20-05-2025
Radhika Gupta explains why she is saving Rs 10 crore for her son's education
Radhika Gupta
, MD and CEO of
Edelweiss Mutual Fund
, recently shared a practical insight into how she is planning to save for her child's education, which could cost around Rs 10 crore with proper planning.
In a post on the social media platform X, Gupta shared her calculations and highlighted an important lesson in financial planning— never underestimate the impact of
inflation
.
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'I've got a bunch of baffled messages about how education can cost Rs 10 crore,' Gupta wrote on social media. 'The math is simple.'
I've got a bunch of baffled messages about how education can cost 10 cr.
The math is simple
Current 4 US education: 2.5 cr
Inflation: 5%
Currency depreciation: 4%
Time: 16 years
2.5 * (1.09^16) = 9.9 cr
We underestimate the impact of inflation when we do our financial…
— Radhika Gupta (@iRadhikaGupta)
May 20, 2025
She explained her calculation considering the following parameters:
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Current 4 US education: Rs 2.5 crore
Inflation rate: 5%
Currency depreciation: 4%
Time horizon: 16 years
When compounded, these figures lead to: Rs 2.5 crore × (1.09^16) = Rs 9.9 crore. That's nearly Rs 10 crore
According to Gupta, while doing the
financial planning
, one always underestimates inflation and this isn't just about education but even while planning for
retirement
.
'We underestimate the impact of inflation when we do our financial planning,' she said. 'Not just for education but even for retirement. Always do the numbers and plan early.'
The CEO also shared one more insight which was the SIP amount required for this goal to achieve will be Rs 1.6 lakh a month as a working couple.
She explained the total capital that we will put over a period of 18 years will be Rs 3.5 crore and the rest of the balance of Rs 6.5 crore will be coming from time and compounding.
'Make a spreadsheet with 12% assumed returns and watch the magic. Btw, for the math feels who say inflation should be factored into currency depreciation, I am using USD education inflation not India :),' Gupta posted on social media.
— iRadhikaGupta (@iRadhikaGupta)
Gupta also acknowledged that every family will have their own values and perspectives when it comes to higher education. 'Everyone can have their own view on where kids should study or whether education will be relevant at all,' she said. 'An India undergrad + master's, by the way, is also Rs 80 lakh to Rs 1 crore in today's terms—maybe 30% of US costs. This math matters for everyone.'
Whether your child plans to study in India or abroad, the planning with realistic assumptions is crucial. Even if one doesn't aim for international education, ignoring inflation and delaying planning can leave future goals underfunded, she lastly mentioned.
One should always know that starting early gives your investments more time to grow. Even small amounts invested at the right time can outperform larger amounts invested later. Compounding helps your money grow faster by generating returns on both your principal and earned interest. The longer you stay invested, the greater the benefit.
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Gupta, in her posts, mentioned that staying invested and patient pays off for 'Dumber' investors against the timing market.
She posted on social media platform X (formerly known as Twitter) that the smartest strategy is to stay invested and stay patient, as a large part of a year's returns come from a few critical days, and those are hard to predict.
'A large part of a year's returns come from a few critical days, and those are hard to predict. For us "dumber" investors, staying invested and staying patient is the easier and more effective thing to do!' said Gupta.
