Finance

Personal Return on Investment Calculator (40 Years)

Calculate return on investment as a percentage. This personal version uses a 40-year planning term as its starting point.

The Return figure is the total gain or loss over the full 40 years, shown as a percentage of the amount invested. A positive Return means the final value is higher than the amount invested, a negative Return means it is lower, and a Return of 0.00% means the money came back unchanged. Because it covers the whole 40 years, it is not a yearly rate, so compare it only with returns measured over the same length of time and with similar risk.

Formula

Return equals final value minus invested amount, divided by invested amount, times 100.

How it works

A positive return means the final value is higher than the amount invested.

Worked example

Amount invested $10,000, final value $15,000, term 40 years. First, the gain is $15,000 minus $10,000, which is $5,000. Using the page formula, return is $5,000 divided by $10,000, times 100, which is 50.00%. That is the total return over the whole 40 years, not a yearly rate. As an illustration only, not the output of this page, the annualised rate behind the same result is about 1.02% a year, because $15,000 divided by $10,000 is 1.50, and the 40th root of 1.50 is about 1.0102. As a lifetime result, that is weak: 50.00% spread over 40 years means the money barely grew each year, and if prices rose faster than about 1.02% a year on average, the final $15,000 would buy less than the original $10,000.

Who this term suits for a person: A 40-year term does not suit a person looking for a success story. Its only honest use is as a warning and a planning check: a lifetime holding that turned $10,000 into $15,000 over 40 years, about 1.02% a year, should prompt a hard review of fees, risk, tax, and whether the money was ever put to work properly, before any more years are added to the same plan.

FAQs

What is a good ROI?
There is no single good figure. Compare returns over the same period and with the same risk before deciding.

Is this personal calculator exact?
No, it is an estimate for planning only, based on the numbers you enter.

Are these figures financial advice?
No, they are estimates for planning only, not financial advice. Check with a qualified adviser for decisions involving large sums.

Is 50.00% over 40 years actually a poor return?
In yearly terms, yes: about 1.02% a year is a very low reward for 40 years. A lifetime holding should normally do far better than that, unless it was deliberately kept extremely safe. A 50.00% headline over 40 years is a warning sign, not a result to celebrate, and it should prompt a review of what the money was invested in and what it cost.

What does 1.02% a year mean for buying power over 40 years?
It means the money only just grew in cash terms. If prices rose faster than about 1.02% a year on average over the same 40 years, the final $15,000 would buy less than the original $10,000 bought at the start, despite the positive 50.00% figure. This page does not adjust for rising prices, so buying power must be checked separately before calling any 40-year result a gain in real terms.

What should a person check before trusting a 40-year ROI figure?
Check the fees and tax actually paid, whether money was added or withdrawn during the 40 years, what risk was carried, and whether the final value is before or after tax. Also check whether the $15,000 is a real final value or an estimate. A 40-year figure that passes none of those checks should not be used to judge the plan or to decide the next 40 years.

Estimates only, not financial advice. Figures are approximate and do not include all fees, taxes, or changing rates unless stated.