Can you have 100% ROI?

Understanding Return on Investment

When people talk about making money, you will often hear the term ROI, which stands for return on investment. It is essentially a simple way to measure how well a financial choice has paid off compared to what it originally cost.

To figure this out, you take the net profit you earned and divide it by the initial cost. For instance, if you put $100 into a project and clear a profit of $100 on top of getting your original money back, your math comes out to 1, or a 100% ROI.

Achieving a 100% return means you have effectively doubled your money—your net profit equals the exact amount you originally spent. While hitting numbers like this sounds exciting, every investment carries different levels of risk, and higher returns usually mean you are taking on a bigger gamble.