When you raise a child, you have high expectation from them. You think that they will surpass your achievements in life and make you feel proud. And what do you do for that? You provide your child resources for quality life and education. But every quality thing comes at a price, and you need to have a decent amount of money to afford that. But bearing these expenses will not be an uphill task if you are considering them as a financial goal. You just need to start investing early. The best time to start invest is when your child is born. You can make many types of investment, market-linked, or non-market linked.

One of the options that you may pursue is the 21X10X21 strategy of mutual fund investment through systematic investment plan (SIP).

If you follow the strategy and get annualised return of 12 per cent on your mutual fund investments, you can build a corpus of more than Rs 1.10 crore by the time your child turns 21.

You may spend that money on their higher education. Know what is 21X10X21 formula and how it works.

What is 21x10x12 formula?

According to this formula, when you child is born, you start a monthly SIP of Rs 10,000 in their name and continue it for 21 years.

The expected return is 12 per cent in these 21 years.

The benchmark Nifty 50 index has given over 14 per cent returns in the last decade, so 12 per cent return can be considered as moderate.

One can achieve it through systematic mutual fund planning.

Now, in 21 years, your invested amount will be Rs 25,20000.

At 12 per cent return a year, your estimated long-term capital gains will be Rs 8866742, and you will get an expected amount of Rs 11386742 (Rs 1.14 crore)  

Can’t you save Rs 10,000 a month?

People complaint that we don’t invest because we can’t save money.

But saving is a tough habit that you need to develop over the years.

The 50:30:20 rule says that one need to save at least 20 per cent of their monthly income.

So, even if your salary is Rs 50,000, you must save Rs 10,000 (20 per cent of it) in a month.

If your salary is more than Rs 50,000, a Rs 10,000 monthly saving should not be a problem for you.

This Rs 10,000 saving invested in mutual fund(s) through SIP may work for you to get over Rs 1.10 crore corpus by the time your child turns 21.

(Disclaimer: Investments in mutual funds are subject to market risks. Do your own research or consult your advisor before investing.)