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Return on Investment

Posted by & filed under Starting a Business in Nevada.

return-on-investment1Attention All Business Owners:

A simple formula to calculate your ROI (or return on investment) is the following:

(Gain from investment – Cost of investment) / (Cost of investment)

Gains from investment are things like revenue from a business, rental revenue, or proceeds from a sale. Costs of investments are things like overhead, compensation, repair expense, and taxes. The resulting number constitutes your ROI, which should generally beat inflation (or 3%) and approach returns from the stock market.

With investments in the stock market averaging 10.582% during the 20th century as a whole, any ROI that exceeds 10.582% is considered absolutely fantastic. Track your ROI year-after-year and wait until the investment is completely paid off (usually after a few years). Then, sit back and enjoy your passive income.

Don’t forget to consult your favorite attorney, financial adviser and CPA to achieve YOUR MAXIMUM FINANCIAL SUCCESS!!!