Question: I am really panicking because I have not invested in an educational policy for my daughter, who is 14. She keeps on asking me if I saved enough money for her to go to university. I used to have a policy but it lapsed after I lost my job. What is the quickest way I can get sufficient funds for her tertiary education? I am so afraid of disappointing her.
Answer: Putting a child through university is an expensive and stressful job! As your child still has four to five years left before university, it would be advisable to invest in equities or an equity fund as it has proven to be the best growth investment over time. However, it should be clear that when one invests in equities, the name of the game is patience. Making monthly payments into such an equity or equity fund is also a good idea, as phasing in any investment cancels out the short-term ups and downs of the market.
In addition, don’t despair if you don’t have enough savings for your child’s university fees. The majority of students finance their studies via student loans, which are provided by banks at a lower interest rate. These loans normally only need monthly interest payments during the study years, and must be repaid only after the studies are completed.