Ever wonder! how much you need to invest to get your Dream Returns. There are many online tools or calculators to calculate investment return on your SIP or investment. But, with those tools you can not calculate beyond 15% return for the long term. And today, I’m sharing a powerful tool to help you do the same: a DIY SIP calculator! By using it, you can calculate your returns any time using excel sheets.
What is SIP?
Before going directly on creating a SIP calculator, let’s discuss the meaning of SIP. SIP is Systematic Investment Planning, which means how much you invest your savings every month systematically in the stock market or mutual funds. Usually, the term – “SIP” is related to mutual fund investment.
Is it simple? Yes, just save and invest in the stock market or mutual funds. But, selecting the right stock and proper mutual funds for the long term is also important and that’s a different topic which will be discussed on our blog – finbloom.in so do subscribe.
But why do you need to do mutual fund investment through SIP? The answer is simple. You want to beat the inflation that is 6-7% and in a savings account you get only 3-3.5% and Fixed deposit, you get maximum 7-8%, whereas, a good mutual fund for long term can give you around 15% return easily.
Building Your Excel Calculator
While making every investment, we, middle class people, think about how much return or money we can get in the future from our investment. You must have sometimes used an online SIP return calculator to get the return on your investment.
So in this post, I will teach you to make your own calculator tool in excel, so that you do not have to search online again and again. So read this post completely so that you can understand it easily.
o let us know – how you can make a SIP calculator in excel.
Here, We divide SIP into 2 – if you want to invest monthly or yearly means once a year.
“=FV(rate/12, nper*12, -monthly_investment, 0, 1)” (If you invest monthly then use this formula)
“=FV(rate, nper, -annual-investment, 0, 1)” (If you invest annually then use this formula)
At this – “rate”, you enter what you are expecting. Enter it with a percentage. Like 20% or 30% and divide because we have to invest monthly.
“nper”- In this you have to enter the number for the number of years you want to invest, and multiply it by 12 because we want to invest monthly.
Then, you will have to enter the “amount” that you want to invest every month with a minus sign, as we are investing.
Then we have to keep “0” as the next value because we have to calculate how much money we will get in future. And “1” because we want to compound our investment.
Example – “=FV(25%/12, 10*12, -30000, 0, 1)” and the answer will be – ₹ 1,59,84,139.92
I have made one more step easy for you. Download a pre-made SIP calculator in excel- you can download it from here and use it freely.-(Download)
You can save this calculator in your computer or phone and whenever you want to know the return on investment, you can simply open excel and enter some values to check whether the return will be good or not.
Conclusion
Disclaimer – you can always calculate an expected return, the future is never fixed, so no one can guarantee the investment. This calculator can only give you an approximate figure.
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