is diversification. Invest in a few of the options rather than limiting it because IF a crisis does hit, you would at least have a cushion. In the years to come, we could see another commodity burst or a currency burst, we don't know. So, it is wise for you to diversify across a few instruments.

Good luck.

You have quite a good plan. But (vi) is really not an easy thing to do.
You having this plan all your kids? Or you only have one child currently.

All investments are attached with its own unique risks.
If you are going for educational fund, my suggestion is to go for properties.

If you do it properly you should be paying for the downpayment + some inital charges only, there after the rental shall cover the monthly installments (net positive cashflow). This advantage give you lesser financial burden and some hedge against inflation and mild fluctuation of investment value.

Your major risk is location + tenancy, check out for good location with high tenancy.

Before you could go out and start buying, read some property investment book + ask those sifu sifu for opinion.

You got time do your research now maybe buy one year later. Decide properly as it involve your child future and your long term commitment.

Some said property is not liquid enought, to me is not true..check out the financial instrument available to finance your property, study and compare them properly, you will see that property is liquid.