Growth Rate (CAGR) Explained: The One Yearly Number That Summarises Everything
The One-Sentence Definition
CAGR is the single yearly rate of return that would have grown your starting net worth into today's net worth if it applied every year, evenly, with no ups or downs along the way.
CAGR is computed automatically in Turbobulls for any period of a year or more. See it on your dashboard →
The Intuition: Magic Savings Account
The simplest way to picture CAGR: pretend a savings account magically replaced all your investing and saving choices, and just paid you a steady interest rate every year. CAGR is the rate that account would have to pay to land you at exactly your current net worth.
Person A: 700 → 5,742 in 11.5 years
That works out to a 20% yearly rate. A savings account paying 20% interest every year, compounded, would produce the same end result. CAGR = 20%.Person B: 10,000 → 13,840 in 11.5 years
Same time period, very different journey. The equivalent yearly rate is about 3% - similar to a high-yield savings account. CAGR = 3%.CAGR smooths over the volatility and seasonal weirdness into one comparable number.
What the Net Worth Badge Means
Inside Turbobulls, every metric carries a small scope badge that tells you what data feeds it. CAGR carries the Net worth badge.
That means it compares your entire wealth picture at two points in time:
- Wallet cash (all your tracked cash accounts)
- Portfolio market value (open positions at fair value)
- Broker cash (uninvested cash sitting at brokers)
- Minus debt (loans, credit cards, anything you owe)
Earliest = the first day of the period picked at the top of the Overview; pick All and it is your first day with any tracked data (e.g. your first wallet transaction). Latest = the period's last day, usually today.
How to Read the Number
Compare your CAGR to these common reference rates:
| CAGR | What it typically means |
|---|---|
| Negative | Net worth shrinking over time. Worth investigating which part is bleeding. |
| 0% - 3% | Below or around inflation. Wealth is roughly preserving its purchasing power, no more. |
| 3% - 6% | Decent. Better than cash, in line with conservative portfolios. |
| 6% - 10% | Good. Around the long-run stock market average. |
| 10% - 20% | Strong. Either you're investing well, saving aggressively, or both. |
| > 20% | Suspiciously good. Check whether your starting balance was tiny (see the warning below). |
Turbobulls shows the growth rate before inflation. On Turbo Pro, the Overview's net worth card adds the period's change "After inflation", measured against the official price index for your display currency, when your currency has one, so you do not have to compare it with a rule-of-thumb inflation rate. Inflation explained shows how to read it.
Track Your CAGR Across Any Date Range
The Tiny-Baseline Trap
This is the single most important caveat about CAGR. A small starting balance makes CAGR look explosive, even when the absolute gain is modest.
Example: going from 10 to 1,000 over 5 years is a 152% CAGR. That sounds incredible. But you actually only generated 990 of wealth - probably less than your monthly grocery bill. The percentage is huge because the denominator is tiny.
Turbobulls shows N/A when your earliest net worth is zero or negative (debt > assets on day one). The formula is undefined for those cases - you cannot compute a percentage rate of growth from a zero or negative base.
How Turbobulls Calculates CAGR
In plain words: Turbobulls takes your net worth on the first and the last day of the period, counts the days between them, and works out what yearly rate would have taken you from one to the other. Unlike the textbook formula, it does not count money you put in along the way as growth: what you saved, added at brokers or opened new accounts with counts from the day it arrived, so only what your net worth earned on its own makes the rate.
In the app it is in the Overview's All figures card, under Growth, as Growth rate, on every plan, once the period covers a year or more. On the Overview's net worth chart, it is the gap between the two lines, net worth and Money put in, as a yearly rate.
CAGR = (latest / earliest) ^ (365 / days) − 1
Find the earliest net worth. The first sampling point in your selected date range (or your very first tracked day, with All).
Find the latest net worth. The last sampling point in your selected range (usually today).
Count the calendar days. Between the two dates, not trading days. Under 365 days, Turbobulls shows N/A.
Compound it. Divide latest by earliest, raise to the power of (365 / days), subtract 1. Multiply by 100 to get a percentage. With money put in along the way, Turbobulls instead finds the one yearly rate that grows the earliest net worth, and each amount put in from its own day, into exactly the latest net worth: the money-weighted way.
When CAGR Matters - and When to Ignore It
- Comparing to benchmarks. Is your wealth outpacing the S&P? Inflation? A savings account? CAGR is apples-to-apples.
- Long horizons. CAGR is most meaningful over 3+ years of data, where compounding shows up clearly.
- Retirement planning. Knowing your historical CAGR helps project future net worth.
- Comparing time periods. Did your last 5 years compound faster than the 5 before?
- You just started tracking. Under a year of data, a yearly rate is mostly noise, so Turbobulls shows N/A.
- Your starting balance was tiny. A 152% CAGR from 10 to 1,000 sounds great but means nothing.
- You started in the red. CAGR is undefined for zero or negative starting net worth.
- You want a path measure. CAGR ignores volatility - use Sharpe ratio for that.
The Full Picture: Pair CAGR With These
CAGR tells you the smoothed annual rate. Pair it with these for the full trajectory:
One Yearly Rate That Tells the Whole Story
Turbobulls computes your CAGR automatically across your entire history or any period of a year or more. Compare your wealth growth to the market, inflation, or your past self - in one click.
- Automatic CAGR for any period of a year or more
- Built-in benchmark comparison against major indices
- Pairs with velocity, momentum, and Sharpe for full trajectory analysis
- Multi-currency wealth handled natively
- Money you put in kept out, so saving never passes for growth
- Zero manual calculations - log a transaction, see updated metrics
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