GIVING THEM THE OPPORTUNITY FUNDING YOUR CHILD’S EDUCATION
If a man empties his purse into his head, no man can take it away from him. An investment in knowledge always pays the best interest Benjamin Franklin
Introduction An increasing number of professionals of all nationalities have been moving and working abroad in the last decade. Whether you are a young executive or a high net worth individual with a diversified portfolio of global assets, you will have specific financial requirements and objectives. Offshore financial products and services can help you achieve financial security and provide you with the quality of life you require as an expatriate or international investor. Investing in international accounts is no longer the premise of the rich and famous; all expatriates living abroad may now enjoy flexibility, among other benefits, by investing their money overseas. The offshore financial industry has become more popular as financial institutions from around the world have entered the offshore market as a result of the high demand. There are now many providers that offer a broad range of services ranging from saving schemes to pension and retirement plans and wealth management accounts to lump sum investment products. Over the years, deVere has developed strong partnerships with some of the world’s leading investment houses and insurance companies, all of which offer some of the most competitive products in the marketplace and a high level of protection for the investor. In this guide, we aim to provide you with essential information on funding your child’s education as an international investor or expatriate. In addition, one of our experienced financial consultants can assist you further by taking you through some of the options available to you that will help you start saving for your child’s future. Providing for your child’s or children’s education is one of the greatest investments you can ever make. Quality schooling and higher education is essential in today’s society to stand the best chance in succeeding. The benefits of providing your children with a good start in life outweigh the costs, both emotionally and financially. Emotionally you want to make sure that your children are given every opportunity to fulfil their potential and that their school lives are both enjoyable and productive. And financially, you want to be able to assess the different alternatives and be in a position to choose the best option for your child. As an expatriate you are in a privileged savings and investing position. Offshore saving plans offer a flexible way for you to save money to fund the cost of your child’s education.
GIVING TH E M T H E OPP ORT U N I T Y : FUNDING YO U R C H I L D ’ S E D U C AT ION
Cost of education In the annual survey from insurance and investment group LV= on the cost of a child published in January 2009, it shows that parents spend the average of £193,772 on raising a child from birth to the age of 21. The survey shows that costs have increased by 4% since December 2007 and is up 38% since 2003. Childcare and education remain one of the biggest expenditures for every household, and raising children is becoming increasingly expensive. Given that the cost of education is growing at around 7.5% p.a. you will need to double or even treble this amount to reach the figure required to finance your children’s education when they eventually reach university age. In summary:
• Boarding schools can cost in the region of £20,000
• University fees add up to five figure sums
• And all the extras such as books and uniforms need to be taken into
account
All in all, paying for your child’s education requires planning and may depend on many factors including:
• The institution that you choose for your child
• The chosen path of study
• The country of study and whether your child is to be classed as an
overseas student or not
• The city in which your child studies
Ask yourself the right questions As an expatriate, there are a number of important points that should be considered that will determine the right path for your child’s education:
• Are you in an environment where the local standards of education differ greatly from the
standards that you want for your child? For example, you can enrol your child in state
• Is the language in your country of residence going to prove to be a barrier to your child’s
learning?
• Do the teaching and qualification standards in your country of residence compare
favourably to the standards back home? An education to western standards can be well
schools in China, but can only do so if they are approved to take foreigners
above the cost of a private education in your home country. This is because international schools pay expatriate salaries and living expenses to the teachers they bring from your home country. • Are you living in an environment that is not 100% safe or stable and could this adversely affect your child’s education development? • Does the international school still charge a full year’s tuition if your child leaves before year-end? Are there other penalties you must pay for early withdrawal?
Each of these issues should be considered carefully before you start planning. You will most certainly be presented with a choice between private or state schooling and weighing up factors such as costs, logistical concerns and the difference in quality between the two is essential. Remember that it is down to you to take responsibility for providing your child with the best possible opportunities.
GIVING THE M T H E OPP ORT U N I T Y : FUNDING YO U R C H I L D ’ S E D U C AT ION
Find the right school The number of schools available at home and abroad is vast. To make your decision easier, focus on what type of school will best meet your child’s needs. The internet and personal recommendations serve as a good starting point for your search. The internet can provide you with information on educational practices overseas, the school’s curriculum, whether there are any international schools available to you and school fees. Once you have shortlisted a few schools, ask for their brochures. You may want to look out for information on the average academic achievements of the school’s pupils, examine the school’s facilities, security arrangements and pupil welfare programmes – everything that is important to you and your child. Among the relevant questions to consider if you are thinking of sending your child overseas or back home to be educated, think of the following:
• What weekend activities are available to them?
• Will the school assist with the logistics of travel?
• Are there other pupils who would be in the same situation as your child?
• How easy will it be to communicate with your child?
• Once you have further reduced your shortlist, it is important that you and your child visit
the schools that you wish to consider. Get a feel for the atmosphere and talk to pupils and
staff and make sure you are comfortable with the school.
Receive financial advice Make sure you familiarise yourself with the necessary steps to take advantage of the position that you are in. The lesson with foreign education is that you cannot take for granted what is provided, or does not cost much, in your own education system. To help give your child a good education, you need to put money aside in a place it can grow and where you can make withdrawals easily when school fees need to be paid. If you haven’t started planning yet, now is the time to start. As an expatriate, you are in a privileged position, so make the most of the options available to you as early as possible. At the deVere Group, our consultants work with some of the leading investment houses and insurance providers. All our employees have been trained to provide the best advice and are familiar with the local knowledge/requirements of the region you live in/may relocate to. We can help you find a plan for your child’s education that best suits your needs and highlight some of the below benefits that may be available to you such as:
• Tax-free growth
• Government protection & security
• Products that move with you when you relocate or move back home
• Easy access enabling you to withdraw money on a regular basis for tuition fees
• Investment adaptability enabling you to adapt your education portfolio to changes in your
personal circumstances or that of your child
GIVING THE M T H E OPP ORT U N I T Y : FUNDING YO U R C H I L D ’ S E D U C AT ION
About the deVere Group The deVere Group is the world’s largest independent financial consultancy group. We work with international investors and expatriates to find financial services products that suit their medium to long term requirements for investments, savings and pensions. With in excess of US$7 billion of funds under administration and management, deVere has more than fifty thousand clients in over a hundred countries. Our independence and ability to offer financial products that are tailor-made to fit an individual’s needs are behind our success. As a result we now have offices in over forty countries. You can find us in Abu Dhabi, Brussels, Dubai, Geneva, Hong Kong, Johannesburg, London, Mexico, Moscow, Shanghai, Tokyo and Zurich, amongst others. The advice we provide is free and without obligation.
GIVING THE M T H E OPP ORT U N I T Y : FUNDING YO U R C H I L D ’ S E D U C AT ION
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