One can attain his/her life goals with effective financial planning. It involves defining achievable financial goals and objectives and then planning your portfolio, which helps you achieve them. Financial planning is a continuous process as you might have to change your plans and devise different investment portfolios when your requirements change.

While setting your goals, the most important thing you need to consider is to quantify them. In other words, set measurable goals, which can help you keep track of your progress. Moreover, this will also help you make calculated judgments while you invest. With an investment calculator, you can help yourself make more accurate decisions. 

Know What an Investment Calculator is

An investment calculator is a tool that lets you calculate the money or returns you will get after a specified period with which you can make appropriate decisions. It will help gauge your investment portfolio and help you make adjustments for an effective financial plan. 

With proper goal setting, all you have to do is enter the desired amount you wish to invest, the period of investment, and the expected returns. Using the specified values, the calculator will calculate the amount you will receive within seconds.

Apart from letting you calculate the amount you will get, you can also specify the money you expect to get along with the rate of returns for the investment period. It will help you calculate the money you have to invest now. You can also calculate the return on investment for equities, debts, deposits, bonds, personal budget, etc.  

Steps to Use an Online Investment Calculator

Using an investment calculator, you can calculate both monthly investment plans. The tool lets you get a rough idea about the amount and the structure of the plan you need to opt for to achieve your financial goal. The steps that you need to follow to get the desired output are:  

Step 1: Enter the Preferred Future Amount

First, you need to fill in the expected amount of money you wish to receive, otherwise known as your financial goal, in the specified column. 

Step 2: Enter Any Investments You Currently Have

Next, you need to enter any investments that you currently have. The tool considers these investments to calculate the amount you need to invest. If you have none, then leave it at zero and proceed further.

Step 3: Enter the Period of Investment and the Rate of Returns

In this step, you have to fill in two fields, one being the number of years of investment and the other the expected rate of investment returns. While investing, you need to consider the period of investment and whether you need to invest for the long-term or short-term. Long-term investments span from 5 to 10 years and short-term investments from 1 to 3 years. Depending on your requirement, you need to choose between long or short-term plans. 

The expected rate of return means the rate of return you expect the investment to make every year. It has to be filled based on past and present market conditions and your prior experiences.

After filling in all the specified information, the tool automatically calculates the amount you need to invest every month to achieve your financial goal.You can now have your financial plan with an investment calculator online and grow your investment capital.

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