Net Investment Gain Calculator

The net investment gain formula (with plain-English meaning)

The phrase “investment gain” is often used in a casual way: people look at a chart and say, “My account is up $4,000.” But that raw increase can be misleading because it mixes two different things: the market’s impact on your money and the extra cash you added along the way. That’s why “net investment gain” is best defined as a cash‑flow equation: it compares everything that went into the investment versus everything that came out of it (including what is still invested at the end).

This calculator uses a simple framework that works for brokerage accounts, retirement accounts (401(k), IRA), and even many alternative portfolios. It’s also the easiest way to tell the story of your results without needing a spreadsheet or the exact date of every deposit.

Step 1 — Total invested. Think of this as “how much of my money was put to work?”

• Total Invested = Starting Value (SV) + Contributions (C)

If you started with $10,000 and added $3,000, then you had $13,000 of your own money invested in total. (This calculator treats contributions as “principal” because they were your decision and not profit.)

Step 2 — Total returned. This is everything you got back from the investment.

• Total Returned = Ending Value (EV) + Withdrawals (W) + Cash Distributions (D)

Including withdrawals is important. If you withdrew $2,000 and your ending value is $15,800, your total returned isn’t just $15,800 — it’s $17,800 (because you already pulled out $2,000 earlier). Without counting withdrawals, you can accidentally understate your profit.

Step 3 — Costs (optional). Some people want “profit before costs,” and others want “profit I kept.”

• If you pick Deduct costs: Costs = Fees (F) + Taxes (T)
• If you pick Already reflected: Costs = 0 (to avoid double‑counting)

Fees and taxes are tricky because sometimes they are removed directly from the account value, which means your ending value already includes the effect. If that’s your situation, you should choose “already reflects” so the calculator doesn’t subtract the same costs twice.

Step 4 — Net gain. This is the “true profit” number.

• Net Investment Gain = (EV + W + D) − (SV + C) − Costs

If the result is positive, you had a net gain (profit). If it’s negative, you had a net loss. Either way, it’s a clean answer that accounts for money in and out.

Net return %. Percent return is useful because it lets you compare different investment sizes.

• Net Return % = Net Gain ÷ (SV + C) × 100

This percentage is practical: it says “relative to everything I put in, what percentage did I make?” It’s not a perfect performance measure when deposits happen throughout the period, but it is excellent for real‑life planning.

CAGR (annualized return). People often want an annual number even when the time period isn’t exactly one year.

For a one‑time investment with no deposits, CAGR is exact: CAGR = (Final / Initial)^(1/Years) − 1. With contributions/withdrawals, the exact answer requires IRR/XIRR (cash‑flow timing). This calculator instead uses a reasonable approximation: it estimates a growth multiple based on total invested vs effective returned, then annualizes it.

• Growth Multiple ≈ (Total Returned − Costs) ÷ Total Invested
• Approx. CAGR ≈ (Growth Multiple)^(1/Years) − 1

Bottom line: net gain is the best “how much did I make?” number, while CAGR here is a helpful headline for comparison. If you need broker‑grade performance reporting for heavy cash‑flow timing, use an IRR/XIRR calculator.

What to enter (and what most people get wrong)

Most confusion happens because people mix reinvested income with cash income, or they forget to include withdrawals. Here’s a simple guide you can use every time.

• Starting value: the account value at the beginning of your chosen period (or the amount you initially invested).
• Ending value: the account value at the end of your chosen period (what the account is worth now).
• Contributions: total extra cash you added during the period (monthly deposits, lump sums, additional buys).
• Withdrawals: total cash you took out during the period (partial sells, distributions you withdrew, cash-outs).
• Dividends/interest (cash): only enter if you received income as cash that is not already inside your ending value.
• Fees/taxes: optional fields for “net‑of‑cost” profit (what you kept).
• Years: period length in years (for annualized return). If you know months, divide by 12.

The most common mistake: entering dividends even though they were reinvested. If dividends were reinvested, your ending value already includes them. In that case, leave distributions at 0. Only enter distributions if the cash left the account and went to you.

Another common mistake: forgetting withdrawals. Withdrawals reduce the account value, so leaving them out can make you think your profit is smaller than it really was. Net gain includes withdrawals so the “total returned” is accurate.

Worked examples (copy these to sanity-check)

Example 1 — Simple case: SV = 10,000, EV = 15,800, years = 3.

• Total invested = 10,000
• Total returned = 15,800
• Net gain = 5,800
• Net return = 58%
• Approx. CAGR ≈ (1.58)^(1/3) − 1 ≈ 16.4%/yr

Example 2 — You contributed during the period: SV = 10,000, C = 3,000, EV = 15,800.

• Total invested = 13,000
• Total returned = 15,800
• Net gain = 2,800
• Net return ≈ 21.5%

Notice the story changes: the account increased by 5,800, but true profit is 2,800 because you added more money.

Example 3 — You withdrew money: SV = 10,000, C = 3,000, EV = 15,800, W = 1,000.

• Total returned = 15,800 + 1,000 = 16,800
• Total invested = 13,000
• Net gain = 3,800

Withdrawals are part of your results. Including them gives a fair profit estimate.

Example 4 — Include fees and taxes: Add F = 45 and T = 120.

• If you select “Deduct them,” costs counted = 165, so net gain is reduced by 165.
• If your ending value already reflects these costs, select “Already reflects” so you don’t subtract twice.

Frequently asked questions

• Is net investment gain the same as profit? Practically, yes: it’s the “profit/loss” number after accounting for money in and out. You can also deduct fees/taxes if you want net-of-cost profit.
• Why can my gain be negative? If total returned is less than total invested (or costs are large), you have a net loss. That’s normal and helpful information.
• Does this handle exact timing? Net gain handles totals well. Annualized return is approximate if you had many deposits/withdrawals. For timing-precise performance use IRR/XIRR.
• Does it include inflation? No. For inflation-adjusted performance, use a real return or inflation-adjusted return calculator.
• Can I use this for crypto? Yes, as long as you can estimate starting value, ending value, and cash flows. Taxes/fees can be added if desired.

Disclaimer: This calculator is for educational use only and does not provide investment, tax, or legal advice.