# Investment Goal Calculator With Lumpsum and SIP

This Investment Goal Calculator is one of my favourite calculators. I use similar calculator in my practice of financial planning for my clients as a CERTIFIED FINANCIAL PLANNERCM. The Investment Goal Calculator below can be used for planning investments towards any goal like Children Education, Retirement etc., One can plan their investments either with 1) Only Lumpsum Amount  2) Part of Lumpsum amount and the remaining deficient amount through monthly SIP or 3) Only with monthly SIP without any initial amount.

## How to use Investment Goal Calculator

This calculator can be used for any Goal based investment strategies.  For simplicity, this is limited to planning for any single goal.  Most people have vague goals as far as investments are considered.  Almost every one has goals for their children like education, marriage and for self like own house, retirement etc.,  But all these goals are usually not quantified.  Goals can be achieved reliably only if they are quantified and if progress can be monitored over a period of time.

To use this investment goal calculator, one should be aware of how much their goals cost in today’s price.  This must be the cost of that if that goal has to be achieved today.  For example, one can easily find out how much it costs to study Engineering, Medicine etc in their choice of college.  As the cost of the goal increases every year, one must understand how much it is increasing annually.  If not certain about this one can use the rate of inflation.

The most important thing in achieving one’s financial goals is to give enough time for their investments to benefit from power of compound growth.  If investments are planned well in advance, one can easily attain the goal with considerably less investment amount by investing in right asset class.  Enter how far is your goal in years.  For example if you are planning to join your just born baby in medicine, then the investments should be for around 17-18 years.  Similarly, if the goal is to save enough money for retirement corpus, then the time is the number of years for retirement.

The most crucial input might be entering expected return from investments in the goal investment calculator.  Above 3 inputs namely, goal amount, rise in cost per year and number of years from goal can be entered with more certainty.  But entering expected return is more uncertain.  But one can take a clue from historic returns from different asset classes.  For equities one can choose over a range of 15-18%.

Returns from investing in different Asset Classes in last 36 Years.

Fixed Deposits gave a return of 8.41%.

Returns from investing in Gold is 10.25%.

Investments in Sensex gave returns of 16.93%.   All returns are CAGR.

One should choose their investment asset allocation properly to achieve their goals.  If one has enough time for investments, major portion can be allocated to equities as over a period of time, equities are proven to gave higher returns.

Once the above 4 inputs are given, it calculates how much your goals cost at the time of fulfillment and suggest the lumpsum initial investment to be made to reach the goal.  Normally, what is seen is most people’s long term goals require huge corpus and all can not afford to finance them at one go.  So one can select the initial amount they can commit now and the calculator calculates deficient amount and suggests the monthly SIP (Systematic Investment Planning) required to reach it.  If one wishes to reach the goal just with SIP, then enter lumpusm amount as zero in the investment goal calculator.

I wish to place special emphasis on the importance of starting any investments right NOW.  Most people just procrastinate.  Mostly this happens as goals are not in near term and not compelling.  The cost of delay in start investing can be huge.  See for yourself by entering the delay to start investment in months.  You will understand how costly it can be even a delay of 6 months.  I have included this delay cost calculator in the goal investment calculator for properly understanding the importance of starting investments without any delay.

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