What is Lumpsum Investment?

A lump sum investment is an investment strategy in which an investor deposits the entire amount of money he has with him in one go. Lump-sum investments are made when you have a substantial amount of money and are planning to invest it in mutual funds. Mutual fund investors usually make lump-sum investments at various points with the intention of investing in a large number of units at one time. Comparisons are then made to calculate the returns that they got over a period of time by investing in mutual funds. You'll come across hundreds of types of investment plans in this role. When you start investing, ask yourself whether you'd prefer to make lump-sum investments or if you'd rather choose your investments carefully over time so as to drip-feed some money into them each month or year.

Lump-sum investing is a common mode of investment for HNIs and big-ticket investors. An investor who has a high-risk tolerance may consider making lump-sum mutual fund investments. Lump sum investing can be an excellent way of investing in the long term. Basically, you make one single investment instead of dividing your money into multiple investments over time.

What is a Lumpsum Calculator?

A lump sum calculator is a very handy tool when considering investing. It allows you to quickly see the long-term result of an investment and how much wealth you gain in particular situations. A common example is when you have access to a relatively large sum of money (for example, a monetary gift from a generous relative), or the divorce settlement and need to determine the optimal way to invest it. A lumpsum calculator assumes that the owner of that investment has invested in the market years ago, and will have to wait for many years before he sees his final wealth. It also assumes that the investor will only harvest at a certain age, and hence shows the expected number at that required age.