How Much Am I Making? Investment Income Simplified

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Finance Like an Adult

Simple solutions are the best option to solve complex problems. Calculating investment income sounds complicated, but the math is relatively straightforward. Simple tricks on your computer can help you know your unrealized and realized passive investment income in real time.

The Math Is Not That Scary

Calculating investment income is a simple calculation:

The Two Types of Investment Income

Once you know and capture the components of your investment income calculation, you need to know about the two types of investment income:

Takeaway: In 50 Words or Less

Investment income equals the investment’s fair value minus your basis. Depending on your activity, each investment will have a separate basis. The first type of investment income is unrealized, which is generated while you hold the investment. The second is realized income, which is earned when you sell your investment.

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Matt McDonough

Matt McDonough

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Hello! I am a CPA by day, writer by night, and adventurer on the weekends. I’m on the lookout for fun ideas to read, please send anything interesting my way!