What Is A Roi (Return Of Investment)}

Submitted by: Linus Xavier

Analyzing ROI, or Return on Investment, is one of the most important things that you can do to evaluate the consequences of a financial investment or decision. ROI analysis is used when deciding whether or not to invest in the stock market, bonds or any other financial decision, including starting a business. It is extremely important to know what the return of investment is, to determine whether or not the decision is sound. Learning how to do a proper ROI analysis can help you to determine whether or not you want to make the investment.

Return of Investment analysis takes many forms but most work by figuring out a ratio, or percentage to use. Anytime that a ROI is more than 0.00 for ration, or a percentage greater than zero percent on percentages that means that the investment will return more than it initially costs. This tiny number is often how financial experts come up with which investments to go with, and your financial adviser may recommend a certain investment simply because it offers a better ROI, even if it is only better by a very small ratio or percentage.

However, one thing that you should keep in mind is that while ROI is a great way to analyze investments, it does not tel you how risky the investment will be. This has nothing whatsoever to do with the return of investment ratio, because the ROI simply predicts what the investment will return if it performs as you think it will. There is still a risk of investing and that can be calculated differently. Other financial measuring tools such as Net Present Value and Internal ROR (rate of return) also do not calculate the risk.

Learning how to use ROI for investments is fairly simple if you can do some math. Basically, it is the return divided by the cost of the action, which is the simple way to do it. For instance, if you invested $100,000 into an advertising campaign that will probably bring in additional revenue of $180,000 then your simple ROI would be 1.8, or one and a 8/10 return on your investment. In percentages that would be 180% return on your investment. This is obviously a very good return, as it is almost $100,000 in profit from that advertising campaign.

Knowing the ROI of an investment does not mean that the investment is sound however. It is only part of the story. There are many financial metrics such as Net Present Value or NPV, Internal Rate of Return (IRR) and payback period. Each one tells a different part of the story as well as the risk of the investment and several other factors. A professional investment consultant is needed to determine whether or not an investment is a good idea. Finding a qualified Fort Worth Financial Adviser is important to protect your money.

Fort Worth Retirement Planning Company, RWMG is a Wealth Management Firm in Fort Worth, Texas, dedicated to providing access to the high-quality investment products & sound asset allocation strategies. We focus on retirement investment strategies for individual high net-worth investors and business clients.

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Federal Reserve Ruling On Overdraft Fees 3 Key Points

By Larry Donaldson

Overdraft fees. The words strike fear and loathing into the hearts of bank customers everywhere Also called overdraft charges or NSF fees, they result whenever you make a charge, write a check or withdraw money from a checking account that has too low of a balance to cover the pending withdrawal.

Of course, in the old days of banking, when you didn’t have enough money in your account to cover a charge, your bank simply rejected it while you were still at the merchant. But, today we live in the era of overdraft protection programs. These cleverly-named programs protect the customer from being embarrassed at a store, restaurant, or gas pump for having too low of a balance to cover a charge.

At the same time, for over a decade these programs have also done a great job of “protecting” the profits of banks: to the tune of $25-$30 billion per year in the U.S. alone. In theory, these programs protect bank customers. But, the way they are operated by banks means that in reality they are slanted toward benefitting the banks.

A few years ago, the Fed (United States Federal Reserve) caught onto the scheme. A November 2009 Fed ruling was put into effect in the summer of 2010 to help protect consumers against overdraft protection programs. Here are the 3 key points on the Federal Reserve ruling on overdraft fees:

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1. The ruling affects the way in which banks can sign people up for overdraft protection programs:

Before the ruling took effect, new bank customers signing up for a checking account had to effectively raise their hand and say, “I do NOT want to enroll in your overdraft protection program.” This opt-out strategy meant that most customers – who sometimes were not even adequately made aware that they were even being automatically enrolled in the programs – just allowed themselves to be enrolled.

The trouble is, most customers do not realize that they can be in situations whereby, for example, in a single day of shopping they could make 5, 6, 7 or more charges against a too-low-balance checking account and incur $200 or more in overdraft charges in a single day.

The new Fed ruling forces banks to offer the programs instead as opt-in programs, meaning the customer has to actively show interest in and sign up for the program in order to enroll.

2. Under the new ruling, you cannot be discriminated against if you choose not to join their overdraft protection program:

The new Fed ruling offers other protections, as well. Specifically, a bank is prohibited from penalizing you in any way if you choose not to opt in to the said overdraft protection program.

3. The ruling does not limit banks from charging you overdraft fees:

Despite the needed and very important advances that this Fed ruling represents to bank customers everywhere, it unfortunately does not save a customer who does choose to enroll in the programs a single dime in overdraft fees. Meaning: those customers who want overdraft protection but not all of the crazy fees are back to square one.

Take these 3 key points regarding the Federal Reserve ruling on overdraft fees into account. Then, consider switching banks to one that will never charge you an overdraft fee, even if you overdraw your account.

About the Author: Find a list of no-overdraft-fee banks in your area at:

No Overdraft Fee Banks

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