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birb_cromble  7d ago (text post)   758 thread views

Weekly Finance Thread - 2027-07-04

A weekly thread to discuss financial matters - from personal all the way up to global.

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I am not a math person at all but I believe you could interpret 2rafa's wording in two different ways. She said:

Taking stock, in 12 years, more or less in diversified primarily-US and some global equities, with reinvestment, I made 400%

This either means that you went from, say, $100 and ended up with $400 (a four hundred percent return) or you started with $100 and ended up with $500 (a total return of 400% on top of your original principal).

The first gives you 12% the second gives you 14.34%.

$100 and ended up with $400 (a four hundred percent return)

That is not a 400% return or +400% at all. It is +300%.

There is only one correct usage and interpretation. A return is what you end up with on top of your principal.

A 100% return is the baseline "doubled your money" case. I think you understand that a "1x", ending up at the same principal you started with, is not at all a "100% return". It is 0% return (gain).

Count upwards:

+0% is 1x. +100% is 2x. +200% is 3x. +300% is 4x. +400% is 5x.

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