The earliest questions we got back when we were starting this meetup was computing yields or return on investment.
Gross Annual Return = (Monthly Income x 12)/Total Investment
- Monthly income can be rent, net income after taxes, or your capital gain after selling something you own net of what you spent to acquire it.
- Total investment are the sum total of your purchase price of real estate or your total assets in the business
Nuances and specifics exist of course, but this base formula would serve well as your comparison.
But the most important thing to remember is the PROBABILITY of such monthly income.
Never forget that income is more often that not NEVER a sure thing, and that there are variations on a monthly, even daily basis for most investments. In the modern world, the only sure thing might be government notes/bonds, but that’s another topic you should be exploring.
Adjust your computations accordingly. Make sure it makes sense according to what’s really happening.