Home' Trinidad and Tobago Guardian : July 19th 2015 Contents SBG4 | NEWS
SUNDAY BUSINESS GUARDIAN www.guardian.co.tt JULY 19 • 2015
What if the
longer accessible? Or, your child wanted to
pursue a career that did not exist 20 years ago
and the only place to do this was at a foreign
It's a dilemma any parent could face, no
matter the age of their children.
"A parent should assume that they are going
to have to find this money one way or the
other," said Winston Williams, financial planner
and Pan American agency head.
According to Williams, parents make many
assumptions about how they will fund their
children's education, assumptions that may
not be borne out by cold, hard financial fact.
The continued availability of Gate is one,
he said. And Williams said it may have much
more to do with economics than politics.
"My feeling is, when given the particular
environment, the price of oil and gas as well
as how fast we are able to diversify the econ-
omy, the Gate might be closed."
"We have to point out to them (parents)
that conditions, economic conditions can
change," said Carlyle Fletcher, financial planner
and Million Dollar Round table member, "the
government may not always be in a position
to provide that facility. It is better that you
plan as though you don't have it than plan on
it and not have it when the time comes."
Even if the Gate programme remains on
stream, as Fletcher pointed out, there are sev-
eral other costs associated with tertiary edu-
He provided the Sunday BG with a table
listing expenses for several local, regional and
international universities that are popular with
T&T students. Although, Gate is available for
degrees within the UWI system, there are still
living expenses to contend with. A degree pro-
gramme at Cave Hill has yearly non-tuition
costs of $30,432 that are equivalent to some
courses offered at private tertiary institutions
locally, even though the tuition is covered by
Another assumption that parents make, said
Williams, is that scholarships earned through
sitting the Scholastic Aptitude Test will con-
tinue to be available.
However, the Pan American agency head
said, with the current US economic reality of
students graduating with the highest debt
levels ever, American student outcry could
potentially see this source of funding shut off.
"Many Americans are saying universities
are giving scholarships to foreign students,
who don't stay there. They get scholarships
and therefore have no debt and they go back
to their country. Meanwhile, they (US students)
are saddled with debt for the first ten years
or more of their working life. It could be a
simple change in the government from Demo-
crat to Republican and their policy shifts."
There are also other challenges that parents
may not have even considered.
How does one plan in the case where one
has more than one child, for example?
Another is simply the lack of variety available
when considering funding options.
"Many parents would utilise a mix of mutual
funds and, to a lesser extent, equity invest-
ments," said Williams, "the UTC has a plan
specifically for this purpose, but in fact it is
the First Unit scheme that is the underlying
instrument. There are no tax advantaged sav-
ings or education plans in T&T. In the USA
and in Europe there are specific tax incentive
plans for this purpose, but the reality is that
in T&T the most common instruments remains
the bank savings account and insurance poli-
Keith Charles, another financial advisor and
branch manager at an insurance company,
said other avenues parents can use to save
funds for tertiary education include, mutual
funds offered by banks, educational savings
facilities offered at some credit unions and
unregistered annuity products.
Charles also said the local financial sector
"is not necessarily limited, but not enough is
done by the various institutions to promote
how their current savings and investment
products can be then used as the vehicle for
facilitating the accumulation of funds for ter-
The question remains, therefore, how do
parents plan for their children's financial future
with only these tools at their disposal?
"I always tell people, children aren't born
at 18 years old. It didn't happen overnight."
He said the best time to start the financial
planning for a child's university education was
either at birth, or even before the child was
Fletcher said: "From the time they know
they are having a child, they should start saving
for their child's education. That will give you
the longest possible savings period. People
wait until the childred go to secondary school
and only then start to think about tertiary
education. Some of them, because they are
not sure as to what field or endeavour the
child may want to pursue think that it is okay
to postpone it until later and then it really
becomes burdensome with the shortened peri-
Williams illustrates with an example from
his own life. He said he took out two generic
Clico Life Advantage policies, which paid inter-
est rates of between eight and 10 per cent at
"I think about when my daughter and my
son were ready for university. I had started
the policies for them, pretty much the day
they were born. At that start, I could only
afford $125 a month. But as they got older and
my fortunes changed, I was able to put $1,000,
$2,000 each and so on. And in 2009, when
my daughter was ready to enter university in
the US, I was able to pay her first two years
of tuition from those policies that I started
with as little as $125 a month."
For those experiencing unease at the thought
of taking out an insurance policy on their
child, Fletcher said: " People do not buy insur-
ance on their children to provide a death ben-
efit. The parent is not dependent on the child,
but the child is dependent on the parent. The
main reason people buy insurance for their
children is to help create that education fund
and give them that start in life."
But another reason to start early is that it
can mean the difference between retiring in
comfort and struggling through your golden
years. Let's say for example, you are 30 when
you have your first child, it means that you
will be 48 when your child is turning 18 and
ready to enter university. The situation is com-
pounded if you have more than one child.
Williams told the Sunday BG that at an age
when workers are supposed to be maximising
The ABC's of Education
Continues on page 5
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