investment planning for children education-what strategies should
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“Investment Planning for Children Education - What
strategies should we adopt?”
Group Members:Ilham binti Samsuddin @ Yasin G0928688Nurul Jaliah binti Ramino Rashid G0924256Sabiqah binti Harithuddin G0927656Shazmin binti Shamsul Ariffin G0929658
Prepared For: Br. Asrul Dahari
What is the investment planning education for
Children?
Process of designing saving tools which later
provide an amount of money to fund child’s
higher education expenses
Why do we need child education investment
planning?Increase of higher education costs. Assist parents in making systematic financial
planning for their children’s higher education.Solution for financial problems faced by
parents and students, especially those with low incomes.
When the planning should start?
The plan should be started as early as the child is 6 months old
HOW?
5 Steps of Child Education Planning
Setting Target Date
Finding Current Cost of Education
Finding Target Amount
Estimating the returns you can generate
Calculating Monthly Contribution
What are the factors to consider?
Diploma?
Degree?
University?
Study local
or abroad
?
How long?Course
?
How much coverage do
you need?
How much coverage do you need? (cont.)
The following are some of the factors you may need to consider in determining the level of coverage:
Current course fees
Expected living expense
s
Number of years of study
How much
its would
cost you today
FV = PV(1+Inflation)^n
How much coverage do you need? (cont.)
EXPECTED EXPENSES FOR CHILDREN EDUCATION
AGED 5 - 6 Years 7 - 12 Years 13 - 17 Years 18 - 19 Years 20 - 23 YearsMAIN EXPENSES :
TUISYEN FEES RM330.00 X 12 month X 2 years RM7,920.00 nil nil nil nilRM300.00 X 12 month X 1 years Nil RM3,600.00 RM3,600.00 nil nilSCHOOL FEES RM200.00 X 1 years Nil RM200.00 nil nil nilRM300.00 X 5 years Nil nil nil nil nilUNIVERSITY FEES Nil nil nil RM2,000.00 RM12,800.00
OTHER EXPENSES : TRANSPORTATION RM1,320.00 RM8,640.00 RM8,640.00 RM7,200.00 RM14,400.00SUPPLEMENTARY RM174.00 RM9,000.00 RM9,000.00 RM3,600.00 RM7,200.00LIVING EXPENSES RM4,800.00 RM12,000.00 RM12,000.00 RM4,800.00 RM9,600.00ENTERTAINMENT RM6,000.00 RM15,000.00 RM15,000.00 RM6,000.00 RM12,000.00
TOTAL EXPENSES : RM20,214.00 RM48,440.00 RM48,240.00 RM23,600.00 RM56,000.00
TOTAL 18 - 23 YEARS OLD RM79,600.00
COSTS AFTER INFLATION (2.77%) RM137,480.00
Child Education Contribution Calculator
GoalCurrent
YearTarget
YearInflation Expected
Value in Todays Term
FutureValue
Years Left
Return Expected
Per month Investment
Child Education 2006 2026 2.77% 79,600 137480 20 9.00% 204
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Where to Invest?
Investment-link Plan
Unit Trust Trust Account
Saving Account
PRUlink Dana UnggulPRUlink education plan For
Mr Darwish Aiman Bin Adam Sim & Madam Shazmin Binti Shamsul Ariffin
Illustration Of Child's Benefits
Year AgeTotal Premium Paid at the Beginning of the Policy Year (RM)
Total Premium Outlay (RM)
Total Death Benefit (RM) (PEP + PRUlink term)
Total Critical Illness Benefit (RM) (Crisis Shield + Crisis Cover
Benefit)
Total Cash Value (RM)
Projected Investment Return
(9%)
Projected Investment Return
(2%)
Projected Investment Return
(9%)
Projected Investment Return
(2%)
1 2 1,200 1,200 16,213 16,206 8,000 213 206
2 3 1,200 2,400 24,440 24,412 12,000 440 412
3 4 1,200 3,600 32,926 32,854 16,000 926 854
4 5 1,200 4,800 41,443 41,297 20,000 1,443 1,297
5 6 1,200 6,000 42,180 41,919 20,000 2,180 1,919
6 7 1,200 7,200 42,988 42,564 20,000 2,988 2,564
7 8 1,200 8,400 43,929 43,286 20,000 3,929 3,286
8 9 1,200 9,600 44,930 44,007 20,000 4,930 4,007
9 10 1,200 10,800 45,995 44,727 20,000 5,995 4,727
10 11 1,200 12,000 47,128 45,446 20,000 7,128 5,446
11 12 1,200 13,200 48,334 46,163 20,000 8,334 6,163
