When you first start learning to invest, using a Rate of Return Calculator can be eye opening. Earning an annual rate of return of 6%, 7%, or 8% can be the difference of millions of dollars in net worth over the course of your life. While there is risk involved with every investment, creating generational wealth in the stock market is a risk every financially forward-thinking citizen should do.
I remember when I discovered the power of compounding interest by using a Rate of Return Calculator. I remember thinking, “what am I waiting for?” Then I remember thinking, “Ok, how do I actually make this happen?” There is a lot to consider when achieving your target rate of return. That is why most rate of return calculators can only take you so far.
Fortunately, we have a solution for you.
Rate of Return is the net gain or loss of your investment over a period of time. The rate of return is measured as a percentage of appreciation or depreciation depending on what the asset returns. The formula to calculate the Rate of Return is as followed.
If you are using Rate of Return to calculate the pure return on an investment, you must use the simple rate of return. A Simple Rate of Return does not incorporate inflation which can have an impact on an initial investment, making worth more or less depending on the inflation rate at the time of investment.
Using a Rate of Return Calculator or better yet, an Annual Rate of Return Calculator is an good way to see how much money you would make on an investment at a consistent percentage of return. For instance, you can calculate rate of return on an individual stock, bond, or an entire portfolio.
Using the formula above, we can see how rate of return is calculated.
So, here you can see how rate of return is calculated as a percentage.
Using a Rate of Return Calculator or Annual Rate of Return Calculator is a great way to see the potential of an investment. But most Rate of Return Calculators only give you a snapshot in time into the potential of an investment. They don’t really tell you how the rate of return of an investment can impact other parts of your life.
Realizing the rate of return of an investment can have widespread effects on other parts of your financial wellbeing such as:
Improving all of these elements are crucial to improving your path to financial independence.
That is why we created a calculator that not only shows you the Annual Rate of Return of an investment but how that rate of return impacts the other facets of your life.
We call it our Financial Independence Calculator.
The Wealthplicity Financial Independence Calculator is much more than a calculator. It is an interactive tool designed to do 3 things:
Allow you to select and prioritize your financial goals across the timeline of your choosing
Get a clear picture of the financial path you are currently on, showing your projected net worth, the total amount of debt you will pay, and your projected savings and investments across your entire timeline
Provide you with a new, optimal path forward, allowing you to achieve your financial goals as efficiently as possible while building toward your maximum net worth at the end of your goal timeline
It is actually a Debt Calculator, Net Worth Calculator, Mortgage Calculator and Compounding Interest Calculator all rolled into one easy to use system and specifically tuned to the financial goals of the user.
Your financial future is not linear. And neither is our Financial Independence Calculator. It won’t just show you how long it will take you to pay off your debt, it will show you the most efficient way to use your money to achieve your goals while paying the least amount of debt interest possible.
And instead of just telling you to “add more money to your investments” to achieve greater Net-Worth, it will show you exactly what steps you need to take to maximize your Net Worth while you achieve your financial goals as efficiently as possible.
Begin by mapping your financial goals. Whether, you want to pay off your debt, buy a house, or retire early, simply select an icon, provide a few details about your goal and then add it to your timeline
Create your financial starting point. Answer a few general questions about your current financial situation so our system can accurately create your financial starting point. Our system will then use both your financial starting point and your goal details to create your optimal path to financial freedom
Access your Results Page and Your Step-By-Step Action Game plan. Our system will show you exactly what your Net Worth will be, how much debt you will pay, and how much you stand to earn on your savings and investments based on your current financial situation and future goals.