Thursday, January 28, 2010

Saving for My Child's Education

As most of you know by now, I have started a POSB Kids Savings account for my child.

The main purpose of this account is to save for his university education. This account also allows me to deposit all my spare coins at no charges.

The figure that I am aiming for is S$100,000. Yes, it might not be enough for an overseas education in 20 years time but I guess it is better than nothing.

Having been deprived of the chance to study overseas because of the lack of money (alas, and also the lack of good grades to get a scholarship), I always felt that I was "disadvantaged" in a certain sense because I did not get to study abroad.

My SAT score then was 1390. Not very high but sufficient to get me a place into universities like Brown University and University College of London (I can't remember what were the other universities that I applied to). However, the lack of funding made me decide to pursue a local university education instead.

This is something that I do not wish my child to face. I hope to be able to have the financial capacity to put him through his studies overseas if he is able to make it into any university there.

I have seen so many people who have gotten worse grades than me but have been able to pursue an overseas education at quite reputable universities because they have the financial means. Is this fair? Nope. But this is life, and life isn't fair sometimes. It also won't be fair when I become a millionaire faster than them even though I don't have the same qualifications as them =)

My child, if you read this someday...know that Daddy is saving up hard for your education. I am doing my best yah?

$1375 and counting...everyday, I drop all my spare change into a little container which I will then deposit into his university fund. I wish I had started saving for it earlier.


  1. Overseas university for kids is too expensive for normal salaried workers and you can forget about your own retirement plan.


  3. We always want our children to do better than ourselves. Good that you are thinking so far ahead.

  4. I've made up my mind to be a happy and successful "thousannaire", instead of trying to be a "millionaire" who may not have enough time and energy for himself and his loved ones. Of course, I am also planning for my child's education - so far I've planned to put S$6,000 per year into her account and grow this as out salaries increase over the years.

    So far, it's worked out fine! Haha!

  5. Wow. Its always great to leave a legacy behind for your child.

  6. Actually the best way to save for your child is to have an endowment with an option to cease premiums if you're gone. No other way can carry on saving when you're no longer around.

    Ya, the returns suck, you can do better in investing whatever. I'm not saying 100% into endowment, but at least a significant portion. The peace of mind that even if you're gone, the child still gets to get a good education...that's priceless.

  7. Hi FF,

    Just a little tip to help you out.

    Have you heard of Walton International's land banking investment?

    Many people use it for their retirement or to fund their kid's overseas education.

    It gives a good average compound return of 14-15% p.a. which means you can double yr overseas educational fund in 5 years. This investment has a good track record and has never lost money in 30 years.

    You just require a minimum investment of US$10,000 to start.

    If you want to know more about the pros and cons of Walton's product just call or sms me at 91250130.

    Oh by the way, I am not a salesman there but I have a good friend who is a sales manager there who might be able to explain it better to see if it fits you.

    No obligations. Cheers!


    I am a small investor of Walton's products too. This is mainly to build up my funds for my retirement. Might also be using some of the profits to generate cashflow in the future.

  8. Wow MW, you are really managing to save a lot for your child's education. Well done!

    CW8888, i read your posting about sending kids to overseas university.. Makes me think whether I should even have another kid =)

    I don't really like endowments because of the long lock in period and the low coverage. This is in exchange only for a small guaranteed amount + non-gtd component. That is why I chose an ILP instead as another tool to save for my son's education. Gives greater protection and greater returns (albeit all non-guaranteed).


    I have thought of land banking before. But the capital outlay is huge and I don't really like the lack of liquidity

  9. Well, Land Banking may have low liquidity but you must realise that you only need the funds after 20 years for yr kid's education.

    Its like endowment as it takes an average of 5 years before you can see good profits.

    IMHO this is the best tool you could use as ILP can be rather volitate as seen in the recent financial crisis. LB on the other hand has more consistent growth nature. This tool is perfect for children's education funds as you don't want to take risks with that money with paper assets.

    As for the capital outlay, I myself saved up to invest US$10k in it. I guess you can too if you are really keen.

    Its like single premium as it really a real estate investment and you get a title deed too.

    Well, if you want to explore more regarding this do feel free to contact me.

    And by the way, I am only comfortable with Walton's land products. Their other competitors do not have a solid track record yet so I am not putting a single cent into them.


  11. Hi FF,

    I think i mentioned this before. But I'll say its again. I have an endownment plan. I bought it for my kid in future.

    I'm still not married yet. Save first, less worry later

  12. gohsip,

    Your endowment plan is to pay for tuition fee or expenses?


    (Exchange blog links? yrs is up on mine alr.)

    parents nowadays provide for their children so much. i also wished i had an overseas education too. but parents did not save anything for my education, hence had to self fund, n it was beyond me to self fund an overseas university.

  14. Uncle8888,

    at the moment I don't know. Save first. Decide later. But I did for the purpose of my kids in future

  15. Lau, I have put up your link already =) Thanks for leaving ur comments.

    Endowment u need to be sure of the time frame. What if you get a 21 year endowment but end up your child is a girl and will go to university at age 18 how? So save first is correct..but must know what you are saving for and when u need it then might be better

  16. FF,

    I had similar misgivings about endowments. Everything you said is true except the part on low guaranteed. There are products with as much as 80% guaranteed portion of the projected value (And i only see 3.75% projected, never any higher).

    I only like it for one reason - that is you can have a rider that allows you to keep saving when you're no longer around. No need to pay premiums anymore. No other instrument can do that (unless you pay one off in 1 lump sum lah!). THAT is what I call peace of mind.

    I'll probably put in 50-80k endowment. This will make sure I have at least 50k no matter what happens to me, for the kid's education.

  17. Brolp,

    Can you give us the details of your endowment?

    1) How many % of Total premium payble is the guranteed portion? e.g. 1xx% of total premium payable?

    2) What is % projected portion?

  18. Hi LP,

    I shouldn't call it misgivings against endowment la. It is just a preference =)

    I feel that ILP is able to give a much better coverage if compare dollar for dollar. When I am not around, the coverage from my ILP will be able to send my kid to overseas university.

  19. Hi, FF,

    For those who have not seen my reply, check out bro8888's blog for it:


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