After-Tax Return On Investment

The After Tax return on investment is likely the most important amount of money for an investor to know of any investment. In general, the return on investment, shortened as ROI, is the amount you receive after you make an investment into something, such as a business, and that investment returns a profit. The ROI expresses the return as a percentage of the original investment. However, what some novice investors forget to consider are the tax implications of making an investment. On almost any investment,the United States requires that its owner pays tax. Naturally, the tax comes from that person, indirectly subtracting from the worth of an investment's return. In investing language, therefore, the after-tax return tells the investor the amount of a return that a person actually recieves after taxes have been paid.

Fast Facts

  • Like the regular return of investment, the after-tax may be annualized to show return per year, which is useful since taxes are yearly

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