Display name
Stored only on this device — no account.
Measure what your money actually earned.
Return on investment turns any gain into a single comparable percentage. Enter what you put in and what you got back to see your ROI and profit in one glance. Use it to compare stocks, a side business, or even a course — against each other and against doing nothing.
Return on investment (ROI) measures the efficiency of an investment: (gain - cost) / cost, expressed as a percentage. Spend $18,000, sell for $25,000, and your ROI is (25,000 - 18,000) / 18,000 = 38.89%. It puts a stock trade, a rental property, a business expansion, and a marketing campaign on the same scale — the highest ROI used the capital best, regardless of the dollar amounts involved. That comparability is ROI's superpower: it answers 'was this worth it?' in a single number anyone can understand.
ROI's blind spot is time. A 40 percent return over one year is excellent; the same 40 percent over ten years is mediocre — about 3.4 percent annualized. For multi-year investments, pair ROI with an annualized figure (CAGR = (end/start)^(1/years) - 1) so time is properly accounted for. Also make sure 'gain' is genuinely net of all costs: brokerage fees, taxes, repairs, closing costs, and the value of your own time. Gross figures flatter every investment — a house flip showing 25% ROI before the $15,000 in realtor fees and the 200 hours of labor is telling a story, not reporting a result. And ROI says nothing about risk: a 38% return that could easily have been -50% is a gamble, not a strategy. For comparing investments held different lengths, annualize with CAGR: (end/start)^(1/years) - 1. A 38.89% two-year ROI annualizes to 17.85%; a 60% five-year ROI annualizes to just 9.86% — the longer hold wins on total but loses per-year. Also distinguish ROI from cash-on-cash return in real estate: putting $60,000 down on that $300,000 property and netting $18,000 a year is a 30% cash-on-cash return on your invested cash, even though the property-level ROI is 6% — leverage magnifies both gains and risks.
ROI = (amount returned − amount invested) ÷ amount invested × 100. A negative result means the investment lost money.
Profit: 25,000 - 18,000 = $7,000. ROI: 7,000 / 18,000 = 0.3889 = 38.89%. Every dollar invested returned about $1.39. If the holding period was 2 years, the annualized return (CAGR) is (25,000/18,000)^(1/2) - 1 = 17.85% per year — still strong, but noticeably less dramatic than 38.89% sounds. Always ask 'over what period?' when someone quotes you a return.
A $300,000 property earns $24,000 in annual rent with $6,000 of expenses (property tax, insurance, maintenance, vacancy allowance). Net income: $18,000. ROI: 18,000 / 300,000 = 6% per year. Compare that 6% against alternatives: a 5% mortgage on the same property would leave only ~1% net of financing costs, while stock markets have averaged roughly 7-10% long-term with far less hassle. The 6% also ignores appreciation — if the property gains 3% a year, the total return is closer to 9%, which is why landlords tolerate the toilets-and-tenants lifestyle.
It depends on risk and time. A 7–10% annual ROI is a solid long-term benchmark for stock-market investing; a 'good' ROI on a risky startup bet would need to be far higher to justify the risk.
No — and that's its biggest weakness. A 50% ROI over one year is excellent; over ten years it's weak. For multi-year investments, also look at annualized return (CAGR).
Yes. If you get back less than you put in, ROI is negative and the 'profit' shows as a loss. Selling a $8,000 investment for $6,000 is a −25% ROI.