Cost Efficiency Explained: How Much of Your Gains Actually Survive?
The One-Sentence Definition
Cost efficiency is the share of your total gain that's left after subtracting fees and taxes, expressed as a percentage. 100% means costs ate nothing; 70% means 30% of your gains went to fees and taxes.
Cost efficiency is calculated automatically in Turbobulls from your transaction history. See it on your dashboard →
The Intuition: What You Keep, Not What You Made
Person A: 95% efficient
Made 10,000 in gains. Paid 300 in fees and 200 in taxes. Kept 9,500. Cost efficiency = 95%. Almost nothing leaked away.Person B: 65% efficient
Same 10,000 of gains, but paid 1,200 in commissions (frequent trader) and 2,300 in short-term capital gains tax. Kept 6,500. Cost efficiency = 65%. A third of every gain disappears.The difference compounds. Over 20 years, the cost-efficient investor has dramatically more wealth even with identical gross returns.
What the Portfolio Badge Means
Inside Turbobulls, every metric carries a small scope badge that tells you what data feeds it. Cost efficiency carries the Portfolio badge.
That means it looks at your investment activity only:
- All capital gains (realized + unrealized)
- All currency gains (FX effects)
- All income (dividends, interest)
- Minus all fees and taxes
It deliberately ignores wallet cash, debt, and anything outside your tracked investing activity.
How to Read the Number
| Cost efficiency | What it typically means |
|---|---|
| 90% - 100% | Excellent. Low fees, tax-efficient holdings. Most index investors and buy-and-hold strategies land here. |
| 75% - 90% | Good. Some friction from active trading, but not destructive. |
| 50% - 75% | Worth investigating. Active trading, high broker commissions, or short-term gains taxes are dragging you. |
| < 50% | Costs are eating you. Half or more of your gross gains are disappearing to fees and taxes. |
| 100% (no gain) | Default value when you have no gains yet. Not meaningful until you've made profit. |
Stop Letting Costs Quietly Eat Your Returns
Why Costs Matter More Than You Think
Costs feel small per trade. A 0.1% commission feels trivial. A 30% tax on a quick win feels like the cost of doing business. But here's the trap: costs come out of gains, not out of total return.
If you make 5% gross and pay 1.5% in costs, you keep 3.5%. That's a 30% drag on your actual return, not 1.5%. Over 30 years, that compounds into roughly 60% less wealth.
How Turbobulls Calculates Cost Efficiency
In plain words: Turbobulls adds up all the wealth you generated from investing, then subtracts all the fees and taxes you paid, and reports the surviving share as a percentage.
cost efficiency = (1 − (fees + taxes) / totalGain) × 100
Find total gain. Realized + unrealized capital gains + currency gains + income (dividends, interest). Everything that grew your wealth from investing.
Find total costs. All fees paid (broker commissions, FX conversion) + all taxes paid (capital gains, dividend withholding).
Compute the ratio. Divide total costs by total gain - this is the percentage of gains lost to friction.
Convert to surviving share. Subtract from 100% to get the cost efficiency.
When Cost Efficiency Matters - and When to Ignore It
- Evaluating active vs passive. Active trading typically tanks this score - is the alpha worth the friction?
- Choosing tax strategies. Long-term vs short-term holds, IRA vs taxable accounts, tax-loss harvesting.
- Comparing brokers. High-commission brokers leave a measurable dent here.
- Long horizons. Cost drag compounds over decades - even small differences matter.
- You're new to tracking. Without meaningful gains yet, the number isn't representative.
- You have negative gains. Defaults to 100% - useless signal.
- Your portfolio is tiny. A few dollars in fees on a small position can look catastrophic.
- You want gross return. Cost efficiency is specifically about net performance.
The Full Picture: Pair Cost Efficiency With These
Cost efficiency tells you what survives. Pair it with these for the full performance picture:
Find Out How Much of Your Gains Actually Survive
Turbobulls computes cost efficiency automatically from every fee and tax you log. Spot high-friction strategies before they cost you years of compounding.
- Automatic cost efficiency across your entire portfolio
- Per-broker breakdown to compare commission impact
- Tracks both broker fees and tax payments per transaction
- Pairs with ROI and Lifetime ROI for gross-vs-net comparisons
- Multi-currency cost tracking (including FX conversion fees)
- Zero manual calculations - log a fee or tax, see updated metrics
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