Topic: ROI is not Payback Period (Read 899 times)

it was not said by anyone that the ROI % can not be 100%, in the OP, so what i've said still stand

The OP makes a really good point that there's a distinction between what he/she is reading and what the definitions are. ROI is a % of monetary return over investment. The time it takes achieve a target ROI or the time period that one's stated ROI covers is a very different thing. Someone else mentioned the fluctuating price of bitcoin, this puts even more variability around payback period, which supports the need to refer to ROI in the correct financial context.

Then we should forget about 3 month ROI and just write 3 month payback period... or not.
People are using it because it's short. Thanks for clarifying, I actually didn't know what ROI was before coming to this forum.

You can measure ROI every year for each investment, but Payback Period is measured only once for each investment.

i think it's the same man, here we are talking about ROI like you mean it, the difference, is that we only care about 100% ROI, any other percentage is not relevant

ROI is a fragile topic to talk about. The price is the coins keep on fluctuating. Since in short term period , all people care about is Payback period. Payback Period if too long can take up the interest of the investor.

Before I involved in this crytp community, I already knew the meaning of ROI in financial world. Then now I get used to the meaning of ROI here. Why is there huge difference in two different context? I just assume that in crypto world ppl are caring more about payback period! If the period is two long, they maybe never reach the ROI. Coz there are a lot of scams or hacks around crypto world. Besides that, coins' price are volatile. If they can not reach ROI in short term, the volatile price may wipe out all of the returns.

One thing I've noticed on this forum since getting into mining a number of months ago is the pervasive use of ROI (Return on Investment) to incorrectly refer to how much time is needed for mining profit (revenue less expenses) to exceed the original cost of the miner, power supply, and other related start up costs.

People can use words how they like, but in the rest of the financial world ROI is generally defined as annual profit divided by the investment incurred to produce the profit—expressed as a percentage.  For example if I put $1,000 in a savings account at the beginning of the year and I receive a total of $20 in interest by the end of the year, my ROI would be 2% (20/1000).

What people mean most of the time when they use ROI on this board is "Payback Period".  For example, say I bought a used S3 and PS at the beginning of the year for $150 and it took me six months to earn $150 profit from this S3; I would have a 6 month Payback Period for this S3.  If I made $300 in profit for the entire year, I would have a 200% ROI on this S3 (300/150).

I'm not trying to be the acronym police, but I wanted to let you know why other people that are not on this forum might look at you funny when you talk about a 3 month ROI.

Here is one of many sites that will explain the difference in financial performance measures like ROI and Payback Period.

https://www.business-case-analysis.com/return-on-investment.html#compare

BTW: if you are considering making a large investment in a farm vs. some other investment, you should get to know what NPV means and how to calculate it.