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Saving for your child’s education should be no more complicated than any other savings goal. Many of the current crop of education savings products fail in this respect. At FPM, we advise all our clients to use a unit trust account and be disciplined with the required contributions.

Unit trusts offer a simple, cost-effective way of saving money within a personalized investment portfolio with exposure to numerous asset classes and market sectors, both locally and internationally, managed by professional asset managers.

When setting up such an account for one of our clients for education purposes FPM will ask for details of the amount needed to pay for the child’s education with the timing of the payment therefore being of significant importance.

Additional factors to consider would be the advantage gained by early payment discounts and any extra amounts needed for any extra-mural activities. All of this information will then determine the regular contributions required by you over the investment time horizon. The affordability of the calculated contribution is then determined as against your overall budget.

The table below illustrates the information required for each child in order to produce a detailed plan.


Once the analysis is complete the following output is provided with various contribution options being highlighted as follows:

Should you wish to have a custom plan made for your family please do not hesitate to contact one of our Investment Advisors at FPM.

This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted. (E&OE)

Sean Fahy
Senior Investment Advisor
FPM Risk & Wealth Management
sean@fpm.co.za
0117789300

 

 

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