There is no shortage of financial calculators available on the Internet, and novice investors are sometimes puzzled by the myriad of calculator links that appear for a simple search query such as “goal sip calculator” or “goal calculator.” So how do you choose the calculator that accurately provides an answer 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 financial planning queries. But here is a list of the basic calculators that everyone should try because they will help you understand the need for a financial plan in the first place and how you should get started to achieve your goal. financial goals in the life.
- Inflation calculator
- SIP target calculator
- SIP calculator
This calculator will help you check reality in life. If you think you are doing well in life, have a steady source of income that gives you a decent lifestyle while still managing to save a little, then this calculator will bring you some surprises. The inflation calculator helps you find the amount you will need in the future to cover your current expenses or how much an expense will cost, for example Rs. X today after certain no. of years. Historical data shows that the inflation rate averaged 7.7% in our country during the period from 1969 to 2013. Now you can imagine how inflation can affect your savings in a significant way. So you need a smart investment plan to beat inflation in the long run. Let’s take an example to simplify it. Suppose you want to buy an SUV 4 years later that costs 10 lakhs today. You will need 12.16 lakhs to buy the same SUV after 4 years if inflation averages 5% during this period. Actual inflation could turn out higher than our assumption, in which case you will need more than 12.16 lakhs. For example, if inflation turns out to be 6% instead of 5%, you will need 12.62 lakhs for the car.
This calculator is the next one to try once you’ve calculated how much your future spending requires 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 on board after a few years. The Goal SIP calculator helps you calculate the monthly amount of SIP you need to invest in a mutual fund over the goal horizon so you can easily cover future expenses when it expires. You need to put in the future value of your goal, the period of time over which this goal should be reached, and the rate of return you expect your investment to give you. Don’t forget to add the inflation rate to your expected return; otherwise, you will find yourself in a huge deficit when you need to meet the goal. In our example, our SUV would require 12.16 lakhs four years from now with 5% inflation. Therefore, you can set the target amount as 12.16 lakhs, the time period as 4 years, and the expected return as 15%, which includes 5% inflation. The expected return is your expectations of the investment you are making and will vary for each person. If you are investing with a conservative approach in a balanced fund or a fixed income fund, you should lower your expected return compared to your expectation of a stock mutual fund. The calculator gives you a monthly SIP amount of Rs. 18,642 in our example. This is the amount you need to invest in a mutual fund through the monthly SIP where you expect to get a 15% annual return.
If you are one of those smart investors who have already started planning your life goals and have some SIPs in place, this calculator is for you. It will tell you the future value of your SIPs and you can compare it to what the inflation calculator gives you. If the future value of your SIP turns out to be more than what the inflation calculator gave you for the same goal, you are really smart! But if the future value given by the SIP calculator turns out to be lower than what the inflation calculator shows, you really need to increase your SIP now, otherwise you will be facing a deficit when it is time to meet your goal.
