Banking Only on Good Education for Your Child’s Future?

Education Money

Benjamin Franklin famously said, “An investment in knowledge pays the best interest,” and nobody would agree more to this ideology than Indian parents. From generations, parents have been focusing on their child(ren)’s education to the extent of paranoia. Millions of families, rich and poor, spend way too much time and money on their kids’ education with a singular aim – to ensure that their children get high-paying jobs and live in abundance. For this cherished dream, Indian parents sacrifice most good things, and at times, even the necessary things in life.

Touching; but, can good education alone ensure that your child(ren) would lead a financially comfortable life. Can good education ensure they will always have enough to live a lavish life and accumulate wealth, too?

Unfortunately, earning a lot of money and having a lot of money are two different things. While you splurge on your offspring’s nourishment, both physical and academic, it is equally important to teach them financial discipline, so that they become wise enough to spend what they earn in future judiciously.

The Story of Two Friends

Karan and Sameer met 35 years ago on their first day at work. Both had passed the entrance test for the government job with flying colours. Thanks to the shared value-sets and interests, both men soon became very good friends. Over the years, they worked as a team, rejoiced in each other’s success and mourned for each other’s loss. Their houses, too, were in the same neighbourhood, which meant that their families also grew close.

Karan and Sameer both had a son each, and like their parents, both friends paid a great deal of attention on their kids’ academic orientation. Right from the time both the children started school, they were sent to a slew of tuitions, workshops and mentorship classes. Sameer and Karan, in spite of limited financial means, left no stone unturned to provide the best of educational opportunities to the kids.

The single-minded approach towards the education of their children paid-off well, and both the kids scored top ranks in their respective schools and went to the premium institutes for professional education.

At the brink of their retirement, both Sameer and Karan were happy and content with their lives. Sameer’s son, Aakash, was based in Hong Kong and headed a big investment bank. Karan’s son, Krish, was the CEO of a promising startup in the Silicon Valley, USA.

However, a rude jolt was to rock Sameer’s life. It was all over in the news and papers; Aakash was arrested by Hong Kong police in connection to a financial fraud that plundered thousands of people of their life savings. The media announced that there was concrete evidence to implicate Aakash.

Sameer was crestfallen. All the values of integrity and honesty that he had taught little Aakash were in vain. Karan consoled his friend and tried his best to save him from the ridiculing public eye.

Over weeks, the real picture surfaced. The media reported that Aakash led an extravagant lifestyle and spent incredulous sums of money on hosting lavish parties, expensive cars, luxury yachts and private jet trips. Soon, he was spending way more than his salary. Unable to make wise financial decisions and a reluctance to forgo his dazzling lifestyle, Aakash took huge debts, and in a hope to quickly repay the debt, gambled even more. Borrowing from powerful and ruthless individual money-lenders meant that filing bankruptcy or defaulting was out of the option. Siphoning money from the customer portfolios seemed to be the only way out to him.

Krish, on the other hand, had made different choices in his life. Choosing a simple lifestyle, Krish followed his father’s teachings on attaining financial discipline. He remembered how his father would tell him to ‘establish a relationship with money’, or ‘to distinguish between needs and wants’. Krish, unlike Aakash, was not baffled with the power of money or the things it could buy. He had a clear relationship with money and had specific goals on spending his fortune. Before turning 30, Krish had become a globally respected and recognized figure for generously donating money to various charities, funding startups from underdeveloped countries and contributing towards the research to find cures to deadly diseases. Krish was taught well by his father that money is just a tool. It’s not wise to treat it as divine or devious, but to use it for the benefit of your loved ones, your fellow-countrymen and the world as a whole.


Today, the dusty curtain falls on Sameer’s supposedly ‘golden years’ as he prepares himself for fighting a long, expensive legal battle and hopes to survive on the meagre pension he would get. Unfortunately, Sameer, not unlike Karan, had used a majority of his retirement fund on his son’s education.


For the parents of teenage children, there is still hope. Financial literacy is a must to make your children truly independent in their life. Instead of fuelling their cupidity for fancy things that don’t add any value to their life, motivate your children to save and invest on regular intervals. When your children make good spending decisions, invest before spending and understand financial markets, there is no stopping them from creating substantial wealth over time. The financial independence can assure that your children will lead their life the way they want without compromising on their children’s (your grandchildren’s) academic and physical nourishment; a luxury you probably didn’t have.

Investing in mutual funds is the easiest and the most transparent way of ensuring high growth over a long period. Did you know that you can start a mutual fund SIP with as low as INR 500, and earn a compounded rate of growth, beating returns from any other asset class?


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