Definition of Return
What does the term "return" mean? What is meant by a "return"?
A "return" is the amount of profit that you make on an investment.
For instance - let's say that you invest $10,000 in shares of Microsoft. You end up buying 300 shares.

In this scenario, you would have booked a return of $10,000 ($20,000 - $10,000 original investment = $10,000 return).
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Let's look at one more scenario.
You purchase an investment property for $175,000. You spend $25,000 renovating the house, bringing your total investment up to $200,000.
After finishing the renovations, you list the property for $250,000. You quickly find a buyer who is willing to pay full price, and the deal goes through without a hitch. After paying out expenses (real estate agent, other assorted fees), you end up receiving $240,000.
In this scenario, the total return on your investment was $40,000.
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It's important to consider inflation when considering a return on an investment.
For instance - let's say that you purchase $200,000 in shares of a publicly traded company. You end up holding for 10 years and eventually sell, realizing a total profit of $10,000.
Now, inflation eroded the value of your $200,000 over the years, which made your $10,000 "return" a loss. If you had just stuck that $200,000 in the bank, you would have seen a much bigger return on your investment.
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