Several kinds of investors exist today. With a range of investment instruments and products to choose from, investors with distinct financial goals can explore avenues of investment that prove to be satisfactory to suit their unique needs. For instance, if you are looking at long-term investment, you may consider blue chip stocks that tide over market volatility and downturns and give you returns in the long run.
In case you want a regular income from your investments, you can choose an SWP or a Systematic Withdrawal Plan. This is an investment scheme that gives individuals a regular income source with returns that can be accumulated in the scheme. Furthermore, before you sign up for an SWP, you can make use of an SWP mutual fund calculator to determine the extent of your returns on investment.
What is a Systematic Withdrawal Plan?
Investors who wish to have a regular source of income while investing their money simultaneously can opt for an SWP. Investors are permitted to withdraw a variable or fixed amount of money on a predetermined date each month, each quarter, or each year. Your Systematic Withdrawal Plan can be customizable so you can have cash flows the way you want them – either the capital gains on your investment or a fixed sum. With an illustrative example, you will find out how an SWP mutual fund calculator can help with your investment activity. For instance, if you have invested in 8,000 units of a mutual fund, you can give your fund house a set of instructions to let you withdraw Rs. 5,000 each month through the mode of a Systematic Withdrawal Plan. Now let’s say that during the first month of your investment, the NAV or net asset value of the fund was Rs. 10. For Rs. 5,000 for that month, your fund house would redeem 500 units (5000/10 = 500). Note that you would still have 7,500 units remaining in your mutual fund.
In the next month, let’s assume that the NAV of the mutual fund plan has risen to Rs. 15. Your fund manager now has to only redeem 333 units from your remaining 7,500 units to give you Rs. 5,000 for this month. So, you still have 7,167 units remaining. In advance of you starting your SWP, an SWP mutual fund calculator can help you decide how many units of a mutual fund scheme to purchase based on the income you require.
The SWP Calculator – What is it?
The SWP mutual fund calculator is an electronic online tool that displays periodic withdrawals (monthly, quarterly, etc.) from any mutual fund investments you have, and if you wish to make use of an SWP. You will be able to view the total value of any investment in a mutual fund after withdrawals are made. This is useful for you to gauge how much to invest in a mutual fund scheme and have the funds ready to do so. For example, in case you wish to collect a retirement corpus, the calculator allows you to make predictive guesses on the potential for returns based on amounts you invest. In other words, the SWP mutual fund calculator can give you an idea of the value of your mutual fund returns in the future with a simple and quick online calculation.
The Perks of an SWP Mutual Fund Calculator
When individuals opt for investments, the most important aspects concern potential returns on investment. Investors would like to have a clue on returns before they decide on amounts to invest. With the SWP mutual fund calculator, investors can conveniently estimate returns, and here are some of the perks of using this versatile online instrument:
- You can compute the monthly, quarterly, bi-yearly, etc, income from your mutual fund investments via an SWP.
- It is possible to use the calculator to enter different withdrawal amounts to judge how much you should invest regarding various maturity returns.
- The calculator aids you in the identification of the most appropriate monthly withdrawals you can receive from any given mutual fund scheme.
- The SWP mutual fund calculator lets you determine the surplus you may collect through an SWP. You may then think of investing this in other financial instruments and products.
Steps to Use the SWP Mutual Fund Calculator
It is not a challenge to use the SWP mutual fund calculator on any portal of a brokerage or a financial asset management company. Through a clear menu-driven process, the SWP mutual fund calculator can be used to generate results that help you decisively make investments to suit your individual needs. Here is how you can use any SWP mutual fund calculator online:
- Look for the tab about online calculators on any financial portal.
- Once you find the SWP mutual fund calculator, you will see a range of fields to be filled in displayed.
- First, fill in your total amount (lump sum) to invest in a mutual fund.
- Enter your withdrawal amount (per month) from your mutual fund.
- Fill out your expected investment rate of return (for debt funds, it may stand at around 4%-6%).
- Enter your investment tenure in years.
- You can then submit your details.
- Based on all your details the SWP mutual fund calculator will display your total amount of investment, withdrawal, any interest earnings, and the investment’s final value.
Using the SWP Mutual Fund Calculator
Today, investors do not rely on just one investment tool for their investments. Several individuals believe in portfolio diversification to mitigate risks and have a range of investments that span mutual funds and direct equity to endowment plans and other retirement schemes. You may be a salaried employee currently, but your salary won’t last you to fund your future milestones and goals. The only way to fulfill your financial dreams and wishes is through investment and mutual fund investment goes a long way to suit your needs, present, and future. What’s more, with great devices like the electronic online SWP mutual fund calculator, you can consider mutual fund plans aligned with SWPs to enhance your financial needs presently, yet build a corpus for the future.