12 13 1,200 14,400 49,618 46,879 20,000 9,618 6,879
13 14 1,200 15,600 50,968 47,594 20,000 10,968 7,594
14 15 1,200 16,800 52,444 48,309 20,000 12,444 8,309
15 16 1,200 18,000 53,979 49,006 20,000 13,979 9,006
16 17 1,200 19,200 55,590 49,678 20,000 15,590 9,678
17 18 1,200 20,400 57,292 50,333 20,000 17,292 10,333
18 19 1,200 21,600 59,097 50,980 20,000 19,097 10,980
19 20 1,200 22,800 61,024 51,629 20,000 21,024 11,629
20 21 1,200 24,000 63,086 52,284 20,000 23,086 12,284
Year Age
Total Cash Value (RM)
Projected Investment Return (9%)
Projected Investment Return (2%)
18 19 19,097 10,980
19 20 21,024 11,629
20 21 23,086 12,284
Takafulink Cerdik Plan
Monthly contribution amount @ RM100
End of Certificate
YearAge
Non-Guaranteed ReturnProjected Investment Return:
(X% p.a)Projected Investment Return:
(Y% p.a)
Asset Manage-
ment Charge (RM)
Cash Value (RM)
Total Death Benefit (RM)
Asset Manage-
ment Charge (RM)
Cash Value (RM)
Total Death Benefit (RM)
18 19 101 12,375 32,375 175 18,450 38,45019 20 108 13,050 33,050 192 20,032 40,03220 21 114 13,754 33,754 211 21,729 41,729
Takafulink Cerdik PlanMonthly contribution amount @
RM150
End of Certificate
YearAge
Non-Guaranteed Return
Projected Investment Return: (X% p.a)
Projected Investment Return: (Y% p.a)
Asset Manage-
ment Charge (RM)
Cash Value (RM)
Total Death Benefit (RM)
Asset Manage-
ment Charge (RM)
Cash Value (RM)
Total Death Benefit (RM)
18 19 202 21,556 41,556 351 33,623 53,62319 20 214 22,848 42,848 386 36,700 56,70020 21 226 24,128 44,128 424 39,939 59,939
National Education Savings Scheme (SSPN)
SSPN is implemented by outsourcing whereby PTPTN appoints collection agents who act as deposit collectors. This means that deposits will be collected by collection agents, the majority of whom have comprehensive branches in throughout the country.
Source: http://www.ptptn.gov.my
SSPN (cont.)Saving Estimation for 17 Years from Various Deposit Amount
Note: Assuming 4% dividend throughout tenure
Amanah Saham Didik (ASD)
Fund InformationTYPE Growth
CATEGORY Equity
OBJECTIVE To provide investment opportunity that generates reasonable long-term growth & return
POTENTIAL INVESTOR
Parents who have children
ELIGIBILITY Children of 6 months old but less than 18 years old (Akaun Bijak)
PRICE PER UNIT RM 1.00
FORM OF INVESTMENT
•Investment Book•Member’s Investment Scheme (EPF)
MINIMUM INITIAL INVESTMENT
Investment Book – 100 Units
MAXIMUM INVESTMENT
Unlimited
FINANCIAL YEAR END
June 30th
ASD (Cont.)
Transaction Information
Fund Performance
ASD (Cont.)
Net Distribution per Unit (sen)
Year 2007 Year 2008 Year 2009
7.00 7.00 6.30
AmanahRaya Berhad Offer Trust Account Trust Account for child education plan
– Safecare Trust Significant of Trust Account:
◦ Protection for beneficieries◦ It does not constitute part of the distributable estate
under Faraid law (for Muslims) or the Distribution Act 1958 (for Non Muslims).
◦ The Donor may allocate a portion of the estate to be held in trust for a particular beneficiary for a particular purpose.
◦ They are legally constituted and cannot be challenged. ◦ It ensures the protection of beneficiaries especially
minors or persons with disabilities.
Advantages of Trust AccountsSpeedy and hassle-free Asset
DistributionProtection AssuredProfitable Investment
AmanahRaya Berhad
Tabung Haji
Calculations:Pmt = 600N = 20I = 5%FV = RM 18,210.61
0 1 20
Age 2 21
50 x 12 = RM600
Which investment planning should be adopted?
Choose shariah compliance investment instrument
Depends on your objectives and your risk tolerance
Ensure that the policy recommended is based on your needs and financial capacity Eg : agent carries out a fact-finding evaluation process
Choose policy that will allow you access to the funds when needed
THIS IS IMPORTANT!!!
Discipline your children to save money for future needs.
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