"I made 50% on that investment" is a statement missing its most important detail. 50% over 6 months and 50% over 6 years are completely different outcomes wearing the same headline number.
£10,000 growing to £15,000 is a 50% total return, full stop, regardless of how long it took. Annualised, that same 50% means very different things:
| Time taken | Annualised return |
|---|---|
| 1 year | 50.0% |
| 3 years | 14.5% |
| 7 years | 6.0% |
| 15 years | 2.7% |
A 50% return over 15 years is barely ahead of inflation. The identical headline number, over 1 year, would be an exceptional result. Total return alone can't tell these apart — only the annualised figure can.
The £10,000-to-£15,000, 3-year example annualises to 14.47%/year — genuinely strong. But strong compared to what? Against a 5% benchmark (a decent savings rate), the same £10,000 would have reached £11,576 over 3 years. The investment beat that by £3,424 — the number that actually tells you whether the risk was worth taking.
Enter your numbers and compare directly against a savings account or index fund benchmark.
Use the ROI Calculator →