DelhiDesk Many Indian parents are sending their children abroad for higher education, citing quality education, international exposure, and lucrative job opportunities as reasons. The number of people disclosing their purpose of visit as study/education while going abroad has increased by 45% over five years, according to data maintained by the ministry of home affairs. However, education costs are also increasing, including course fees and living expenses, and parents need to consider inflation and exchange rate movements. Investing in international equities can help parents prepare for these costs, as it ensures their investments match or exceed education inflation. It is also important to mitigate exchange rate risk by creating assets in the same currency as the liability. Parents should estimate future education costs, compound them for inflation, and discount them to the present day using the expected rate of return in international equities to determine how much they should invest. Starting to plan early and investing pragmatically is crucial to matching or surpassing rising education costs.
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👉 Many Indian parents send their children abroad for higher studies.
👉 Quality education, international exposure, and lucrative jobs are reasons for this decision.
👉 Data shows a 45% increase in Indians going abroad for study/education over five years.
👉 Education costs are increasing, including course fees and living expenses.
👉 Inflation and currency depreciation can make arranging finances difficult.
👉 Investing in international equities can help mitigate these risks.
👉 It’s important to invest in assets that match or exceed education inflation.
👉 Domestic equities may be sufficient for studying inland, but not for studying abroad.
👉 Creating an asset in the same currency as education costs can mitigate exchange rate risk.
👉 To estimate future costs, compound costs required today by inflation and discount to present day using expected rate of return in international equities.
👉 Start planning early and pragmatically to match or surpass rising education costs.
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