Investment Growth Calculator

The Rule of 72 is a quick mental shortcut to estimate doubling time. Formula: 72 ÷ Annual Return % = Years to Double. Example: 8% return → 72 ÷ 8 = 9 years to double. ₹10L at 8% becomes ₹20L in 9 years, ₹40L in 18 years, ₹80L in 27 years (power of compounding). Works best for returns between 6-12%. At 10% return: 72 ÷ 10 = 7.2 years. At 12%: 6 years. CRITICAL: Higher returns = exponentially faster wealth. 12% vs 8% = doubles 3 years faster (massive long-term difference). Use to evaluate investment options: Equity mutual funds (12%) vs FD (6.5%) → Equity doubles in 6 years, FD in 11 years.

DCA = Investing fixed amount at regular intervals (monthly), regardless of market price. Example: ₹10k/month in mutual fund. Month 1: NAV ₹100 → Buy 100 units. Month 2: NAV ₹80 (market crash) → Buy 125 units. Month 3: NAV ₹110 → Buy 91 units. Total: ₹30k invested, 316 units, average cost ₹95/unit (vs ₹97 if bought all at once). Benefits: (1) Removes emotion (no market timing stress), (2) Automatically buys more when cheap, less when expensive, (3) Reduces volatility impact. CRITICAL: 20-year SIP in Nifty 50 = 12-14% CAGR (vs lump sum which needs perfect timing). DCA wins for salaried professionals (invest from monthly income, not lump sum).

Rule of Thumb: Equity % = 100 - Your Age. Age 30 → 70% equity, 30% debt. Age 50 → 50% equity, 50% debt. Detailed Allocation: (1) Age 20-35 (Aggressive): 80% equity (large-cap 40%, mid-cap 25%, international 15%), 15% debt, 5% gold. (2) Age 35-50 (Moderate): 60% equity, 30% debt (bonds, FDs), 10% gold/REITs. (3) Age 50+ (Conservative): 40% equity, 50% debt, 10% cash/gold. Risk Tolerance Override: High risk tolerance (can handle 30-40% drawdown) → Add 10-20% equity. Low risk (panic at 15% drop) → Reduce equity by 20%. CRITICAL: Rebalance annually (sell winners, buy losers to maintain allocation). 2008 crash example: 70-30 became 50-50 due to equity fall → Sell debt, buy equity at low = massive 2009-2020 gains.

Fees compound AGAINST you (silent wealth killer). Example: ₹10L invested for 30 years at 12% return. Zero fees: ₹2.99 Crore. 1% annual fee (11% net return): ₹2.29 Crore (₹70L less, 23% smaller). 2% fee (10% net): ₹1.74 Crore (₹1.25 Crore less, 42% smaller!). Direct vs Regular Mutual Funds: Regular (1.5-2% expense ratio via distributor commission). Direct (0.5-1% expense ratio, buy online). Over 20 years on ₹10L: Regular = ₹58L, Direct = ₹76L (₹18L difference). CRITICAL: Always prefer Direct Plans. Index funds = lowest fees (0.1-0.5%). Active funds charging 2%+ must beat index by 2%+ to justify (most fail). Check Expense Ratio in fund factsheet.

Lump Sum wins IF market timing is perfect (buy at bottom). SIP wins for most retail investors (no crystal ball). Historical Analysis (Nifty 50, 2000-2024): Lump sum at 2000 start = 14.2% CAGR. SIP monthly 2000-2024 = 13.8% CAGR (slightly lower BUT much lower risk). When to use: (1) Lump Sum: Market crash (2009, 2020 COVID lows), Bonus/windfall + high conviction, 10+ year horizon (time smooths volatility). (2) SIP: Regular salary income, Volatile markets (current), Risk averse. BEST STRATEGY: Hybrid - Core SIP (₹10k/month automatic) + Opportunistic lump sum during 15-20% corrections. 2020 March example: Nifty fell 38% → Lump sum ₹5L = 60% gain in 12 months.

Real Return = Nominal Return - Inflation. Nominal 12% - 6% inflation = 6% real return. Example: ₹10L today has purchasing power of ₹10L. At 6% inflation, after 10 years you need ₹17.9L to buy same goods. If investment grew to ₹25L (10% nominal), real value = ₹25L ÷ 1.79 = ₹14L (only 40% real gain, not 150% nominal gain). CRITICAL: Always calculate inflation-adjusted returns. FD at 6.5% - 6% inflation = 0.5% real (wealth barely growing). Equity at 12% - 6% inflation = 6% real (wealth doubling every 12 years in real terms). Health insurance, education costs inflate at 10-12% → Need 12%+ returns just to maintain parity. Use inflation-adjusted calculator for retirement planning (not nominal).

Absolute Return = Total % gain over period, ignores time. CAGR (Compound Annual Growth Rate) = Annualized % factoring time. Example: ₹10L → ₹20L in 5 years. Absolute = 100% (doubled). CAGR = 14.87% per year. Why CAGR matters: Compare apples to apples. Investment A: 50% in 2 years (CAGR 22.5%). Investment B: 80% in 5 years (CAGR 12.5%). Absolute says B is better (80% greater than 50%), CAGR says A is WAY better (22.5% vs 12.5%). Formula: CAGR = [(Final ÷ Initial)^(1/Years)] - 1. Nifty 50 example (2000-2024, 24 years): Absolute return 900% (9x). CAGR 9.8%. CRITICAL: Always use CAGR to compare funds, stocks, real estate across different time periods.

Rebalancing = Selling winners, buying losers to maintain target allocation. Example: Start 70% equity (₹7L), 30% debt (₹3L). After 2 years: Equity up 50% = ₹10.5L, Debt up 10% = ₹3.3L. Total ₹13.8L but now 76-24 allocation (too risky). Rebalance: Sell ₹0.6L equity, buy debt → Back to 70-30 (₹9.9L equity, ₹4.2L debt). Benefits: (1) Forces "sell high, buy low" discipline, (2) Reduces portfolio volatility, (3) Locks in profits. Evidence: 20-year study shows annual rebalancing added 0.5-1% extra return vs never rebalancing. Frequency: (1) Calendar-based: Once per year (simple, tax-efficient if done in January). (2) Threshold-based: When allocation drifts 5%+ (70-30 becomes 75-25 or 65-35). CRITICAL: Rebalance inside tax-free accounts first (PPF, EPF) to avoid capital gains tax.

Depends on time horizon and expected return. Formula: Monthly SIP = Goal ÷ [(1+r)^n - 1] ÷ r, where r = monthly return, n = months. Example calculations: (1) 10 years at 12%: ₹43,470/month = ₹1 Crore. Total invested ₹52.2L (return ₹47.8L). (2) 15 years at 12%: ₹20,275/month = ₹1 Crore. Total invested ₹36.5L (return ₹63.5L, more from compounding). (3) 20 years at 12%: ₹10,260/month = ₹1 Crore. Total invested ₹24.6L (return ₹75.4L). (4) 25 years at 12%: ₹5,550/month = ₹1 Crore. Total invested ₹16.6L (return ₹83.4L). CRITICAL: Starting early = massively lower monthly requirement. 25-year SIP = half the monthly amount of 15-year SIP for same goal. Start NOW, even small amount (₹5k/month), increase by 10% annually (step-up SIP).