The Return On Investment (ROI) in One Minute: Definition, Explanation, Examples, Formula/Calculation

You literally hear the term "Return On Investment" or "ROI" all the time whenever someone is analyzing an investment... but what does it actually mean?

Through this video, I've provided not just a definition of the ROI but also a detailed ROI explanation, including examples as well as the return on investment formula for your calculation needs.

As you'll be able to find out, just like any other metric, the return on investment has its limitations.

For example, the ROI doesn't factor in the time dimension. In other words, an ROI of x% might be great if you only had to wait three years but if you had to wait ten times more... not so much :)

All in all, the return on investment is definitely a tool you cannot afford not to include in your knowledge bag and it can be ridiculously useful, as long as you always understand what and why you're measuring :)

Oh and I've also started playing around with Patreon, my link is:

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My second book, the Wall Street Journal and USA Today bestseller The Age of Anomaly (through which I help people prepare for financial calamities and become more financially resilient in general), can be bought using the links below.

Last but not least, if you'd like to follow me on social media, use one of the links below:

[OneMinuteEconomics]

GiganticWebsites.com is a project through which I make it possible for people to build truly gigantic websites (thousands of articles each!) at ridiculously low prices. If you have a great domain you want to turn into an amazing website or an existing site you'd like to upgrade/scale, visit our website or check out the One Minute Economics presentation video below:


Please note that this comment is not an ad for a third-party service provider. GiganticWebsites.com is my baby 100% and I will personally be involved in each and every project so as to ensure the website turns out great :)

[Oliver-Lucas]

I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.

[frenchie_at_heart]

Thank you so much for this simple video!

[Khanmuneeb]

It's my exam in some days and this is so helpful thanks mate

[Lhtning]

very quick and yet it makes some sense.

[jaycifa]

this can be used in real life whereas other methods and calculations videos make it more complicated for a normal guy like me

[pingerfrints]

i have a question if you advertise your product on youtube by $1000 then what is your return investment?

[sergeb]

Could you speak slower please ?
I am an English learner from France.
If no, never mind.
Thank you

[OneMinuteEconomics]

If you liked this video, I think you'll love my personal finance book (Wealth Management 2.0) that has been written specifically for today's ultra-complex investment landscape and is available over at:

[AnaAraujo-LifeNaAmerica]

If someone is trying to learn about a particular subject, speaking that fast will not help at all.

[Darfaultner]

I think we know what he was about to measure

[thomasmcintosh]

I like how you assume everyone knows how to turns decimals into percentages...
I got another video to watch 😢

[foodmens]

quick question, are you Jewish? I asked because i saw a candle on the coin you illustrated

[legendarynoob]

Jew coin? Really? You literally sound like Neil Goldman from Family guy.

[PVlmsGangte]

Can u please talk slowly please I could not catch up properly ...