Mutual fund investments have become a much-preferred investment option which is convenient and offers diversification to the investors. There are many types of mutual funds available that can suit any investor's requirement.  

In this article, we are going to answer some very pertinent questions about how to start planning your mutual fund investments using an online calculator like the lumpsum calculator, or SIP calculator etc., and types of mutual funds that you may choose for your investment.  

Planning for your financial goals 

Here are a few steps that can help you start planning for your investment journey. 

  • The first step towards achieving your financial goals is to determine the goals and attach a financial value to them.  
  • The next step is to find out how much time you have left to achieve each of your goals.  
  • A very important step is to figure out the risks that you are ready to take. The risk profiling is based on your own age, the number of dependents you have, and the time left for your goals.  
  • For attaching a financial value to your goals, you need to figure out the amount of money you will need to fulfill your financial goals. Conversely, if you have some money to invest, you need to calculate how much it will grow over the years. For example, you have some money saved up and you want to invest it. Since this is a one-time investment, you can use a lumpsum calculator to determine the value of your investment as it would stand after say 5 years or 10 years from now. Now let us say, you have a goal of financing your children's higher education at the end of 10 years then the calculation from the lumpsum calculator will tell you how much you can hope to accumulate with your investment. If you feel that the corpus that will be built up will not be enough, then you can plan to invest more. This way you will have better control over your plans. 
  • Now is the time to search for the types of mutual funds that can align to your goals, time horizon and risk profile. For example, let us say you have a timeline of 10 to 12 years for one of your goals and you can take high risk, then equity mutual fund will suit you. Whereas if you are risk averse and would like to be a bit more conservative in your approach to investing then you may look for a hybrid fund that can give you capital appreciation coupled with reasonably stable returns. In the scenario that you have a short-term goal between 1-3 years then you would do better with investment into a debt fund with the appropriate residual maturity of its underlying securities. In this way, you may choose a separate mutual fund scheme for each of your goals.  
  • The last step is to decide how much you need to invest. Your calculation with a lumpsum calculator would have given you a ballpark amount of how much you can save with your lumpsum investment. You can also choose the SIP way which is a much more convenient and pocket-friendly option for investments. In that case you can use the online SIP calculator to determine the amount you need to invest. 

Take the help of a mutual fund distributor or a financial advisor who may also use a SIP or lumpsum calculator to determine the future value of your one-time investment and also help you choose the appropriate types of mutual funds.