How to Use the Investment Return Calculator

Enter the amount initially invested, the current or final investment value and the length of time the investment was held.

If you added more money after the initial investment, enter the total additional contributions. You can also enter investment withdrawals, distributions or income already received and any investment fees you want included in the calculation.

The calculator estimates:

• Total capital invested;
• Total investment gain or loss;
• Absolute percentage return;
• Annualised return;
• Investment multiple;
• Return after entered fees;
• Economic value received from the investment; and
• An illustrative annual growth schedule.

What Is Investment Return?

Investment return measures the amount gained or lost relative to the money invested.

A positive investment return means the investment has generated more economic value than the capital contributed, while a negative return means the investment value has fallen below the amount invested after the adjustments being modelled.

Investment Return Example

How Is Investment Return Calculated?

A simple total return calculation compares the investment’s net economic value with the total capital contributed.

This percentage tells you how much the investment gained or lost relative to the amount of money contributed.

What Is Annualised Return?

Annualised return converts a multi-year investment result into an equivalent average compounded yearly rate.

A common form of annualised return is the compound annual growth rate, or CAGR.

The result is shown as a percentage per year.

What Is CAGR?

CAGR stands for Compound Annual Growth Rate.

It represents the constant annual compounded return that would be required for an investment to grow from the starting economic value to the ending economic value over a particular period.

CAGR is useful for comparing investments held for different lengths of time.

Absolute Return vs Annualised Return

Absolute return

Absolute return measures the total percentage gain or loss over the entire investment period.

Annualised return

Annualised return expresses the result as an equivalent compounded yearly percentage.

For example, a 30% total return over five years is not the same as a 30% return per year.

What Is Investment Multiple?

Investment multiple compares the net economic value of the investment with the total capital contributed.

For example:

• 1.0× means value equals invested capital;
• 1.5× means economic value is 1.5 times invested capital;
• 2.0× means economic value is twice invested capital; and
• 0.8× means the investment value is below total capital invested.

How Do Additional Contributions Affect Return?

Additional contributions increase the amount of capital you have invested.

A common mistake is to treat every increase in account value as investment profit.

For example, if an investment increases from $50,000 to $70,000 but you personally added another $15,000 during that period, the actual investment gain is much smaller than the apparent $20,000 increase in account value.

This calculator therefore separates:

• Initial investment;
• Additional contributions; and
• Investment gain or loss.

How Do Withdrawals Affect Investment Return?

Withdrawals can represent value already received from the investment. Examples may include:

• Cash distributions;
• Dividend withdrawals;
• Partial sale proceeds;
• Rental or investment cash distributions; or
• Other investment proceeds.

If money has already been withdrawn from an investment, ignoring it could understate total investment performance.

Should Investment Fees Be Included?

Fees reduce the economic return earned by the investor.

Depending on the investment, costs may include:

• Management fees;
• Platform fees;
• Brokerage;
• Financial advice fees;
• Fund administration fees;
• Property management costs; or
• Other transaction expenses.

This calculator lets you enter total investment fees so the net return can be estimated after those costs.

Gross Return vs Net Return

Gross return normally refers to investment performance before selected costs, while net return reflects costs deducted from investment value.

For personal decision-making, net return can often provide a more useful measure because it reflects more of the investor’s actual economic result.

Investment Return vs Compound Interest

The Investment Return Calculator and Compound Interest Calculator answer different questions.

Investment Return Calculator

Use this when you know the actual starting and ending values of an investment and want to measure performance.

Compound Interest Calculator

Use the Compound Interest Calculator when you want to project how money might grow in the future using an assumed interest or return rate.

Investment Return vs ROI

ROI stands for Return on Investment and is often used as another term for percentage investment return.

Different industries may define investment cost and profit differently, so it is important to compare calculations using consistent assumptions.

Can This Calculator Be Used for Shares?

Yes. It can be used as a simple return calculator for shares where you know:

• Purchase cost;
• Additional investments;
• Current or sale value;
• Dividends withdrawn; and
• Investment fees.

However, it does not calculate franking credits, capital gains tax or transaction-by-transaction returns.

Can This Calculator Be Used for Property?

It can provide a high-level property investment return estimate if you treat your invested cash as capital and include relevant proceeds and costs.

However, detailed property analysis may also require:

• Rental income;
• Mortgage interest;
• Property management fees;
• Rates;
• Insurance;
• Maintenance;
• Stamp duty;
• Capital gains tax; and
• Buying and selling costs.

For ongoing property income analysis, use the Property Cash Flow Calculator.

Can This Calculator Be Used for Cryptocurrency?

Mathematically, yes. You can compare total money invested with current or realised value.

However, cryptocurrency returns can be highly volatile and tax treatment may depend on transaction history and individual circumstances.

Does This Calculator Include Tax?

No.

The calculator does not automatically include:

• Capital gains tax;
• Income tax;
• Dividend tax treatment;
• Franking credits;
• Negative gearing;
• Foreign tax;
• Superannuation tax; or
• Other investment-specific tax rules.

What Is a Good Investment Return?

There is no single investment return that is appropriate for every investment.

Expected returns can differ substantially depending on:

• Investment type;
• Risk;
• Time horizon;
• Inflation;
• Fees;
• Tax;
• Market conditions; and
• Liquidity.

A higher historical or expected return can also involve greater risk of loss.

Why Annualised Return Is Useful for Comparing Investments

Suppose Investment A earns 20% over two years while Investment B earns 25% over five years.

Looking only at total return can make Investment B appear better, but annualising the returns provides a more consistent basis for comparing their average compounded performance.

Even annualised return does not capture every aspect of investment quality, including volatility and risk.

Investment Return Calculator Assumptions

This calculator assumes:

• Total additional contributions are treated as invested capital;
• Withdrawals are treated as economic value already received;
• Fees entered reduce investment value;
• No tax is included;
• No inflation adjustment is applied;
• Cash-flow timing is not fully modelled;
• Annualised return is a simplified CAGR-style estimate;
• The illustrative yearly schedule assumes a constant annualised return; and
• Results are mathematical estimates rather than investment advice.

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