ROI Calculator

(Final value − Amount invested) ÷ Amount invested × 100. Invest $10,000, end at $14,000: ($14,000−$10,000)÷$10,000 = 40% ROI, a 1.4× multiple. The formula is trivial; the discipline is in the inputs — 'final value' should be net of selling costs and 'amount invested' should include every cost of getting in. Most inflated ROI claims aren't math errors, they're incomplete cost accounting.

Because total ROI ignores time, and time is the whole game. +40% in one year is exceptional; +40% over ten years is 3.4% annualized — losing to inflation most decades. CAGR (compound annual growth rate) converts any return into a per-year compounding rate: (final÷initial)^(1/years) − 1, which lets a 3-year flip, a 7-year stock, and a savings account sit on the same scale. When comparing anything, compare CAGRs.

Compounding. 40% over 3 years annualizes to 11.9%, not 13.3%, because each year's growth builds on the last — the later years start from a bigger base, so a smaller rate suffices. The gap widens with time and magnitude: doubling in 10 years is 7.2%/yr, not 10%. Dividing by years overstates every multi-year return, which is why marketing materials love 'average annual return' arithmetic — always ask for the compound rate.

Anchor to the alternative: broad stock index funds have historically annualized around 7–10% before inflation, so that's the hurdle any active effort must clear *after* costs and your time. For reselling: a flip earning 30% in a month annualizes astronomically — velocity is why flipping works despite modest per-item margins. And risk scales with promised return: anything pitching 'safe' double-digit monthly returns is describing something other than an investment.