When it comes to investment and calculating returns many people still get it wrong. Whoever said that one plus one equals two was correct in theory; however when it comes to actuality this theory only holds true after you finish the equation. Remember when your math assignment turned into a thesis written in some foreign language? You know pre algebra, algebra then the harder math classes such as geometry, trigonometry and calculus. Well these topics are the rest of the story.

I never really started to understand the importance of math until one day I sat attentive in a seminar. It was the first time I had ever been exposed to the theory that marketing for any business is built on a geometric scale that grows both in a linear and exponential proportions. Well it hit me like a ton of bricks. I knew before I attended this seminar and right then the reassurance of the presenter’s statement that this was also true for the growth of money. Anything that has the ability to grow works in this way. Here these two examples are true in both practical application and theory for these very same reasons.

You know an annual percentage return may be the number that was grossed in performance; the net effect of your performance will be based solely on your other implicating factors such as your total gross income, business income, tax basis, tax sheltering, margin of transaction fees, as well as your compounded cost of living and inflation. You won’t have the same outcome as another individual with different circumstances; even if you both had invested equal amounts and had matching portfolio picks. Gross performance would be equal but those outside factors would equate to different results.

So your net return is the number that will get you to your destination. You need this number for a true and clear view of your path; what adjustments you need to make for both short and long term planning. Now that we have the vision of the bigger objective we can work it backward to see where improvement is needed. You'll need to analyze your current situation to take measurement of your current time lines for personal items such as your retirement, childrens college, trusts and charity contributions, cash needs with a preemptive costs basis analysis for items such as long term cash requirements, medical coverage, dental and vision care, travel, entertainment and those necessity items we dream about.

Once you have the data, facts and figures your reporting will give you the solved for X answer. With that number you can get a clear view of the amount of returns your investment needs are; hint, the longer the term of the investment the larger the returns need to be to cover long term capital principle reduction and taxation factors. The shorter the investment the larger the returns need to be for accelerated growth.
Are you starting to see a pattern here; your returns need to be large enough to cover expenses as well as having the consistency to perform in the most volatile market conditions as well as in good times.

When searching for these investment vehicles what are the key indicators you need to look for, longevity, strength, overhead reduction, tax sheltering capability and overall strong returns? Only a small handful of these vehicles have proven strong enough to make their claim to fame. Over all in the industry a ten percent ROI is an average marker, you can get fixed returns in the five to nine percent all day long.

Strong performance; commonly called millionaire rates of return because they will grow your capital much faster and create more wealth for your than the base rates. Banks typically give out zero to two percent on their checking, savings or money market accounts. Some give slightly higher your next step up is into cd's or bonds and mutual funds, again these are low risk low reward. Annuities pay fixed and variable rates in this same range.

After this you start moving in to the stock and commodity market here you can make slightly higher returns with more exposure because your betting against the company leadership, sales and performance you have no control or inside information to guide your decisions only a boring prospectus to help you try to understand how things were in the company until print date.

For more aggressive options you have both risk driven and reduced risk exposure factors involved. Personally I prefer reduced risk in most of my long term investments. This way I don't have to keep watching every second, I use compounded interest plus high rates of return with investment vehicles that provide consistent performance so that my stress as well as market risk are tremendously reduced.

Millionaire rates of return earn enough of positive return to compensate for those influences we all have to bear. Essentially millionaire rates of return are in excess of twenty percent per year. So if you can imagine your money growing three percent or twenty to thirty percent or more per year you can get the idea. It's like filling up a twelve ounce glass with water with an eye dropper or using the faucet. Which one are you going choose?

You could use a fire hose but you might blow your glass off of the counter, you could try the raging white water yet again you may lose your glass and or your entire ability to reinvest in a new glass after you lost it. You see too much or too little power in your portfolio could have an adverse effect. Your choosing of assets need to be specific to your requirements not those of a financial advisers pocket book.

Make sure you understand how everything fits together in your life before you make those critical decisions. Have you received proper education and feel comfortable that this is what type of investment you need. Make no doubt about it everyone needs to become immunized and protected from financial disaster and financial illiteracy; it's an epidemic in society that eats people alive. It's robbing them of their youth and vitality and turns everyday average people into bitter, sour and grumpy citizens miserable with the out come of their life.

All due to the choices they made about money and the choices they made handling money. You have the choice to land big huge profits or meager profits that leave you grumpy. Get your financial affairs in order know before it's too late. Make smart educated choices and learn from and like the master of profit potential on ways to hedge against capital reduction and extinction. Make the best choices you can for every situation to attract what you both want and need to prosper and grow.

Search for those hidden and less known investments then research them until you have answered all of your questions, have proof that it works for all those involved and make the choice is this right for you? Go ahead do it then wait for your performance returns to show up strong and make you proud.

Author's Bio: 

From living in his car to achievement of success Ryan Wegman has the ability to look at your financial picture, put you back on a plan and get your life back on track without losing precious time, money or sleep. Ryan is your Land Banking Specialist, The Past President of the American Cash Flow Association Chapter of the San Francisco Bay Area, Enlightened Wealth Institute graduate and Wealth from Home Based Business and Real Estate Investment Coach you've been searching for.