[Financial Sharing]Regular investment

Glad that you are here to participate our financial sharing! The topic we'll be sharing is on REGULAR INVESTMENT.

RFI(Regular Fixed Investment)is the investment strategy that most people with monthly salary can consider.

Most people have a fixed monthly income, so RFI can help to invest and accumulate wealth.

Well, how much do you need to invest regularly and for how long? It depends on the difference of individual income and brude.

We can use a tool to calculate named Finacial Calculator.

There are 5 Options online: FV , PMT , I/Y , N , Starting Principal, but this article will focus on the two pages, preferentially FV and PMT.

Firstly, let's understand what some of these words mean:

N(# of periods) = duration of investment, usually in years.

Starting Principal = Starting investment amount.

I/Y (Interest) = Return on Investment or Interest.

PMT (Payment ) = money per investment, usually in years.

FV(Future Value) is mainly used to calculate the future value, that is, how much money you invest now, how long you invest, and how much money you can have in the future, given the rate of return.

Step 1, put the year you expect to invest in the space of N

Step 2, put the money you can invest now into the space of Start Pirincipal

Step 3, put the expected return on investment in the space of I/Y Interest

Step 4, put the money you intend to invest every year in the space of PMT. If you can invest 500 a month, then a year is 6,000, that you can put in the space of the PMT

Now, click the Calculate button, and you'll find out the final value in the future.

For a instance, if Cici intends to use a sum of money $5,000 to invest. Then i'll make a program which is $500 monthly, $6,000 a year, for over 30 years. Besides learning to invest, I expect to get a 10% return on investment a year.

Enter these data in our Financial Calculator.

As you can see from this picture,

In 30 years, I will have more than 1 million assets.

What can you do if you are not satisfied with the results based on your own calculations?

1. The first method is to increase the time to save money regularly. Simply means to postpone your retirement.

You can extend your retirement age by 10 more years. By doing so, you can continue to earn interest for an additional years on the ending amout in the form of rolling interest.

Howeve, the disadvantage is obvious, which is the older the person, the working ability decreases. If you have extended your retirement age to 70, but is still unable to accumulate assets that you are satisfied with, then i suggest you use the second method.

2. The second method is to increase the PMT. Raising your PMT simply means increasing the amount you can save each year.

You can increase the amount of money you can save by increasing your income and reducing your expenses. As for ways to increase your income and reducing your expenses, we have taught you in the first few lessons which I'll not be repeating it here.

3. The third way is to increase the ROI. How to do so? The interest on fixed deposits is usually only about 3-4%. As for trust funds, the average is around 8%.

PMT is mainly used to calculate how much money you need to invest in order for you to achieve your desired financial goals in the future.

Step 1, put the financial goals you want to achieve in the future into the space of Future value

Step 2, put the year you expect to invest in the space of N

Step 3, put the money you can invest now, into the space of Start Principal

Step 4, put the expected return on investment in the space of I/Y Interest

Then just press Calculate and you'll be able to calculate how much money you need to invest every month to achieve your financial goals.

Supposingly I have invested $5,000, and I want to hit the asset goal of $1 million in 20 years. By learning to invest, I expect to get a 10% return on investment a year.

By doing this, I need to invest $16,872.33 per year in order for me to reach my financial goals. That is about 1400 yuan a month.

As long as you are willing to learn the correct investment strategies, you will definitely have the opportunity to create passive income~

I hope you can learn something from this class today.