Education Planning Case Study


Alan & Karen Lim, Kuala Lumpur

alan and karen limAlan & Karen have two bright young children aged 7 and 11, both are attending international schools in Malaysia. Like all parents, they wish their children to have the best possible education their finances will allow. They currently pay school fees from their salaried incomes as and when required. The cost of education fees are accounting for a considerable percentage of their income. Mr & Mrs Lim are very aware that these costs will increase substantially once their children reach university.

Their objective is to provide a UK university education
Ideally they would like to send their children to university in the United Kingdom as the UK is recognised worldwide for it’s high standards of education. A quality overseas education commands a high price. Fees are higher, rented accommodation is more expensive and the cost of living in general is much higher than Malaysia.

How can they reduce the cost effectively?
Alan & Karen are both professional people, they are used to setting budgets and forward thinking, but how were they going to manage their personal finance effectively and efficiently? How could they maximize their current income and actually reduce the overall costs? Mr & Mrs Lim knew they had to seek professional help from experienced people who deal with EDU financial planning on a daily basis.

“Our best friends highly recommended Montpelier”
Karen Lim

Alan and Karen contacted Montpelier on the recommendation of their best friends who had faced similar situation previously.

As with every Montpelier client it was important to sit down with Alan and Karen and take a holistic approach to their situation. Everything of course is discussed in the strictest of confidence and discretion.

The process began with an honest and open conversation regarding their current financial status. It’s important for our advisors to fully understand our clients goals and objectives enabling us to perform a comprehensive analysis of their situation.

“We found the entire process very pleasant, Montpelier’s advisor explained everything clearly and it was very easy for us to understand.”
Alan Lim

alan karenWe first looked at their final objectives, the overall costs of UK University fees, living expenses and accommodation for their children. How much would this actually be taking into account inflation and projected market trends? Would it be an astute decision to buy a property for their children to stay in rather than rent? Could letting a property contribute towards their education fees? Did they have current savings that could provide higher returns invested in an EDU account? Would an offshore account invested in GBP, USD, AUD or SGD provides tax free returns and be a preferred option?

Montpelier created a ‘priority list’ of Mr and Mrs Lim requirements which included:

  • What is an affordable but realistic monthly sum to save?
  • Did they require flexibility to cover any unforeseen financial expenses that they may face in the future?
  • What was their attitude to risk versus return?
  • Would they prefer their savings in GBP or USD which would act as a hedge against possible future currency movements?

Montpelier were able to create a single savings account for both children. The account enables them to draw down finance for education fees whilst still maintaining their monthly contributions and increasing the overall fund with regular interest accrued. The interest gained will contribute significantly to education costs and the final monthly contribution will be made several years before their last child leaves university. They are now very comfortable with the knowledge their children’s education fees are taken care of in the most efficient way, relieving stress and worry and knowing there will be sufficient funds in their account long before their last child graduates.

“It really is a great feeling knowing that our children’s education is secure. We can now put that worry behind us.”
Karen Lim

Alan also decided to buy a UK property near the University they intended to send their children. This has brought them instant revenue through rental that covers the mortgage costs. When the time comes for their children to attend university they will be able to live in this property for a fraction of the cost of rental. They then have the option of selling the property and reaping the rewards of their investment or continue to let the property for continued income.

“The property Montpelier found for us is ideal. It’s in a brand new development and has already increased in value by 20%.”
Alan Lim

Mr and Mrs Lim are reaping the rewards of planning early. They have given themselves time to maximize the returns on their investments whilst maintaining a comfortable lifestyle.

Would you like to reduce the cost of Education for your children?

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