4 Tips for Investing in Stocks to Become Children's Education Savings
Netgenz - Stock | For those of you who already have a family or who already have children, it is important to prepare a teaching fund for them. There are various sources of funding, either through savings or insurance.
So what about investment? Can once. Investment is one of the right steps to prepare children's teaching funds. Investments in property to gold may have been used. But what about investing in stocks for the cost of teaching children? This option is still rarely implemented.
Can it? The answer can be once. Stocks as investment instruments with high yields. Investing through stocks can definitely help us raise funds to achieve long-term goals.
Here are 4 Tips for Investing in Stocks to Become Children's Education Savings
1. Cannot use existing teaching funds to buy shares
Nach, to invest in stocks, sometimes you shouldn't use the funds that you already have and have prepared as expenses for teaching your children to buy stocks.
When this happens, you are using hot money to invest. Instead, invest in raising or adding to a child's teaching fund.
Existing teaching funds must be used for all of your child's academic needs, be it paying tuition fees, buying books, uniforms, paying building fees, credits, and others, not for investment or trading.
If you really don't have funds, you don't work, just budget a minimum of 10% of your income/month to buy shares. Buy stocks with an averaging fee system regularly / month.
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2. From the stock investment results, it can be used to fund children's teaching at high levels
If you have a child who is in the 3rd grade of elementary school, there is nothing wrong with buying shares for the capital costs of teaching at the high school or undergraduate level. This is because the investment you are working on has a long-term goal.
Think about it, on January 22, 2010, PT Bank Central Asia Tbk (BBCA) shares were priced at IDR 4,825 per share. But on January 29, 2021, the price has reached Rp. 33,800. Those who bought 11 years ago must have made a profit of 600%.
As long as the shares you buy are company shares with high profitability, healthy finances, and lucrative business prospects, therefore the share price of the company will continue to grow, despite volatility in a short period.
3. It is not allowed to buy shares to be marketed in a short period
Just think, you have a child who is about to enter elementary, middle, high school or enroll in college a year or two ahead. That means you will pay school registration fees and other fees in a short period.
Buying stocks to meet short-term financial direction is possible, but it's "really risky."
Business transactions on the exchange are actually almost the same as business transactions on the market. The law of economics occurs in that trade, when one stock is brought by many investors, the price will increase, and vice versa.
Stock fluctuations in a period of one or 2 years are really very high. It could be, because of bad sentiment that exists in a short period that affects our rate of return. It is advisable to choose a low-risk instrument. Call it such as deposits, state securities, or money market mutual funds.
4. Know the risks of investing in stocks
This last point is important! Stock investment has a high risk and cannot be carried out arbitrarily. Buying shares is the same as buying a company. Even though your ownership is small, you have bought a "business". Investing by buying a business will definitely take a long time.
Know good essential analytics before you buy stocks to invest in. Identify the ratios that show the profitability, financial health, and valuation of a company, also compare the performance of the company with its competitors.