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# Investment Length Needed Calculator

Calculation Target:

Input a negative value for withdrawing.

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Input the before tax annual return

Calculated Results
Lenth Needed59 months
Total Interest10,500
Total Contribution29,500
End Balance60,712
End Principal49,500
##### Related
Interest Portfolio Performance Return CD

#### Balance and Interest

Year Begin Principal Begin Balance Interest End Principal End Balance
1 20,000 20,000 1,363 26,000 27,363
Month120,00020,0009720,50020,597
Month220,50020,59710021,00021,198
Month321,00021,19810321,50021,801
Month421,50021,80110622,00022,407
Month522,00022,40710922,50023,016
Month622,50023,01611223,00023,628
Month723,00023,62811523,50024,243
Month823,50024,24311824,00024,861
Month924,00024,86112124,50025,482
Month1024,50025,48212425,00026,106
Month1125,00026,10612725,50026,733
Month1225,50026,73313026,00027,363
2 26,000 27,363 1,805 32,000 35,168
Month1326,00027,36313326,50027,996
Month1426,50027,99613627,00028,633
Month1527,00028,63313927,50029,272
Month1627,50029,27214228,00029,915
Month1728,00029,91514628,50030,560
Month1828,50030,56014929,00031,209
Month1929,00031,20915229,50031,861
Month2029,50031,86115530,00032,516
Month2130,00032,51615830,50033,174
Month2230,50033,17416131,00033,836
Month2331,00033,83616531,50034,500
Month2431,50034,50016832,00035,168
3 32,000 35,168 2,273 38,000 43,442
Month2532,00035,16817132,50035,840
Month2632,50035,84017433,00036,514
Month2733,00036,51417833,50037,192
Month2833,50037,19218134,00037,873
Month2934,00037,87318434,50038,557
Month3034,50038,55718835,00039,245
Month3135,00039,24519135,50039,936
Month3235,50039,93619436,00040,630
Month3336,00040,63019836,50041,328
Month3436,50041,32820137,00042,029
Month3537,00042,02920537,50042,734
Month3637,50042,73420838,00043,442
4 38,000 43,442 2,770 44,000 52,211
Month3738,00043,44221138,50044,153
Month3838,50044,15321539,00044,868
Month3939,00044,86821839,50045,586
Month4039,50045,58622240,00046,308
Month4140,00046,30822540,50047,034
Month4240,50047,03422941,00047,763
Month4341,00047,76323241,50048,495
Month4441,50048,49523642,00049,231
Month4542,00049,23124042,50049,971
Month4642,50049,97124343,00050,714
Month4743,00050,71424743,50051,461
Month4843,50051,46125044,00052,211
5 44,000 52,211 3,000 49,500 60,712
Month4944,00052,21125444,50052,966
Month5044,50052,96625845,00053,723
Month5145,00053,72326245,50054,485
Month5245,50054,48526546,00055,250
Month5346,00055,25026946,50056,019
Month5446,50056,01927347,00056,792
Month5547,00056,79227647,50057,568
Month5647,50057,56828048,00058,348
Month5748,00058,34828448,50059,132
Month5848,50059,13228849,00059,920
Month5949,00059,92029249,50060,712

#### How to calculate Investment Return

The calculator will calculate the annualized IRR return that is considered as a good index to measure an invesment return. The IRR return use the cash flow of the whole investment life and discount it based on the time factor such that the net present value of the cash flow is equal to the initial investment based on this formula: $Initial = \sum_{n=1}^{n=m} \frac{F_n}{(1+IRR)^n}$ Where $F_n$ is the investment Cash flow for year n (that is the Interest Earned - Contribution), m is the number of years of the investment.

#### How to invest

To manage your personal finance, investment is one of the most important tool for you to reach your goal. A healthly financial life almost always come along with a good investment. Here are a list of good tips of investment:
• Set up a clear and realistic goal. Then start to invest for the goal as soon as possible. The investment process will need time to build wealth, by starting early will give you more time to grow your wealth. You can try to adjust the Investment Length to see how it will impact your end balance. Or you can try to calculate how long it will take to reach your goal using the calculator.
• Seeking a better return. The difference of the investment return will make a big difference to the end balance given a long investment term. For example, put your money into a bank saving account might only give you a 2% return, but invest a REIT fund might give you a 8% or even higher return. You can try to use the calculator to change the return for a fixed time period to see how it will impact your end wealth.
• Consider of investment risk and try to manage the risk. Investment will have a risk. Especially if you want to higher return. Normally, the higher return coming along with the higher risk. Therefore, to manage the risk is the most important point in the investment process. If one investment has 20% return in one year, but -2% in the next year, but the other investment has a stable return of 9% every year, you should select the later one because it is considered as lower risk than the first case. To separate the in flow of your investment by periodic contribution is a good way to manage the market timing risk.
• Diversify your investment portfolio is another way to manage risk. If you put all you asset into one bucket and if that bucket has a problem, your whole portfolio is going down. For example, if you put all your asset in to stock market, and when the market clash, you will see you whole portfolio going down. By diversify, you can have one bucket offset the other if one is not performing well. Consider of the total wealth in the world is fixed, so when one section of investment world valued down, there will be most likely another section going up.