Return on investment (ROI) is a measure of how much money you've earned on your initial investment. It can help you understand your profit margin and make informed decisions about future investments. In our lemonade stand example, Ackman calculates that the business will have an ROI of 17% ($170 in net income / $1,000 initial investment).
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If you're new to finance and investing, you might feel overwhelmed by all the jargon and technical terms. However, understanding the basics can help you make informed decisions about your money. In this article, we'll explore the fundamentals of finance and investing using a simple example: a lemonade stand by William Ackman.
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Return on investment (ROI) is a way to measure an investment's performance. It also can be used to compare different investments.
Investors put their money to work. They know that the money they set aside today sets them up for financial freedom.
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