How much do fees actually matter?

A lot over time. $100k at 7% for 30 years: $761k. Same with a 1% fee dragging return to 6%: $574k. The 1% fee cost you $187k.

Is the Rule of 72 accurate?

Close enough for quick mental math at rates between 5-15%. At 8%: 72/8 = 9 years (true: 9.0). At 12%: 72/12 = 6 years (true: 6.1).

Should I include dividends in returns?

Yes — total return includes price appreciation plus reinvested dividends. SEC and CFA Institute both define investment performance using total return, not price return alone. Long-term US large-cap dividends contribute roughly a third of total return.

What's a money-weighted vs time-weighted return?

Time-weighted (used in fund prospectuses) ignores cash-flow timing and measures pure manager performance. Money-weighted (IRR) reflects when YOU added or withdrew money. The CFA Institute Global Investment Performance Standards (GIPS) require time-weighted reporting for funds.

How much do fees actually matter?

A lot over time. $100k at 7% for 30 years: $761k. Same with a 1% fee dragging return to 6%: $574k. The 1% fee cost you $187k.

Is the Rule of 72 accurate?

Close enough for quick mental math at rates between 5-15%. At 8%: 72/8 = 9 years (true: 9.0). At 12%: 72/12 = 6 years (true: 6.1).

Should I include dividends in returns?

Yes — total return includes price appreciation plus reinvested dividends. SEC and CFA Institute both define investment performance using total return, not price return alone. Long-term US large-cap dividends contribute roughly a third of total return.

What's a money-weighted vs time-weighted return?

Time-weighted (used in fund prospectuses) ignores cash-flow timing and measures pure manager performance. Money-weighted (IRR) reflects when YOU added or withdrew money. The CFA Institute Global Investment Performance Standards (GIPS) require time-weighted reporting for funds.

Investment Return Calculator

Total return, annualized return (CAGR), and dollar gain — with optional IRR mode for regular contributions.

Result

Annualized return (CAGR)

9.86%

compound annual growth rate

Total return (on total contributed)60.00%
Dollar gain$6,000.00
CAGR after feessubtracting 0.10% annual fee drag9.76%
Investment doubled in7.3 years (Rule of 72)

Above bond average, below stock average

Your CAGR (gross)

9.86%

Your CAGR after 0.10% fees

9.76%

S&P 500 long-run average (1928–2024)

nominal, including dividends

~10.5%

10-year US Treasury long-run avg

~4.5%

Long-run US inflation (CPI)

real return = CAGR − inflation

~3%

Real (after-inflation) CAGR

purchasing-power growth

6.86%

Source: CAGR formula = (FV/PV)^(1/n) − 1; benchmarks per Damodaran NYU Stern historical returns

Not financial advice — Past returns do not predict future results. Compare investments only over identical time periods, and adjust for fees, taxes, and inflation when judging real performance.

How to use this calculator

Enter what you invested and what it's worth now (or sold for).
Type how many years you held it (decimals OK — 1.5 = 18 months).
Add the annual fees — typical index fund: 0.03-0.10%, actively managed: 0.5-1.5%.

About this tool

Two return numbers most people confuse: total return (raw % gain since you bought) and CAGR (compound annual growth rate — what your money actually earned per year on average). For investments held more than a year, CAGR is the apples-to-apples number you want. This calculator shows both, plus the brutal effect of annual fees: a 1% expense ratio over 30 years can eat 30% of your final balance. The "Rule of 72" line is a useful shortcut — divide 72 by your annual return to estimate doubling time.

How it works — the formula

Total return = (final − initial) / initial
CAGR = (final / initial)^(1 / years) − 1
IRR: rate r such that  Σ CFₜ / (1+r)ᵗ = 0

Total return is the simple percentage gain. CAGR (compound annual growth rate) annualizes that gain assuming smooth compound growth — useful for comparing investments over different horizons. Internal Rate of Return (IRR) is the discount rate that zeroes out the net present value of all cash flows, the standard money-weighted measure when contributions and withdrawals happen at different times.

Sources: SEC Investor.gov — Understanding investment performance · CFA Institute — Global Investment Performance Standards (GIPS) 2020 · Bogle JC — Common Sense on Mutual Funds (Wiley, 1999), Chapter 9 on costs and returns

Worked examples

Example 1

Simple total return

Inputs:: initial = $10,000, final = $14,500, years = 5
Output:: Total return = 45.0%; CAGR ≈ 7.71%

Example 2

Doubling time (Rule of 72)

Inputs:: rate = 8%
Output:: 72 / 8 ≈ 9 years (exact: ln(2)/ln(1.08) ≈ 9.006)

Example 3

Cost-of-fees comparison

Inputs:: $100k for 30 years at 7% gross
Output:: No fee → $761,226; 1% fee (6% net) → $574,349; the fee cost ≈ $186,877

Limitations

CAGR smooths over volatility; two investments with identical CAGR can have very different drawdowns and risk.
Past returns are not predictive — equity premiums vary by decade.
Fees, taxes, and inflation are not subtracted unless you input net or real rates.
IRR can produce multiple valid solutions when cash flows change sign more than once.

Return calculations are illustrative. This calculator does not provide investment advice — past performance does not guarantee future results, and all investing involves risk of loss.

Frequently asked

Total return is the raw % gain. CAGR smooths it into "what % per year would I need to earn to get this result." For 1-year holds they're the same; for multi-year holds CAGR < total return because of compounding.