How Can I Get a 10% Return on Investment (ROI)? (2024)

SmartAsset Team

·4 min read

How Can I Get a 10% Return on Investment (ROI)? (1)

Understanding the concept of return on investment (ROI) is the first step to possibly generating a 10%+ return. Keep in mind, however, that a 10%+ ROI is not a guaranteed result. ROI is a financial metric widely used to measure the possibilityof gaining a return from an investment based on its past performance. It is calculated by subtracting the cost of investment from the current value of investment, then dividing it by the cost of investment. The right investment choices to achieve that type of return will depend on a number of factors such as the current conditions of the market. Navigating these calculations and investment choices can be complex, which is where consulting a professional financial advisor can be particularly helpful.

What Is Your Return on Investment?

Calculating ROI involves determining the gain from your investment relative to the cost of your investment. Let’s simplify it with an example. Assume you invested $1,500 in a venture and later, it’s worth $1,650. Your ROI is then ($1,650 – $1,500) / $1,500 = 10%. Regularly tracking your ROI can be made easier with digital tools or even the assistance of a financial advisor. They serve crucial roles in assessing the efficiency of your investment and comparing the ROI against the ROI of other investments.

Investments That Can Potentially Return 10% or More

How Can I Get a 10% Return on Investment (ROI)? (2)

Investing money wisely is a skill set that isn’t just reserved for Wall Street tycoons. With the right knowledge and strategies or the guidance of a skilled financial advisor, anyone can make strides to unlock their wealth potential and aim for a 10% return on investment. Various investment options might yield a 10%+ return. Nevertheless, it’s important to proceed with caution because past returns are not indicative of future results.

Stocks are a popular choice for many investors. For example, Apple’s stock has returned more than 898% over the past decade even if it is a bit of a unicorn stock. Investment decisions like this should be based on one’s risk tolerance, considering all factors involved. Here are some investments that have, cumulatively, returned 10% or more in the past:

None of these investments return 10%+ at all times so it’s important to check with a professional on what investments might help you best achieve your goals.

Diversifying Your Portfolio to Reach a 10% Return

Diversification is a risk management strategy that encompasses a wide variety of investments within a portfolio to potentially achieve higher returns with lower risk. A diverse portfolio could consist of 30% in a mix of value and growth stocks, 30% in index funds, 20% in bonds, 10% in real estate and 10% in alternative investments like P2P lending or commodities. However, diversification can have nearly unlimited combinations in an effort to reach your goals.

The benefits of diversification come in the balance of catching nice returns when certain investments take off while spreading your risk out as well. If one type of investment drops your entire portfolio won’t take a hit and you’ll be able to take advantage of potential strong returns with other assets. This way if one asset is returning 15% but another drops to only a 2% return, it’s still possible for your entire portfolio to reach a steady 10%+ return.

Bottom Line

How Can I Get a 10% Return on Investment (ROI)? (3)

Investing is a financial strategy that possibly can lead to substantial wealth if done correctly. Nevertheless, it’s not a guaranteed path to riches and it requires care, patience, regular reviews and possible adjustments over time. By understanding the concept of ROI, identifying potentially lucrative investment options, diversifying your portfolio and regularly checking your investments, it’s possible to unlock your wealth potential and strive for that 10%+ return on investment. Making use of professional advice from financial advisors can be beneficial in achieving your desired returns as well.

Tips for Investing

  • It can be difficult to find the right investments to meet your overall financial needs, especially if you’re not an experienced professional. With the help of a financial advisor, you can find the right balance in your portfolio to aim for a 10% return over time. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

  • You can use SmartAsset’s free asset allocation calculator to see what your portfolio might look like with your chosen risk profile.

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The post How to Get a 10% Return on Investment (ROI) appeared first on SmartReads by SmartAsset.

How Can I Get a 10% Return on Investment (ROI)? (2024)

FAQs

How to get 10% ROI? ›

Investments That Can Potentially Return 10% or More
  1. Stocks.
  2. Real Estate.
  3. Private Credit.
  4. Junk Bonds.
  5. Index Funds.
  6. Buying a Business.
  7. High-End Art or Other Collectables.
Sep 17, 2023

How to get 10 percent yield? ›

Where can I get 10 percent return on investment?
  1. Invest in stocks for the short term. ...
  2. Real estate. ...
  3. Investing in fine art. ...
  4. Starting your own business. ...
  5. Investing in wine. ...
  6. Peer-to-peer lending. ...
  7. Invest in REITs. ...
  8. Invest in gold, silver, and other precious metals.

