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 across any date range you select. 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 = first day with any tracked data (e.g. your first wallet transaction). Latest = today. Apply a date filter to clamp both endpoints to a different window.
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). |
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.
CAGR also shows 0% 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 finds your earliest tracked net worth, your latest net worth, counts the days between them, and works out what yearly rate would have taken you from one to the other.
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 no filter).
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.
Compound it. Divide latest by earliest, raise to the power of (365 / days), subtract 1. Multiply by 100 to get a percentage.
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 6 months of data produces noisy CAGR numbers.
- 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 custom date range. Compare your wealth growth to the market, inflation, or your past self - in one click.
- Automatic CAGR across any date range
- Built-in benchmark comparison against major indices
- Pairs with velocity, momentum, and Sharpe for full trajectory analysis
- Multi-currency wealth handled natively
- Tiny-baseline warnings so you don't fool yourself
- Zero manual calculations - log a transaction, see updated metrics
Read more
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