ROI Calculator
Works for stocks, property, business, and any investment
Initial investment (what you put in)
$10,000
The total amount you invested or paid at the start
Final value (what it is worth now)
$14,000
The current or final value of your investment including any income received
Additional income received (dividends, rent, etc.)
$0
Any cash income received during the holding period such as dividends or rental income
Holding period
3 years
How long you held the investment. Used to calculate annualised return
Total ROI
+40.0%
total return over 3 years
Net profit
$0
Annualised return
0%
Money multiplied
0x
Total value including income
$0
How your annualised return compares
Understanding ROI
Why annualised return matters more than total return
A 100% return sounds exceptional. But if it took thirty years to achieve, the annualised return is only about 2.3% per year, which is below inflation. A 30% return over one year is 30% annualised and genuinely strong. The total return percentage is only meaningful when you know how long it took.
This is why this calculator shows you both figures. Total ROI tells you what happened. Annualised return tells you whether it was any good. The benchmark comparison section shows how your annualised return stacks up against a savings account, inflation, a bond fund, and the S&P 500 so you can judge the result in context.
The ROI formula
ROI is calculated as (Net Profit divided by Initial Investment) multiplied by 100. Net profit is the final value plus any income received minus what you paid in. The annualised return uses the CAGR formula to convert the total return into a per-year figure. Both are shown automatically as you move the sliders.
Include all income
A complete ROI calculation includes not just price appreciation but all income received during the holding period. For a stock, this means dividends. For a rental property, this means rent collected. For a business, this means profits distributed. The income slider lets you add this to get your true total return.
Beat the benchmark
The most important question any investment must answer is whether it beat the available alternative. If your stock returned 8% per year but the S&P 500 index returned 12% per year over the same period, a simple index fund outperformed your active picking with no effort and lower fees. Always compare to the relevant benchmark.
Frequently asked questions
What people ask about ROI
What is a good ROI for a stock investment?
The most relevant benchmark is the S&P 500, which has returned approximately 10% per year on average over the past fifty years. An annualised return consistently above 10% on a diversified portfolio is genuinely excellent. A return between 7 and 10% per year is solid. Below 7% over a long period may suggest that a low-cost index fund would have served you better. The key is to compare your annualised return to the index, not to measure it in isolation.
What is the difference between ROI and annualised return?
ROI is the total percentage return over the full holding period. Annualised return converts that total into a consistent per-year figure using the CAGR formula. A 100% total ROI over ten years is only 7.2% annualised. The same 100% ROI achieved in three years is 26% annualised, which is exceptional. Always use annualised return when comparing investments held for different lengths of time.
Should I include dividends in my ROI calculation?
Yes, always. A stock that returned 5% in price appreciation but paid 4% in dividends had a total return of approximately 9%, not 5%. Ignoring dividend income significantly understates the return of income-focused investments. The income slider in this calculator lets you add dividends, rent, or any other income received during the holding period to get your true total return. This is especially important for REITs and dividend stocks where a large portion of total return comes from income.
What does a negative ROI mean?
A negative ROI means your investment is currently worth less than what you paid, or that you took a loss when you sold. It does not automatically mean the investment was a mistake. Context matters. A temporary unrealised loss in a long-term equity portfolio during a market downturn is very different from a permanent loss of capital in a failed business. If your investment is still held, a negative ROI simply reflects the current mark-to-market value and may recover over time.
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