Excess money kept idle for a long time does no harm, but it neither does any benefit. It is considered to be foolish if one keeps it only idle and does not invest it. Do not continue with such goalless money instead of making it double or triple. Invest it and build wealth for your future.
You can do this by investing in SIP Mutual Fund which is a safe and secure way to build more wealth over a more extended period using the current excess wealth. An investment in SIP is more like an investment in a recurring deposit. As an investor, you have to invest in small amounts periodically for a fixed period and afterwards enjoy the returns.
In accordance with the net asset value, as one invests in SIP Mutual Funds, many units are allocated to the investor. More investment leads to more number of units. Over a period, the investor has many units that are why the calculation of returns becomes difficult.
Using a simple XIRR formula you can calculate the returns. All you require is a computer and an excel sheet. Therefore, here’s how you can calculate returns on mutual fund SIP-
- Begin with a SIP investment date column. Mention all the dates during which you had invested.
- Create an amount column; enter the amount invested on those dates. That is the amount you spend periodically.
- Enter the market value of all units. Below the date, column mentions the particular date and below the amount column enter the market value of all the units.
- Then use the XIRR function, by filling the date and value column. For values, select cells with SIP amount and market value. For the dates, select the cells with SIP dates and the date for which you are calculating the returns. Click on OK.
- After that multiply, the answer with 100 and you have your return answer.
To find more information about SIP Mutual Funds, kindly refer https://www.investopedia.com/terms/s/systematicinvestmentplan.asp.