It is crucial to start planning your finances at an early age to meet your life goals at various stages of life. It is a step-by-step process that helps you secure your financial future and that of your loved ones. The financial plan is like a guidebook that can help you choose the best investment options at the right time.
Your financial liabilities may include anything from paying up your credit card or your child’s education fees. But to be able to cater to these liabilities, you need to have a robust financial plan that helps you control your expenses, grow your wealth, and also plan your investments wisely. You can do all that with the help of an Investment calculator as well.
If you want to be financially secure and always have access to funds to fulfil your goals at the right time, you need to have an investment plan. That is where a savings calculator and an investment calculator come into play.
In this article, we will tell you everything there is to know about an investment calculator and how you can use it to expand your finances. But first, let us understand the basics.
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What Is An Investment Calculator?
An investment calculator is a free online tool that is used to calculate the estimated growth of your preferred investments in the near future. The savings calculator is used in conjunction with the investments calculator to determine the amount of money they need to reach their financial goals and use that knowledge to choose the right investment options.
How To Use The Investment Calculator?
Investments are not only beneficial for future financial gains but also offers income tax benefits. An investment calculator determines the exact amount of investments you need to get a specific rate of return.
You can enter all the necessary details into the investment calculator to get the value of other variables corresponding to an investment plan. This knowledge will help you choose whether you should invest in this plan or not. Here are the important details that you need to enter into an investments calculator to know its profitability. It is applicable to types of investments.
– Rate of return
The most important consideration for any investor is the rate of return for their investment. How much you are going to earn over the years against the sum you invested in a plan will play a huge role in deciding whether you should invest in it or not. It would be best if you compare all your potential financial investments based on the rate of return. This comparison will help you make an objective decision about your investments.
– Principal
This is the amount that you are required to pay in order to initiate the investment plan. Needless to say, a large investment amount will attract a large return in the long run. If you have financial goals like saving for a car, home, gold, etc., consider starting with a higher amount.
– Maturity amount
This is the amount you finally receive after your investment period ends or the policy matures. If you have paid your premiums/payments regularly throughout the investment period, you stand to gain a huge profit at the end.
– Investment duration
This is the duration for which you want to invest.
Benefits of Financial Planning
There are many reasons why you need to consider financial planning, if you haven’t done that already. However, here are the main reasons why you need to start doing it now:
– Increase your savings
The investments calculator is designed to find the most efficient way to invest your money to increase your wealth and savings over a period of time. The calculator considers all the variables before giving you its results. You can use this calculator to plan your finances properly to get the highest return from your investments.
– Prepares for contingency
Several investment options, such as ULIP, allow you to make partial withdrawals in the hour of your need. Such features and benefits of certain investment plans can hedge your risk against contingencies and give you quick access to funds when you need them the most. An investment calculator can help you pick such instruments based on your income, lifestyle, and financial goals.
Financial planning is an important activity that one needs to carry out in their lives to lead a financially independent life. Don’t forget to use tools like an investment calculator to find the best investment options that will allow you to reach your financial goals in a practical and sustainable way.