How do you average 10% returns? ›

To calculate the average rate of return, add together the rate of return for the years of your investment, and then, divide that total number by the number of years you added together.

Is 10% ROI realistic? ›

While 10% might be the average, the returns in any given year are far from average. In fact, between 1926 and 2022, returns were in that “average” band of 8% to 12% only seven times. The rest of the time they were much lower or, usually, much higher. Volatility is the state of play in the stock market.

What is a 10% ROI? ›

This is known as the rate of return or return on investment. The rate of return is expressed as a percentage of the total amount you invested. If you invest $1,000 and get back your original investment plus an additional $100 in interest, you've earned a 10 percent return.

What does 10% ROI mean? ›

Return on Investment (ROI) is a popular profitability metric used to evaluate how well an investment has performed. ROI is expressed as a percentage and is calculated by dividing an investment's net profit (or loss) by its initial cost or outlay.

How to calculate an ROI? ›

Key Takeaways. Return on investment (ROI) is an approximate measure of an investment's profitability. ROI is calculated by subtracting the initial cost of the investment from its final value, then dividing this new number by the cost of the investment, and finally, multiplying it by 100.

How to get 15% return on investment? ›

Consider investing Rs 15,000 per month for 15 years and earning 15% returns. After 15 years, the total wealth will be Rs 1,00,27,601 (Rs. 1 crore). According to the compounding principle, if we implement these very same returns and contributions for another 15 years, the amount we accumulate grows enormously.

Is 10% dividend possible? ›

These businesses maintain prudent dividend policies, strong balance sheets, and operations that generate predictable cash flow. The top 25 high dividend stocks analyzed below possess these traits and have: A dividend yield above 4% (some as high as 10%)

What is the best place to invest money right now? ›

11 best investments right now
  • High-yield savings accounts.
  • Certificates of deposit (CDs)
  • Bonds.
  • Money market funds.
  • Mutual funds.
  • Index Funds.
  • Exchange-traded funds.
  • Stocks.
Mar 19, 2024

How much money do I need to invest to make $3,000 a month? ›

Imagine you wish to amass $3000 monthly from your investments, amounting to $36,000 annually. If you park your funds in a savings account offering a 2% annual interest rate, you'd need to inject roughly $1.8 million into the account.

What is the safest investment with the highest return? ›

Here are the best low-risk investments in April 2024:
  • High-yield savings accounts.
  • Money market funds.
  • Short-term certificates of deposit.
  • Series I savings bonds.
  • Treasury bills, notes, bonds and TIPS.
  • Corporate bonds.
  • Dividend-paying stocks.
  • Preferred stocks.
Apr 1, 2024

How much money do I need to invest to make $1000 a month? ›

A stock portfolio focused on dividends can generate $1,000 per month or more in perpetual passive income, Mircea Iosif wrote on Medium. “For example, at a 4% dividend yield, you would need a portfolio worth $300,000.

What asset gives the highest return? ›

Which investment gives high return? Investments in equity or equity-oriented instruments, such as stocks and equity mutual funds, typically offer high returns. However, they come with higher risk compared to fixed-income investments. Real estate and certain types of ULIPs can also offer high returns.

Is 100% ROI doubling your money? ›

Return on Investment (ROI) is the value created from an investment of time or resources. Most people think of ROI in terms of currency: you invest $1,000 and you earn $100, that's a 10% return on your investment: ($1,000 + $100) / $1,000 = 1.10, or 10%. If your ROI is 100%, you've doubled your initial investment.

How can I calculate ROI? ›

You may calculate the return on investment using the formula: ROI = Net Profit / Cost of the investment * 100 If you are an investor, the ROI shows you the profitability of your investments. If you invest your money in mutual funds, the return on investment shows you the gain from your mutual fund schemes.

How to get 12 percent return on investment? ›

How To Get 12% Returns On Investment
  1. Stock Market (Dividend Stocks) Dividend stocks are shares of companies that regularly pay a portion of their profits to shareholders. ...
  2. Real Estate Investment Trusts (REITs) ...
  3. P2P Investing Platforms. ...
  4. High-Yield Bonds. ...
  5. Rental Property Investment. ...
  6. Way Forward.
Jul 20, 2023

What is a good ROI in 10 years? ›

The average annual return for the S&P 500, when adjusted for inflation, over the past five, 10 and 20 years is usually somewhere between 7.0% and 10.5%. This means that if your portfolio is returning better than 10.5%, you have a good ROI.

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