Why should I invest?
In order to build wealth, you have to invest your money. Investing allows you to put your money into different assets that have the potential to earn a strong rate of return.
If you don’t invest, you are missing out on the opportunity to increase your financial wealth. Of course, you have the potential to lose your money in investments, but if you invest wisely, the potential to gain money is higher than staying as never invested.
Here are the four reasons to invest your money:
- Grow your money.
- Earn higher returns.
- Reach financial goals.
- Save for retirement.
How much money do you need to invest?
Everyone has a perception that to make money in the stock market, one should start with big money, but this convection is wrong. You don't need to have a hefty trust fund or ultradeep pockets like mutual funds and other institutional players to start investing. If you're a typical working person or a beginning investor, you can begin with as little as Rs.500 (for Demat account) and add to it as you earn and save more money. What's more important is, how you pick best and quality stocks rather than the amount you invest.
What is time horizon or investment horizon?
A time horizon or investment horizon is the total duration of time a security is expected to be held by an investor. Setting a time horizon for any investment usually has to do with the goals and aims of the investor. Time horizon types vary from short-term to long-term. Some investors set a longer investment horizon because they have more time to keep their portfolio invested and realize profits or offset the losses incurred. For example, the time horizon for a 30-year-old saving for retirement might be 35 years, whereas it might be only 15 years for a 60-year-old who started saving late in life.
Why should one consider Inflation in calculating the rate of return?
Inflation is the aggregate level at which prices for goods and services are increasing. The required rate of return must be layered on top of the expected inflation rate because inflation reduces the value of savings. Thus, a high expected inflation rate will drastically increase the expected rate of return, and low expected inflation will decrease the expected rate of return.
How does Time-Duration calculator work for SIP?
One can easily check the required time period to reach the targeted wealth with periodic investment at a required rate of return. The variables involved in Investment planner are
- Targeted wealth.
- Periodic investment amount.
- Expected rate of return.
- Tenure (monthly or yearly).
Steps to calculate the required time period through time duration calculator:
- STEP 1: First select tenure, i.e., yearly or monthly
- STEP 2: Fill the targeted amount you want to achieve in the future.
- STEP 3: After this, enter the investment amount, i.e., your investment right now.
- STEP 4: Enter the expected rate of return, which states at what rate your investment want to grow further.
Once done with all four steps, press the CALCULATE button where you will be getting the required time duration for your targeted wealth.