• The investment with a thousand-fold returns

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    SERGE B. BARGAYO, RFP

    Let me borrow a line from Benjamin Franklin: “An investment in knowledge pays the best interest.” I agree 100 percent. Education is the best legacy we can give to ourselves and to our children. It is an intangible asset that our children can accumulate and cannot be taken away from them. In this world, it is either you create a generation of successful people or a generation of poor people. It is definitely our choice.

    Let me put things into perspective by giving an example. Our brain is like land. What we are going to plant on it depends on us. Is it corn or a deadly poison plant? The choice is ours. If we cultivate the land with the right kind of plant like corn, it will give us in return food that we can use for the present and even the future.

    Our mind is more fertile than the land. It gives us more abundance and even wealth. Psychologists have found that we are only using less than 10 percent of our brain. Even the world-renowned geniuses were just using nearly 10 percent of their brains. As human beings, our minds are our greatest resource. Our mind will only function at its best if it is used and exercised. Like our muscles, it will only do its part if it is being used, like going to the gym. The exercise to our brain is through learning. It needs new information to function very well, such as by reading. To maximize this potential, we need to have continuous education. As what they say, if you stop learning, you stop living.

    Why is education important?

    The government wants the education system to yield better results through the K to 12 program. Our leaders believe that our educational system should raise the bar among graduates to ensure their competence. This is a sad but challenging fact: most job openings require college education as a minimum qualification. Over 75 percent of the better jobs go to college graduates, with an average increase of 7 percent to 15 percent compounded annually. Also, our government provides less support on education compared with some other countries.

    It has been found out that on the average, out of 100 students who started first-year college, only about 11 percent graduated. Financial problems are the reason for the nearly 90 percent dropout rate. It is sad to note that to those who were not able to graduate had fewer job opportunities, difficulty in moving ahead, bigger financial problems, and, one thing I am afraid of the most, lower self-esteem. Not everyone is like Bill Gates or Steve Jobs who were college dropouts but still emerged successful in their fields. The thing about them was that they kept on educating themselves in their chosen field. They planted knowledge in their minds even without formal education.

    Things to consider for education planning

    To sum it up, knowledge is a vital tool to one’s success. As a parent, we have our own fears and goals for our children. Our major goal for them is to have, as much as possible, a convenient and comfortable life. We want them to avoid any financial problems during this stage. Our fear is for them to experience what we don’t want to happen to them. This being said, here are the things that we need to be aware of: the age of your child; your choice of school and the type of course your child would probably take up; cost of tuition at present; average inflation rate; and the location of the school.

    These are the inevitable things that we need to consider in planning for our children’s education. With this information, we will be able to compute how much you need to prepare for their college expenses. We can compute it year by year then sum it all up for you to have an idea on how much you need to prepare, or better yet, how much you need to invest to finance future education costs.

    As the bible says: “A good person leaves inheritance for their children’s children.” This is to say that giving our children a good education, especially the value of planning ahead, is an intangible asset that they can pass on to their children.

    Serge Barcenas Bargayo is a Registered Financial Planner of RFP Philipines. Learn more about investing in the 1st Millionaire Investor Bootcamp this March 2017. To inquire, e-mail info@rfp.ph or text <name><e-mail> <MIB> at 0917-9689774.

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