Calculate return on investment (ROI) with annualized returns and performance metrics. Analyze your investment performance for stocks, real estate, and business ventures.
ROI tells you the total return over the entire period, while annualized returns show what you earned per year on average. A 50% ROI over 5 years sounds great, but that's only 8.4% annually - which is solid but not spectacular.
Always look at annualized returns when comparing investments with different time horizons. It's the most honest way to evaluate performance and make informed decisions.
S&P 500 averages ~10% annually over long periods. Individual stocks vary wildly.
Rental properties: 8-12% annually. House flipping can be higher but riskier.
Government bonds: 2-4%. Corporate bonds: 4-8%. Lower risk, lower returns.
Successful businesses can return 15-25%+, but most fail within 5 years.
ROI shows your total return over the entire investment period, while annualized return shows the average yearly return. For example, a 44% ROI over 4 years equals about 9.6% annually. Annualized returns are better for comparing investments held for different time periods.
Absolutely! Your final value should include all dividends received during the holding period. Dividends are a significant part of total stock market returns - historically about 40% of the S&P 500's total return comes from dividends reinvested over time.
For rental properties, include all rental income received plus any appreciation in property value. Don't forget to subtract expenses like taxes, maintenance, and vacancy periods from your final value. Your initial investment should include down payment, closing costs, and initial repairs.
While possible, 15% annually is quite ambitious for long-term investing. The S&P 500 has averaged about 10% annually since 1926. Some years deliver 20%+, others lose 20%+. Expecting 15% consistently may lead to taking excessive risks or being disappointed with solid 8-10% returns.
ROI = ((Final Value - Initial Investment) ÷ Initial Investment) × 100
This gives you the total percentage return over your entire holding period. A $10,000 investment worth $15,000 after 3 years has a 50% ROI.
Annual Return = ((Final Value ÷ Initial Investment)^(1/Years)) - 1) × 100
This shows the equivalent annual return. The same 50% ROI over 3 years equals about 14.47% annually - much more meaningful for comparisons.