Edelweiss' Radhika Gupta Shares 5 Tips On Investing For Children: ''Do Monthly SIPs''

Radhika Gupta, Chief Executive Officer and Managing Director of Edelweiss Mutual Fund, recently shared some valuable tips for parents seeking to start their children's investment journey. Ms Gupta, who has always advocated for early-age investing, believes that new parents must start investing financially in their children at the earliest.

In a post on X, which was shared "on popular request" on March 29, she listed some quick methods for parents to start investing in children at an early stage to secure a financial future for them. Ms Gupta advised the parents to get their child's documents in order, define a goal, invest in 2-3 SIPs every month, and regularly review and adjust goals. 

See the post here:

On popular request, some quick thoughts on investing for a child:

1. Get the docs done - birth certificate, Aadhar, PAN and then bank account. Actually very easy to do for a minor.

2. Try to find a goal - higher education is one - to save for. Break it down into the number…

— Radhika Gupta (@iRadhikaGupta) March 29, 2024

Here's what she wrote:

1. Get the docs done - birth certificate, Aadhar, PAN and then bank account. Actually very easy to do for a minor.
2.  Try to find a goal - higher education is one - to save for. Break it down into the number of years you have to figure out an investment amount.
3. Do monthly SIPs. 2-3 funds work. Can use a large / mid-index fund for broad market exposure, mid and small-cap funds to add risk, and an international fund if you are thinking study abroad to manage the currency. ,94 those who asked you can do all this without a children's specific fund like gift etc.
4. Review this periodically as goals change, and make it more conservative as you get closer to the goal. Involve the child in the process as they are old enough to understand.
5. This isn't a perfect process and you can easily create your own. But it's enough to start. Finally encourage those who gift to gift units or SIPs to kids. I know the pain of having three ball pools and four strollers as gifts and storing them in a Mumbai home. Financial gifts are productive and take up less space.

Notably, SIP (Systematic Investment Plan) is one of the popular saving and wealth accumulation tools in the investment market. For running a SIP, you need to invest a fixed amount at predetermined intervals. The amount could be as low as Rs 500 and you can pick the intervals depending on your flexibility as weekly, monthly, quarterly, half-yearly, and annually.

Maintaining them for 15-20 years will give you great returns in future. The earlier you invest, the better. SIPs stand to benefit in the long term as the investment growth is compounded and any periodic loss is averaged out.