Beginner investors starting their investment journey of investing in stock market securities and mutual funds feel overwhelmed and confused with the idea of investing in equal installments or lump sum. To make an informed decision, investors can take the help of a SIP calculator and lump sum calculator. Making calculations easier, SIP and lump sum investment calculators can help investors compare the returns from both investment options and select the best. Here are 5 detailed case studies related to sip and lump sum Investment calculators that can help investors immensely:
1. SIP Investment:
Rekha plans to create a corpus of ₹25 lakhs over 15 years. Through SIP investment in a mutual fund. With projected 12% returns and through consistent investment of ₹5500, Rekha can build a portfolio that offers considerable returns and create a corpus that she can use to meet her financial goals. SIP calculators can help investors identify the right SIP amount which they can Invest monthly, half-yearly, and even yearly depending upon one’s choices and financial needs. With clear financial goals like the creation of a financial sum after a significant period like 15 years, the Sip calculator can make calculations easier and help break down investments into consistent and regular investment options for easy investing and benefits like rupee cost averaging.
2. Rakesh Lump Sum Investment:
Rakesh received a sum of ₹10 lakhs from selling his ancestral home. Being a regularly paid worker with significant investments and savings, Rakesh wants to make the best use of ₹10 lakhs. Using a lump sum calculator, Rakesh can calculate the total returns he can generate at approximately ₹10% returns through investment in a single investment avenue like Mutual funds.
3. SIP vs Lump Sum:
Preeti had ₹2 lakhs as savings and wanted to invest the same in a mutual fund scheme for better returns. However, she was confused about whether to use SIP or opt for a lump investment. Using a SIP calculator and providing various details like 12% expected return, 10 years of investment, and a SIP amount of ₹2000 per month, Preeti could earn ₹4.64 lakhs. On the other hand, the lump sum Calculator showed how she will earn ₹6.21 lakhs including the original sum of ₹2 lakhs through a one-time investment of ₹2 lakhs. Despite better returns, Preeti selected SIP to ensure better cash flow and to get the benefits of cost averaging. She could also use the remaining amount after payment of one installment thereby allowing her to make the best use of savings.
4. Using SIP and lump Sum Investment Together:
A married couple wished to buy a house. With an SIP calculator, they received information as to how with investment of ₹21,000 per month at 12% returns, they can achieve their target of ₹50 lakhs. With a lump sum calculator, a one time investment of ₹16.1 lakhs can help achieve the required amount. Therefore, they decide to use both SIPs and lump sum Investment for wealth creation: investing ₹8 lakhs as a lump sum and Investing ₹10,000 monthly.
5. Access to Accurate Details:
A salaried employee wanted to invest ₹5 lakhs to earn returns for his future retirement. Using a lump sum calculator, he identified with a single one-time investment, returns of ₹10.5 lakhs can be generated at a 10% expected rate after 12 years. Sufficient for his retirement, he opted for a lump sum investment to reduce hassle.
Conclusion:
The case studies show how Investors can decide between SIP and lump sum investment for their future goals. Using SIP and lump sum calculators, they can receive accurate information and make decisions regarding their investment journey.
