When we speak to clients that started with a family of their own, their primary concern is: How am I going to pay for my child’s university fees?
And with good reason. Not only is an education the best gift you can give to your children it is also very expensive.
If you add all the fees together for tuition fees, handbooks, living expenses (especially if they do not study out of the home) the amount can easily be calculated to R 100 000 per year. That is R 400 000 for an honours degree!
How do you eat an elephant? One bite at a time. So lets break the R 400 000 down into monthly contributions.
So if you start saving for a newborn child and you assume education inflation is 8% per year , R 400 000 university fees of today, will then equal to R 1.6 million when the child turns 18.
If you assume you get a growth of 10% on your investments after fees and you increase your monthly contributions with 10% annually, you will need to start with R 1 400 per month’s contribution.
The best investment vehicle to use is a Tax free savings account.
There is no taxes on your growth of the investment and you have access to the investment at any time.
So if your child gets a scholarship and you don’t need the “education fund”, you can buy the motorcycle you always wanted.
So start saving for your child’s education today – ONE BITE AT A TIME