“Smart kids can

get scholarships.”

.

Your child is smart enough to get straight A’s. Counting on obtaining a scholarship, however, isn’t always the smartest move.

“Ma, I scored 9A+!” Hearing your child exclaim his results, you breathe a sigh of relief thinking that his exceptional scores will earn him a scholarship. For the 9, 239 top scorers with 8A+ and above in the 2010 Sijil Pelajaran Malaysia (SPM) examination, that may be the case. The government recently announced that all top scorers in the SPM examinations with at least 8A+ will be eligible for the Public Service Department (PSD) scholarships¹. The news certainly brought cheer to the parents of these brilliant students.

Having exceptional examination results has its advantages and may open doors to education funding from the government or private sector. However each scholarship comes with its own set of eligibility conditions and may require the successful scholarship applicant to be bonded with the company or organisation.

Furthermore, the amount of aid as well as type of scholarship, whether for local or overseas tertiary education, is determined by the awarding body and not you or your child. The number of scholarships available for a particular course is also limited. Top scorers looking for financial aid for popular courses such as medicine may not always earn one of the coveted spots². With the financial decision out of your control, your child’s pursuit of quality higher education of his choice may be restricted or compromised.

A smarter move would be to consider scholarships as a bonus should your child receive one. With sound financial planning and by starting early, you can take steps to grow an education fund, hopefully, as large as your child’s ambition.

Start where you are

Investments may change depending on where you and your family find yourselves in life’s journey. If you’ve just been blessed with a newborn child, you may want to set up an education fund for him or her as soon as possible and take advantage of the long time frame to accumulate the required funds. If you’re further down the road and your child is nearer to college age, you may want to catch up with more aggressive investments that can offer higher returns. As with any investment, there are inherent risks involved, and generally higher returns would involve taking a higher risk.

Set up a portfolio

There are a myriad of investment options that you can use to achieve your goal of funding your child’s education, each with their own risks and potential returns. Talk to your Relationship Manager to customise a portfolio that fits your goals and risk appetite.

Review periodically

Monitor and make adjustments to stay on track with your target goals, especially when you encounter major life changes such as a newborn child, career advancement or moving to a bigger house.

Your child has the potential to excel. Don’t let it go to waste due to insufficient funds. Talk to our Relationship Managers and start planning for your child’s future with our wide range of investment and protection plans available for you. Visit your nearest HSBC branch or www.hsbc.com.my for more information.

Source:

1. New Straits Times, “SPM: Best results in four years with 9, 239 straight ‘ A’ scorers”, 23 March 2011.

2. The Star, “Cabinet always keeps its word, ways Wee”, 7 May 2011.

December 2011