Investment is an act of faith, is an oft-repeated saying around the world. It is also an act of arithmetic. Nothing exemplifies this truism more effectively than the SIP (Systematic Investment Plan) Goal Calculator in mutual funds.
Choose your goal and time period
The Goal SIP calculator is a type of calculator that guides you chart your course of investment once you set a financial goal for yourself. The calculator computes how can you break down your investments into stream of small regular amounts that you can follow throughout a given period of time.
You also choose this period of time for your own convenience.
It is due to this convenience factor that mutual funds are becoming popular so fast.
How to plan for Rs 1 crore in 15 years
Take a concrete example. Say, you desire to build a corpus of Rs 1 crore. And you want to achieve it in 15 years.
These are the two parameters that you as an investor would set and let the calculator make projections for you.
Say if you want a 12% annual return on your investments then the calculator will tell you in a fraction of a second that you have to invest Rs 20,016 every month in SIPs.
Extend the period for smaller SIP amount
If that amount is too big for your level of comfort and income-expenditure mathematics, then you can extend the period beyond 15 years.
For example, if you want to invest over 20 years, the SIP amount would decline sharply to Rs 10,108 or just half of what you would pay if the term chosen is 15 years.
Build Rs 3 crore corpus
Now let’s raise the goal to Rs 3 crore. If you want to build it in 20 years, you would need to put in Rs 30,325 every month (considering the same rate of return).
And trying to build a Rs 3 crore pool in 25 years would require you to invest Rs 15,967 in monthly SIP.
Buy a luxury car after 10 years
Let’s set another goal. Say, you want to buy a luxury car after 10 years and about Rs 50 lakh is what you aim to make.
The Goal SIP calculator will tell you that investing Rs 21,735 a month would let you coast to your goal.
Therefore, this calculator can help you calculate any target that you want to achieve in life and tell you the quantum of investments you would need to make.
(Disclaimer: This article is only meant to provide information. News9live.com does not recommend buying or selling shares or subscriptions of any IPO and Mutual Funds.)
The SIP calculator is nothing less than a boon in a common man’s life. The Goal SIP calculator, a special type of calculator, is a powerful tool in this regard. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
