Transparent method
The formula
Worked example
Example inputs
How to interpret the result
Total return including cash income received along the way and net gain measured purely on price change can tell two different stories about the identical holding, because a position that pays meaningful dividends or interest can post a solid total return even while its price alone barely moved.
Before you rely on it
What to check
Confirm whether a return figure you're comparing against includes cash income or only price appreciation, since combining the two inconsistently across different investments distorts the comparison.
The common error
Where people go wrong with investment return calculator
Comparing one investment's total return, income included, against another's raw price appreciation alone. The two aren't the same measurement, and a dividend-paying holding can look artificially weaker next to price-only figures for a non-paying one.
Sensitivity evidence
How cash income received changes the total return
| Cash income received | Total return | Net gain |
|---|---|---|
| $480 | 29.9% | $4,480 |
| $540 | 30.3% | $4,540 |
| $600worked example | 30.7% | $4,600 |
| $660 | 31.1% | $4,660 |
| $720 | 31.5% | $4,720 |
Every input, tested
Which input moves the total return most
| Input | Tested from | To | Total return at each end | Swing |
|---|---|---|---|---|
| Ending value | $17,100 | $20,900 | 18.0% to 43.3% | 25.3% (83%) |
| Total amount invested | $13,500 | $16,500 | 45.2% to 18.8% | 26.4% (86%) |
| Cash income received | $540 | $660 | 30.3% to 31.1% | 0.800% (2.6%) |
Two variables at once
Total return by cash income received and total amount invested
| Cash income received \ Total amount invested | $12,000 | $15,000 | $18,000 |
|---|---|---|---|
| $480 | 62.3% | 29.9% | 8.2% |
| $540 | 62.8% | 30.3% | 8.6% |
| $600 | 63.3% | 30.7% | 8.9% |
| $660 | 63.8% | 31.1% | 9.2% |
| $720 | 64.3% | 31.5% | 9.6% |
Step by step
The worked example, input by input
| Input | Value used |
|---|---|
| Total amount invested | $15,000 |
| Ending value | $19,000 |
| Cash income received | $600 |
| Total return | 30.7% |
| Net gain | $4,600 |
Where the inputs come from
Total amount invested is what you paid in, including purchase fees. Ending value is what the investment is worth now or what you sold it for, after selling costs. Cash income received covers dividends, interest or rent collected along the way and belongs in the return, since leaving it out understates performance. Use actual statement figures. If you added money at several dates, this tool is too simple and the IRR or XIRR calculator fits better.
When the result stops applying
A simple total return ignores how long you held the investment, when the cash arrived and what taxes and inflation took. It also cannot compare two investments with different contribution schedules fairly. Dividends reinvested versus taken as cash make no difference to the total here, though they change the path. For property or business investments, add the costs of carrying them.
What to compare it with
Turn the total into a yearly figure with the CAGR or annualized return calculator, then compare with what a simple index fund earned over the same period. After-tax return matters too, so run the gain through the after-tax investment return calculator. If you invested in several installments, the money-weighted return page handles the timing properly.
People also ask
Frequently asked questions
Should dividends be included in my return?
Yes. Dividends and interest are part of what the investment paid you, so leaving them out understates the return. On the example, the $600 of income adds four percentage points to the result.
Is a 30% return good?
It depends entirely on the time. Thirty percent over one year is excellent, but over eight years it is about 3.4% a year, which is below many savings accounts. Always convert to an annual rate before judging it.
Does this include taxes?
No. The result is before tax, so your after-tax gain will be lower, especially if you held the investment for less than a year and short-term rates apply.