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Calculating your investments

An investment calculator can help you figure out how to meet your goals.

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Whether you’re considering getting started with investing or you’re already a seasoned investor an investment calculator can help you figure out how to meet your goals. You’ll need to know or decide on four key things to make a somewhat accurate prediction of the future of your investments.

First you’ll need to state your starting balance. How much money you’ll be putting in to begin with. The more you put in front the more you’ll be building from the get go.

It’s a good idea to keep regularly adding to your holdings to keep your investment growing. This is called your contribution. A common strategy is to pay in monthly or bi weekly deducting it from your income as part of your budget. But you can also pay in just once a year. If that suits you better.

Then, you’ll need to decide on the level of risk you’re comfortable with and the potential rate of return. There’s no way to guarantee this figure but looking at historical returns might give you a guide as to what the future might potentially be.

The last part you want to consider is how long you’ll be leaving your investment to mature. What are your goals for your investment? Whether it’s retirement or university fees for your children It’s a good idea to have in mind when you expect to sell your investment so you can plan around what state it might be in.

At Steps to Investing.com We have a calculator that uses financial data from a range of investment trusts to show what the earnings potential was over a range of years.

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