Ultimate Guide to Using an Investment Calculator: If your goal is to build a sizeable corpus that you and your family can depend on for financial needs, then you know an investment is pivotal. We are living in an age of inflation where everything is getting expensive and new expenses are coming up the horizon. There’s no way you can refrain from investing given the fact that investment can double or triple your money over a period of time. Therefore, the role of investment in financial planning is significant.
Doesn’t matter if you are a new or an expert investor, it’s natural to be confused regarding how much to invest. This is where an investment calculator comes in.
What is an Investment Calculator and What Does it Do?
Investors can calculate their combined wealth in taxable as well as non-taxable accounts using an online investment calculator. It can be used to predict their future net worth based on current inputs.
An Individual can also use an online investment calculator to evaluate the potential return and assess the viability of their investment strategy. For instance, one can start by testing how a small amount of capital would grow over time using any investment calculator available in India.
Basic Learning of Investment Calculator
Investors can benefit from using an online investment calculator. If an account holder is new to financial planning, the best place to start is by learning the usage of an investment calculator.
Here are a few tips you can use before using an investment calculator.
- Make sure you are aware of investment objectives before searching for a financial calculator.
- Calculators that use compound interest will come in very handy if the investor is trying to accumulate wealth as well as save for retirement.
- Calculators for compound interest allow you to see how much a lump sum of cash will increase over time if it is invested at a predetermined return.
- An online financial calculator offers a variety of options for establishing investment objectives, making it simple for investors with various needs and concerns to use these helpful tools.
- A ULIP calculator would be helpful if you are investing in a ULIP plan.
Tools Used For Investment Calculation and Their Types
Doesn’t matter if you are investing in the best saving schemes in India for easy saving, an investment calculator can come in handy to decide how much to invest to meet your financial goals.
Having said that, five different financial calculator tools are available to the public:
- A calculator for one-time investments.
- A calculator for monthly or quarterly savings.
- A calculator for compound interest.
- An easy calculator for long-term investments.
- Calculators for specific investments.
Some of the properties of each tool calculator are described as follows:
- The best way to determine how much funding will be in one’s retirement account if individuals have a lump sum of cash to invest is to use a lump sum equity calculator. This will determine how much funding will be in one account at retirement depending on multiple variables like an individual’s current age and the requested annual return rate.
- The amount of money an individual needs to save each quarter to reach your goal by a certain date can be determined using a quarterly savings calculator if individuals are interested in investing quarterly.
- If individuals are curious about what occurs over time when funds compound or grow as a result of reinvested dividends or earnings, they can use a compound interest calculator. You can enter information into this calculator regarding your initial investment, the interest rate earned, the amount invested over time, etc.
- Based on their objectives and levels of risk tolerance, investors can use a straightforward online investment strategy calculator to choose the best course of action for long-term investments.
- As certain investment plans give different returns, there are distinct online calculators available for such plans. One of the most common examples is a ULIP calculator specifically made for ULIP plans. ULIP plans are regarded as one of the finest financial instruments because they provide the dual advantage of insurance as well as investment. When using the ULIP calculator, insurance buyers should have key information on hand, such as the frequency of premium payments, the types of funds, the desired investment amount, and the anticipated rate of return on investment.
When determining how much money to invest in stocks, bonds, and other financial instruments, the financial calculator is one of the investor’s best friends. This will guide an investor on how to use a long-term investment calculator, an investment calculator for India, and even a compound interest calculator to make informed investment choices that are in line with the investor’s specific financial objectives.
Final Thoughts:
By now we have established that investment is crucial to ensure a strong financial position in the future. An investment calculator can be of huge help if you have trouble deciding where to invest and how much to invest.
Having said that, even if you are investing in India’s best investment plans or in securities, it’s crucial to know the do’s and don’ts of investing if you wish your investment to be safe as well as high yielding.