Education Funds: Discretion for Kids, Wise Choice for Parents


With the foresight to save for the educational expenses of her son Thomas, Lily invested a sum of $1,000,000 in 5 years following the birth of her son. When Thomas reached 18, the age for college admission, Lily withdrew 25% of her principal amount (i.e. $250,000) each year, and she obtained $1,500,000 in 6 years that supported Thomas to finish his bachelor and master degree. The account has a current balance of $2,000,000 that can be withdrew at once, but Lily chose to retain this account and compound the cash value that will double every 9 years. The cash value will have exceeded $4,000,000 when Thomas is 33. Withdrawal at that time will enable Thomas to realise his dream of entrepreneurship.