In our earlier blog posts, we told you about having an investment goal. So here, we're going to cover an investment plan.

So what is a goal that we had earlier?

We have the goal of retiring in 30 years with $1 million.

What goes into a plan? Let's find out. We'll need some factors: time, 30 years and the amount we want which is $1 million dollars.

What other things can we think about that will affect the plan?

Rate Of Return

For example, something called the rate of return.

The rate of return very much depends on what you're investing in. So for example, we'll take a rate of return of 6%. At 6% per annum, how much do I need to put aside every month to get a million dollars in 30 years? Follow me with the math. If you're following at home, just google any financial calculator. You want to look for a time value of money calculator or a TVM.

Future Value

So when you have your TVM, these are the fields you want to look for: FV. That's future value. It's very simple. The future value is that $1 million that you want to have in the future.

Period

You will also want to find out your period or the number of years.

You'll also want to have an interest rate or a rate of return which is here, 6% per annum.

Payment

Now that we have the three factors that go into a plan, we have the rate of return, we have the future value which we want, and we have the number of periods which is 30 years, there is a little button that you're going to look for called payment which is PMT.

Payment is the number that you need to put aside every month or every year depending on the settings, to earn 6% per annum over 30 years to get $1 million.

In other words, if I put in this amount regularly at this rate of return I will get this amount of money, a million dollars, in this amount of time, 30 years.

If you're following at home, the numbers you should be getting is roughly about $1,000 every month. Show us your calculations down below in the comments and we'll be more than happy to help you out.

So now that you see with the numbers you've put in, you know how much you can put in every month, we'll cover what to invest in later on. So with this, you've got a clear plan on how to achieve your goal. So remember before you start investing have a goal, have a plan, then we take action.

How much payment do you need to pay each month to reach your goal? Comment it down below as an act of commitment to your investing goals!