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There is no dearth of financial calculators on the internet and sometimes novice investors get baffled by the number of calculator links that come up for a simple search query like ‘goal sip calculator’ or ‘goal calculator’. How then can one choose a calculator that will accurately provide answers to what the investor was looking for in the first place?
There are many calculators available on the internet that can help you find answers to some of your questions. Financial Planning Question. But here is a list of basic must-have calculators that everyone must try as they will help you understand the need for a financial plan in the first place and how you should start working towards your goal. financial goals In life.
- inflation calculator
- Target SIP Calculator
- sip calculator
This calculator will help you do some reality checks in life. If you think you are doing well in life, have a steady source of income that allows you a decent lifestyle, while you still manage to save a little, then this calculator is going to give some surprises . Inflation calculator helps you to find out the amount required in future to meet your current expenses or how much rupees the expenditure will cost. X costs you today after a certain number of days. of years Historical data shows that the rate of inflation in our country for the period from 1969 to 2013 has been 7.7% on an average. Now you can imagine how inflation can affect your savings in a big way. Hence, to beat inflation in the long run, you need a smart investment plan. To make it simple for you let us take an example. Suppose you want to buy an SUV after 4 years which costs Rs 10 lakh today. If inflation averages 5% during this period, you would need 12.16 lakhs to buy the same SUV after 4 years. Actual inflation may be higher than our assumption, in which case you will need more than 12.16 lakhs. For example, if inflation becomes 6% instead of 5%, you will need 12.62 lakhs for the car.
This is the next calculator you should try once you have figured out how much your future spending needs to be for a particular goal after adjusting for inflation. It could be an SUV for you or a medical degree for your teenage daughter or just a family vacation after a few years. Target SIP calculator helps you calculate the monthly SIP amount you need to invest in mutual funds over a target horizon so that you can meet future expenses easily. You have to enter the future value of your goal, the time period over which this goal needs to be achieved and the rate of return you expect to get from your investment. Don’t forget to add the inflation rate to your expected return otherwise you will face a huge shortfall when you need to meet the target. In our example, our SUV will require 12.16 lakhs at 5% inflation four years from now. Thus, you can set the target amount as 12.16 lakhs, the time period as 4 years and the expected return as 15% including 5% inflation. Expected returns are your expectations from the investment you are making and will differ from person to person. If you are investing in a balanced fund or fixed income fund with a conservative approach, you should expect lower expected returns as compared to what you would expect from equity mutual funds. The calculator gives you the monthly SIP amount of Rs. 18,642 in our example. This is the amount you need to invest in mutual funds through monthly SIPs where you expect 15% annual returns.
If you are one of those smart investors who have already started planning for your life goals and have also done some SIPs, then this calculator is for you. This will tell you the future value of your SIP and you can compare it with the inflation calculator. If the future value of your SIP is higher than the value given by the inflation calculator for the same goal, then you are really smart! But if the future value given by the SIP calculator turns out to be less than the inflation calculator, then you really need to increase your SIP, else you will feel shortchanged when the time comes to meet your goal.
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