Market Magic

Project Child: Make it a successful business venture

BARUN JHA
A brand new year is here and it’s time for parties and celebrations. This is also the time for making new resolutions and plans to ensure a successful year ahead, both in personal life and on the financial front.

The same holds true when a child is born. It’s also the time for celebrations and new resolutions and planning to ensure a comfortable and happy life ahead for the newborn. And again the financial matters hog the limelight in the overall planning for the life ahead of the newly born human being.

Most of us are well aware of the large expenses to be incurred in future on education and marriage-like events for a child. While making provisions for these future expenses, we buy some insurance policies, make some fixed deposits (FDs) or invest in similar instruments, which could be encashed when the time arrives for big-ticket expenses like college education and marriages.

However, the financial planning for a child does not merely mean making provisions for education (engineering/medical/MBA or other professional courses) and marriages etc. We tend to forget that there is a continuous cash outflow both before and after these big events.

We often forget to make advance provisions for that daily pocket money, that first bike for the son, the expensive Barbie doll-like dress for the daughter, those picnics and holiday school trips to hill stations among numerous small but pocket-pinching events.

We all have a big picture in mind, but we tend to miss out on the overall picture, when it comes to planning for a financially secure life for our lived one. Even when saving for marriages and college fees, we tend to consider the costs in today’s term and forget to account for the inflationary effect, which is bound to make it many times costlier when the actual time arrives about 15 or 20 years later.

The best idea would be to consider the whole exercise as a pure business venture, while accounting for everything on a balance sheet entailing all the details ranging from the cash inflow, initial costs, running or day-to-day expenses and investments required to the final returns, which would include an everlasting smile on the face of the child and happiness for the whole family.

Here we will try to understand the whole picture of the expenses to be incurred and a proper mechanism or planning and investments required to meet the goal of making the Project Child a successful venture.

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Project Child

posted by Arhaan @ 9:05 PM