Post on 29-Jan-2018
transcript
Education = Future If you think education is expensive, try ignorance.
Presented by Dieter SauerbierA Liberty Life Financial Advisor
Disclaimer
The information and examples in this presentation are for demonstration purposes only, and should not be considered as advice.
You are encouraged to discuss any financial planning requirements with your financial adviser.
Luckily for you, the gentleman currently presenting is qualified to give advice, so please set up an appointment after the show.
Why are we here?
Recently the South African government calculated that the cost of raising a child from birth to 18 years of age could reach R 1 681 470
They also dropped the maths pass rate to 20%
• How did they get to that number?• What are the major expenses?• How do I plan to save?• What if I'm no longer around to
support my child?
Let me show you
Today I’d like to focus on the cost of education.
How some things have changed
In the beginning
At this stage you would have done some pre-planning.
• Furnishing the nursery = R 7 000• Feeding equipment and accessories = R 5 500• Clothing & nappies = R 3 000• Bathing supplies = R 2 500• Baby proofing the house = R 1 500• Travel Gear = R 5 500
Total set up cost = R 25 000
Pre-School
Stay at home parenting or child care?
• Day care or Crèche, expect to pay between R 1450 and R 3600 per month
• Nannies (who don’t live in) cost between R 4000 to R 6000 per month
Quick lesson on inflation • Current inflation rate is roughly 6%, but what does that
mean?
Primary School2017 School fees
Edgemead Primary school R 13 280
Curro Century Citywith out day careR 30 000
Camps Bay PrepR 39 324
Reddam House PrepR 75 480
Western Province Prep grades 0 -2 R 49 645.R 80 770
Education inflation
Average over the period is 9.18%
Primary school fees
Age attained Year
Edgemead2017 school
fees R 13 280
Curro 2017 school fees at R 30 000
Reddam 2017 School fees at
R 75 480
7 2023 R 24 590 R 50 320 R 126 590
8 2024 R 26 860 R 54 850 R 137 990
9 2025 R 29 330 R 59 780 R 150 400
10 2026 R 32 030 R 65 160 R 163 940
11 2027 R 34 970 R 71 030 R 178 690
12 2028 R 38 190 R 77 420 R 194 780
13 2029 R 41 700 R 84 380 R 212 300
Inflation 9.2%
Total cost for primary school over 7 years
Curro = R 462 940Reddam = R 1 164 690
Edgemead = R 227 670
So how do you do it?
• You need to start planning now!• Set your goals.• Determine what you can afford.• The important thing is that you start somewhere.
• With all the additional expenses• Sleep deprivation, Lack of time, possibly not at the top of
you game• Its easy to put this off until tomorrow.
Illustration is based on R1000 per month
5% increase per annum
With an 8% return year on year
Total Saving R 129 251
Total invested R 97 704
Total Interest R 31 547
High School2017 School fees
Edgemead High R 18 520
Wynberg Boys HighR 40 000
Rondebosch Boys HighR 41 400
BishopsR 96 360
Herschel Girls SchoolR 94 780
High school fees
Ageattained
Year
Edgemead2017 School
feesR 18 520
Rondebosch 2017 school
fees R 41 400
Bishops 2017 school fees R 96 360
14 2030 R 63 500 R 126 930 R 295 430
15 2031 R 69 340 R 138 350 R 322 010
16 2032 R 75 720 R 150 800 R 350 990
17 2033 R 82 690 R 164 380 R 382 580
18 2034 R 90 300 R 179 170 R 417 020
Inflation 9.2%
Total cost for high school over 5 years Rondebosch = R 759 630
Bishops = R 1 768 030
Edgemead = R 381 550
Illustration is based on R1000 per month
5% increase per annum
With an 8% return year on year
Total Saving R 407 725
Total invested R 235 183
Total Interest R 172 542
University
# Fees must fall! – But will they?
What are the chances ?
UCT fees 2015
University fees
Age attained YearBcom
In 2017 R 62 500
BscEngeneering
In 2017R 53 000
19 2035 R 332 750 R 282 170
20 2036 R 363 360 R 308 130
21 2037 R 396 790 R 336 480
22 2038 R 433 290 R 367 430
Inflation 9.2%
Total cost for University over 4 years
Bcom = R 1 526 190
Bsc = R 1 294 210
Summary of Education costs
Primary SchoolFrom To Edgemead Reddam
2023 2029 R 227 670 R 1 164 690
From To Edgemead High Bishops
2030 2034 R 381 550 R 1 768 030High School
From To Bcom Bsc
2035 2038 R 1 526 190 R 1 294 210University
TotalOption B R 4 226 930
Option A R 2 135 410
Option A Option B
Illustration is based on R1000 per month
5% increase per annum
With an 8% return year on year
Total Saving R 768 040
Total invested R 364 061
Total Interest R 396 486
So where to from here?
• Consider the best savings product based on your circumstances
• Build your life long plan
• Don’t panic!
Savings options
• Savings Account• Unit Trust/Collective investment• Tax free Saving• Endowment
“Peace of mind is attained not by ignoring problems, but by solving them”
- Raymond Hull
Thank you.