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As of 2019

Investment Return Calculator

Are you on track to meet your long-term investment goals? See how your portfolio is doing by calculating your estimated return rate. Then, download our free tools to see a complete view of your finances.

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What is investing?

Investing is the act of allocating resources, usually money, with the expectation of generating an income or profit. Investing can also generate passive income. For example, some companies pay dividends to shareholders, which is their way of passing along profits to the company’s owners. Similarly, you can invest in assets, such as purchasing real estate, or in endeavors like starting a business.

Types of investments

Here are the most common investment types at a glance.

What is a return on investment?

Return on investment (ROI) is an approximate measure of an investment's profitability. It has a wide range of applications; it can be used to measure the profitability of a stock investment, when deciding whether or not to invest in the purchase of a business, or evaluate the results of a real estate transaction.

How do I calculate my return on investment?

ROI is calculated by subtracting the initial value of the investment from the final value of the investment (which equals the net return), then dividing this new number (the net return) by the cost of the investment, and, finally, multiplying it by 100.

What is your rate of return over time?

The goal of any investment is to get more cash out than you put in. How much could you potentially make over time? The actual rate of return is largely dependent on the types of investments you select. As time goes on your investment interest goes up but you will all need to take into account inflation. It’s important to note that your investments won’t always grow.

There have been months where the stock market sees negative growth. But according to the Securities and Exchange Commission, the stock market has an average annual return of 10% (closer to 6% or 7% “real” returns when you subtract for the effects of inflation) over long-term periods of time, even when you account for the bad years. The riskier the investment, such as stocks, usually the higher return.

Be sure to use our calculator above to get an overall estimate.

How can you make investing part of your plan?

The fact is that most of us won’t be able to retire comfortably without investing. Here’s how you make investing a part of your overall financial plan:

  • Assess where you are now. It’s important that before you make any big money moves, you take inventory of where you are now.

  • Secure your financial safety net. Make sure that before you increase your investing efforts, you have an emergency fund in place.

  • Define your long-term goals. At what age do you want to retire? How much do you want to spend per year during retirement? Using these factors, you can use likely investment returns to figure out how much you’d need to invest per month to reach your goal.

  • Identify the right investments for you. As we discussed earlier, there are plenty of options, including stocks, bonds, and mutual funds. Remember to diversify your portfolio and choose assets that match your risk tolerance.

  • Revisit your investments. Remember that your financial goals and risk tolerance may change over time, and it’s important to revisit your portfolio to ensure it still lines up with your goals.

Disclosure

The content is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

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Advisory services are offered for a fee by PCAC, a wholly owned subsidiary of PCC, an Empower company. PCAC is a registered investment adviser with the Securities Exchange Commission ("SEC"). SEC registration does not imply a certain level of skill or training. Past performance is not a guarantee of future return. Investing involves risk. Personal Capital and the Personal Capital logo are trademarks of PCC. All other trademarks, trade names, or service marks used or mentioned belong to their respective owners.