With financial planning, you can achieve your life goals. It is a process through which you build a secure future by defining and quantifying financial goals and devising an investment plan to meet them. Throughout your life, financial planning will guide you to make a clear and conscious decision regarding any financial investment for lifelong security.
Good financial planning calls for setting time-bound goals, asset allocations, risk diversification, and investments. With an investment calculator, you can efficiently plan your investments and achieve your goals.
What is an investment calculator?
An investment calculator is a software tool that enables you to make a proper investment decision depending on the investment you are interested in to attain your financial goals. The multifunctional tool allows you to enter specific values in the fields provided. The investment calculator helps you estimate the final amount of your investment and returns within seconds. With it, you can quickly arrive at the expected initial balance, periodic investments, and rate of return to attain your financial goal.
Using the investment goal calculator, you can easily find the ROI on different kinds of investments like debt, equity, deposits, and so on. Besides, you can evaluate how long it will take for a specific investment to reach a pre-determined balance. The result depends on the factors like the investment type, expected return on the investment, and duration.
How to use an online investment calculator?
The online monthly investment calculator is a user-friendly tool with several parameters and features. It gives you insights into the investment structure and the amount you intend to invest for attaining your time-bound financial goals. To know if your goal is achievable with your present investments:
Step 1: Enter your investment goal (Preferred future value)
You need to fill in the exact amount you plan to invest every month here. Considering the income, you can decide on the amount.
Step 2: Enter your present investments
If you are making investments now or have any existing savings, you need to enter the value of those investments or savings. They will be considered when assessing the value of your wealth.
Step 3: Enter your expected returns
There are two fields in which you have to enter the number of years you would need to achieve the goal and the expected returns on your investment. You can determine the duration of the investment depending on whether it is a short-term or long-term goal. A short-term goal is of a time period from 1-3 years, while the long-term goal ranges from 5-10 years.
As for the expected rate of returns on investments (ROI), you can study the past and present market cycles and decide. The ROI may change depending on the changing market conditions.
Once you have filled in the details in the given fields, the investment calculator will generate the amount you have to invest every month for a certain period to reach your financial goal.
With the monthly investment calculator, you will have great insights into how much you should set aside as savings after expenses to attain your long-term or short-term financial goal. It will also help you track your expenses and cut down the unnecessary ones.