Disciplined approach towards savings
Mr. Gandhi taught us all a valuable lesson through his disciplined approach to savings. A little set aside every month, helped him built funds and also put him into the principled habit of saving. Mr. Reddy didn’t realise the price of his carelessness until many years later. If he would have saved for the future, not only would his son have benefited, but he would have too.
Relevance of starting early
Mr. Gandhi started keeping money aside in a life insurance policy and his savings were left to accumulate. By the power of compounding, his benefits multiplied and so did his son’s joys when he could afford to send his son abroad. Not just that he has the flexibility to dip into his accumulated funds for piano lessons for his other son. Saving for the long term certainly sets the power of compounding in motion. This definitely lends meaning to the old adage 'the longer the wait, the sweeter the reward'.
Flexible options to enhance talent
Mr. Gandhi is thinking of using some of the funds in his policy to help him pay for guitar lessons for his younger son. His younger son is showing a keen interest in guitar and Mr. Gandhi’s long term savings are finally paying off. Remember, you may not be able to make dreams come true overnight, but with a wise savings plan by your side, the future definitely looks bright and every dream will have its chance in the spotlight.
Investment Flexibility
It is not only important to save for the future, it is important to choose the right financial plan to save for the future. Mr. Gandhi chose an insurance plan that would not only grow over the years and benefit him, but would also benefit his sons. He chose a policy that offered him funds when his son reached 18 years, so that he could afford to give his son the best education. Wouldn’t Mr. Reddy have been as well equipped if he chose a long term saving plan? Of course, he would have. Unit Linked child plans offer the flexibility to put the savings in funds of your choice ranging from pure debt to balanced to pure equity funds, depending on one’s risk appetite.
Tackle Consistent Inflation in Education
Even the inevitable rise in inflation that drives up education costs didn’t worry Mr. Gandhi. He had a policy that was busy compounding over the years to counter this rise in inflation. On the other hand, Mr. Reddy now feels the pinch of the cost of education because he didn’t think ahead. Quite simply only thinking in the short term left him financially stunted.