Only if you could earn money with meagre efforts.
Do you wish the same? Do you wonder if you could multiply your money and build the savings fund of your dreams? If yes, you are not alone.
Turns out, there is a way you can multiply your wealth and grow your money without making any significant physical effort. The secret is investing. Let us just face it; you cannot manage your finances on a paycheque; you need financial security for the future to attain your goals. This is where investing can profit you. It helps you reach your goals faster.
So, if you are thinking of building your investment portfolio, it is suggested that you use an investment calculator. Here is why.
Table of Contents
Why Use an Investment Calculator?
An investment calculator is an online tool that calculates the investment value at the end of the investment tenure. In addition, it can also be used to calculate what your initial balance, regular contribution, or return rate should be to reach your expected maturity amount. In addition, you can also calculate the time required for a specific investment to get your ideal amount at maturity.
You can use the investment calculator to compare the returns of multiple investment plans to make a decision. It will help you understand how a particular investment will grow over time. In case you like to know the amount you have to invest today to reach a set target in the coming years, an investment calculator can be of great help. The calculator will also break down the returns you are getting for you to have a clear picture of what to expect in a year 5 or 10. With the support of an investment calculator, you can easily plan your future expenditure, investment and savings.
Thus, putting it simply,
1. An Investment Calculator Can Help you Ascertain the Growth Avenue of an Investment:
Here is a piece of truth. We all invest to earn profitable returns from our investments. Earning returns that do not align with our expectations is a big no for us. But returns aren’t always guaranteed when we are investing in market instruments. However, we can still check if they are profitable with the help of an investment calculator. An investment calculator can be used to check the growth prospects of a particular investment plan. Accordingly, you can decide if the particular investment option should be your choice.
2. Helps you Compare Multiple Investment Plans:
There are lots of options to invest, but how would you decide which would be the best investment plan in India for you? The answer is simple – an investment calculator. You can compare the multiple investment options on the basis of returns. The returns can be estimated by an investment calculator. On the basis of these returns, you can ascertain which investment plan would be the right option for you.
In addition to returns, it is also advisable to consider other parameters while deciding the best investment plan in India for you. These parameters can be the lock-in period and investment flexibility.
Also, do consider your risk appetite. You would not want to take risks you cannot afford to. For instance, if you consider yourself a risk-conservative investor, consider guaranteed income plans for the sake of investment security.
3. You Can Determine the Investment Amount and Investment Tenure:
An investment calculator should be a pre-requisite. In other words, you must use it before investing rather than after. This is because an investment calculator can help you head in the right direction. You can decide the investment amount and investment tenure beforehand by taking the help of the investment calculator.
Let us take an example to understand how.
You are planning to invest in SIP and wish to earn INR 5,00,000 on top of your invested amount. You can use the investment calculator and put any random number in the investment amount field and tenure to check if the returns are what you are hoping for. If the maturity amount turns out to be short of your expectations, you can increase the investment amount or tenure to reach your goals.
Final Thoughts
An investment calculator should be your go-to tool to use when you are building an investment portfolio. It’s free to use; you just have to enter the values, and the tool will give you the estimate in a matter of seconds.
However, you must note that the returns shown by the calculator might not align with the actual returns if you are investing in market-linked investment plans such as mutual funds. They are subject to risks and can never be estimated accurately.
