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 :)

To support the channel, give me a minute (see what I did there?) of your time by visiting OneMinuteEconomics.com and reading my message.

Bitcoin donations can be sent to 1AFYgM8Cmiiu5HjcXaP5aS1fEBJ5n3VDck and PayPal donations to oneminuteeconomics@gmail.com, any and all support is greatly appreciated!

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

https://www.patreon.com/oneminuteeconomics

Interested in reading a good book?

My first book, Wealth Management 2.0 (through which I do my best to help people manage their wealth properly, whether we're talking about someone who has a huge amount of money at his disposal or someone who is still living paycheck to paycheck), can be bought using the links below:

Amazon - https://www.amazon.com/Wealth-Management-2-0-Financial-Professionals-ebook/dp/B01I1WA2BK

Barnes & Noble - http://www.barnesandnoble.com/w/wealth-management-20-andrei-polgar/1124435282?ean=2940153328942

iBooks (Apple) - https://itun.es/us/wYSveb.l

Kobo - https://store.kobobooks.com/en-us/ebook/wealth-management-2-0

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.

Amazon - https://www.amazon.com/Age-Anomaly-Spotting-Financial-Uncertainty-ebook/dp/B078SYL5YS

Barnes & Noble - https://www.barnesandnoble.com/w/the-age-of-anomaly-andrei-polgar/1127084693?ean=2940155383970

iBooks (Apple) - https://itunes.apple.com/us/book/age-anomaly-spotting-financial-storms-in-sea-uncertainty/id1331704265

Kobo - https://www.kobo.com/ww/en/ebook/the-age-of-anomaly-spotting-financial-storms-in-a-sea-of-uncertainty

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

https://www.facebook.com/oneminuteeconomics

https://twitter.com/andreipolgar

https://ro.linkedin.com/in/andrei-polgar-9a11a561