Calculating ETF returns: Determining your earnings from an ETF savings plan.
Investing in Exchange-Traded Funds (ETFs) has become a popular choice for individuals looking to build wealth over time. One such investment method is an ETF savings plan, and our website offers a comprehensive tool to help you make informed decisions.
The Advantages of ETF Savings Plans
Our experts recommend choosing a broker account for ETF savings plans based on factors such as zero or low depot fees, a wide range of free ETF savings plans, low minimum savings rates, flexible execution intervals, and low or no order fees. Popular choices include Trade Republic, Scalable Capital, and Comdirect, all of which offer thousands of free or low-cost ETF savings plans and no depot fees under certain conditions.
An ETF savings plan is an excellent way to build wealth by regularly investing in a global equity ETF like the MSCI World, which has historically achieved an average annual return of 8%.
The ETF Calculator
Our ETF calculator allows users to simulate the potential benefits of an ETF savings plan. You can choose from three different methods: simple, advanced, and historical calculation. The simple ETF return calculator requires inputs for single payment, monthly payment, investment duration, and performance.
The advanced calculation allows for additional entries such as variable fee per savings rate, fixed fee per savings rate, annual dynamics, taxes, use of income, type of ETF, base interest rate, tax rate, tax allowance, and inclusion of sale. The historical calculation can be done by selecting an index from a drop-down menu or entering the ISIN international securities identification number of a specific ETF.
The Benefits of Using the Calculator
The calculator provides users with an idea of the potential for wealth accumulation with exchange-traded index funds. Users can experiment with different savings rates, investment durations, and parameters to understand the power of compound interest over time. It can help users decide whether they prefer to invest a large sum at once or set up a regular savings plan.
Moreover, the calculator can help users determine the amount of their savings plan to reach their savings goal. For example, if a user wants to have 1 million euros by retirement at 67, investing for 35 years with an expected value increase of 8%, they can input these numbers into the ETF tool to find the right savings plan amount.
Expert Recommendations
Heike Kevenhöster, our expert on investments, recommends finanzen.net ZERO or Scalable Capital (Free Broker) accounts for beginners due to their affordability, selection of ETFs, stocks, and savings plans, and user-friendly interface.
Additional Features
There is also a feature to compare various ETFs, including European ETFs, MSCI Emerging Markets ETFs, Sustainable ETFs, Money Market ETFs, and learn about ETF taxes and costs. The calculator can be used for various index fund providers like iShares, Amundi, Xtrackers, and others.
Remember, there is a potential for loss of capital with an ETF, but the higher returns over a long investment horizon often outweigh the risk. The website recommends savings plans for cost-effective global equity ETFs such as the MSCI World or MSCI ACWI.
The ETF calculator shows how wealth can significantly grow over time due to compounding. For instance, an initial investment of 1,000 € can grow to 21,725 € after 40 years at an 8% annual interest rate without any further contributions.
Lastly, the ETF calculator does not automatically factor in inflation. Users can adjust the expected return to account for inflation by subtracting 2% from the expected return. The calculator can also be used for stocks and active funds, although it is primarily designed for index funds.
Start your investment journey today with our ETF calculator and discover the potential for wealth accumulation with exchange-traded index funds. For more information on ETF portfolios and recommendations, visit our website.
