I have started my career with a start-up and earn Rs 60,000 a month. I am looking to use this stint to fund my higher education three years later. How can I save and invest to have Rs 20 lakh three years from now?
Gaurav Chadha
Your maturity to consider saving and investing to fund your higher education will do you a world of good. At the same time, just by investing you will not be able to reach the target that you have in mind. So, you should consider funding your higher studies with a combination of education loan and your savings and investments. Start an SIP in a balanced fund from the OLM Elite such as ICICI Pru Balanced or SBI Magnum Balanced for a start. These funds are not without risks; however, for the time period you have in mind, these would work well because of their inherent asset allocation and rebalancing mechanism.
Your prime concern at the moment should be to focus on your job and study for entrance examination for higher studies. Likewise, with your investments you should consider safety, liquidity and returns (SLR). Safety of corpus, ease of exiting it and the growth potential it has. As you also fall under the tax bracket, given your income level—you should definitely make use of the tax savings potential of equity linked savings schemes (ELSS). These are mutual funds in which investments up to Rs 1.5 lakh in a financial year qualify for tax deduction under Section 80C of the Income Tax Act. Put your money in funds like Franklin India Taxshield, which is an ELSS. Investments in this fund have a three year lock-in, so definitely max your investments in this fund for this year, so that you can redeem the entire sum when you actually need it. More importantly, if you still need money—borrow it from relatives and friends to fund your education.
