Create a Children Education Fund

Few months ago - May 4th 2006 to be exact, my beautiful daughter Shwetha was born. It was a happy momment and everyone rejoiced. After a few months when things settled down - a new realization set in - I needed to plan for her future. One of the most important thing I need to provide as a father is for her education. Given the rising costs of college education, I had to plan an investment program for her college education. I reckon that she will need atleast Rs 50 lakhs (or Rs 5 Million or $111,000) for her college education.

The plan I drewup for her education fund is as follows:

Invest Rs 5000 per month in a market linked investment fund which returns 12% on the investment. If I invest for 20 years this investment will be worth Rs 50 lakhs (or Rs 5 Million or $111,000) which will be used for her college education.

This money will be invested with a market linked investment fund from ICICI Lombard. The fund currently has a 23% CAGR over the last 5 years. I am assuming the net return over the period may be around 12%.