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Cape Town - The best ways to create inter-generational wealth in a family is to ensure children can afford a good education, keeping the family free from short-term debt, getting good advice and saving for financial independent when one retires, says Old Mutual.
According to Old Mutual, the single most important factor in providing children with a bright future is to start saving early, preferably the day they’re born. This is likely to ensure you have enough money by the time they start school.
The most recent Old Mutual Savings and Investment Monitor found that, while 37% of parents with dependent children are saving for their children’s education, 55% have no idea of what that education would cost.
“Many parents still believe they have no option but to make serious financial sacrifices to pay for their kids’ primary and secondary education, then take a student loan, which takes years to repay and carries high interest rates. Many feel, for instance, that they can’t save for both their own retirement and their children’ education," Old Mutual said in a statement.
“What’s surprising for most parents is that education inflation is around 8.1%, much higher than the official inflation rate. That means for instance, that a three-year university degree that costs about R177 000 now, could cost about R4.1m in 10 years from now.”
