Calculate your total and annualized return on any investment, including all costs
Return on Investment (ROI) is a performance metric used to evaluate the profitability of an investment relative to its cost. It is expressed as a percentage and tells you how much you gained (or lost) for every dollar you invested. A positive ROI means you made money; a negative ROI means you lost money.
ROI is one of the most widely used metrics in both personal finance and business because it is simple to calculate and easy to compare across different types of investments — whether stocks, property, business ventures, or any other asset.
Total ROI measures your overall return regardless of how long the investment was held. For example, a 60% total ROI sounds impressive, but if it took 15 years to achieve, it averages only about 3.2% per year — which is below long-term stock market averages.
Annualized ROI (also called Compound Annual Growth Rate or CAGR) converts your total return into an equivalent yearly rate, allowing you to fairly compare investments held for different durations. Our calculator shows both figures so you can evaluate your investment from both perspectives.
Pro tip: Always include all associated costs — brokerage fees, transaction costs, maintenance, taxes — in the 'Additional costs' field. Ignoring these can make a mediocre investment look far better than it actually is.
The real power of the ROI calculator is in comparison. You can model two different investment options side by side — for example, putting money into index funds versus buying a rental property — and compare their annualized returns to make a more informed decision.
Remember that ROI does not account for risk. A higher ROI investment may come with significantly more volatility or uncertainty. Always consider risk alongside return when making investment decisions.
ROI = (Final Value - Initial Investment - Additional Costs) ÷ (Initial Investment + Additional Costs) × 100. The result is expressed as a percentage. A positive figure means profit; negative means a loss.
Annualized ROI (or CAGR) converts your total return into an equivalent yearly rate, allowing fair comparison of investments held for different durations. It answers the question: 'what annual return would produce this result over this many years?'
Include any costs directly associated with the investment: brokerage or transaction fees, maintenance or management costs, insurance, legal fees, and any taxes paid. Excluding costs inflates your apparent ROI and gives a misleading picture of actual performance.
A 'good' ROI depends entirely on the investment type and risk level. Historically, the US stock market has averaged about 10% annually before inflation. Real estate, bonds, and savings accounts have different typical ranges. Always compare ROI against the risk taken to earn it.