What are the common mistakes people make when using a Future Value Calculator?
- Posted: 29th January, 2025
- Updated: 29th January, 2025
*T&C Apply
ShareShare
https://www.shriramfinance.in/financial-faq-what-are-the-common-mistakes-people-make-when-using-a-future-value-calculator
- Using unrealistic interest rates: Many optimistically project future returns to be higher when historical data suggests them being on the lower side for equity returns over the long term. This gives an inflated future value.
- Assuming fixed, constant returns: In reality, investment returns vary each year. But people simply extend the past few years' returns far into the future.
- Ignoring taxes and inflation: Taxes can substantially reduce net returns, while inflation eats away at purchasing power. Not accounting for them gives an incorrect future value.
- Setting an unrealistically long-time horizon: While long investment horizons allow compounding, predicting 40-50 years into the future is impractical. 15-20 years is more reasonable.
- Not considering fees: Transaction costs and fund management fees reduce returns, impacting future value. But many ignore fees when making projections.
- Not reviewing regularly: Requirements and returns change over time, so future value projections must be reviewed and adjusted regularly.
Popular FAQs
- Does the TDS rate vary for different types of income?
- Can a Term Loan Calculator estimate the total interest paid over the loan term?
- Are TDS rates different for various financial years?
- Can I use a TDS Calculator for rental income calculations?
- Do First-Time Homebuyers Receive any Stamp Duty Exemptions?
- How does the Term Loan Calculator handle extra payments?
- Is Stamp Duty Applicable on Gifts and Inheritances?
- How is Stamp Duty Calculated for Commercial Properties?
- Are Stamp Duty Rates the Same in all States of India?
- What is the Rule of Stamp?
Recent FAQs
- What is a Fixed Deposit?
- Does FD pay monthly interest?
- Will I have to pay a penalty to withdraw FD before its time?
- Can I Start an FD online?
- Which Type of FD is Best?
- Can I Deposit 10 Lakhs in FD?
- Does FD Renew Automatically?
- How can I break my FD without penalty?
- What is the maximum time limit of FD?
- Does FD have a lock-in period?
Check your Free Credit Score
Most Viewed FAQs
- How do I check my loan balance?
- Can I schedule future payments for my municipal bills online?
- Is it safe to make insurance premium payments online?
- Can I pay insurance premiums with a credit card online?
- How can I pay my insurance premium online?
- Can I renew my insurance policy online?
- What is an insurance premium, and why do I need to pay it?
- What are the benefits of renewing insurance policies online?
- How can I find the amount of my municipal water bill online?
You may be interested in
- Home
- Financial FAQs
- What are the common mistakes people make when using a Future Value Calculator?
