Return on Investment (ROI) - I don't understand this principle

[ligastar]

I've been looking through some old posts and see ROI discussed and mentioned frequently. I'm not sure if I'm thinking about ROI correctly. Let's take a straight forward example to see if I am: Let's say I play 500 $10 + $1 SNGs and net $850 in profit after these 500 games...do I then divide this net profit amount by the money invested (500 games x $11 per game = $5,500) which, if I'm doing this correctly, comes to an ROI of 15.5% (850 divided by 5500).

Is this how you determine ROI? What is considered a good to very good ROI percentage?

Also, how does ROI differ from hourly rate (if they aren't the same thing...obviously I have questions on this)? Lastly, if they aren't the same how do you compute hourly rate and what is a good to very good hourly rate and which is more important?

During the past year I've played 1,200 SNGs and kept only basic stats (running bankroll total, % in $$$, winning %, % of ITM finishes that are first place, etc.) and from reading posts I see that I need to delve deeper into my statistics (for example, AleoMagus mentioned an interesting stat where he looks at the % of time he makes it ITM when the table becomes 4 man...a sort bubble % I suppose...I really wish I have been keeping track of where I place but I have been treating all OTM finishes the same and not making note of when I finished 4th, 5th, etc.

I'll get off my soapbox now. I'm new to the twoplustwo forums but am so glad too have joined...it is great to find like minded poker players who feel that talking through issues and topics and offering advice and/or listening to criticsm and constructive feedback can serve as a valuable learning tool. In the long run I think the "teacher" and the "pupil" gain from these exchanges.

Thanks in advance for your help as I attempt to glean more meaningful feedback from the statistics I keep.

[eastbay]

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I've been looking through some old posts and see ROI discussed and mentioned frequently. I'm not sure if I'm thinking about ROI correctly. Let's take a straight forward example to see if I am: Let's say I play 500 $10 + $1 SNGs and net $850 in profit after these 500 games...do I then divide this net profit amount by the money invested (500 games x $11 per game = $5,500) which, if I'm doing this correctly, comes to an ROI of 15.5% (850 divided by 5500).


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yep.

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What is considered a good to very good ROI percentage?


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Depends on stakes. At $55 and below, 50% has been achieved. Anything over 25% is pretty good.

At $109 and $215, most get less. I think around 20% is quite good in those games. Don't quote me on that.

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Also, how does ROI differ from hourly rate (if they aren't the same thing...obviously I have questions on this)?


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ROI is connected to hourly rate by the average length of the tournament and the buy-in. If you are making 50% ROI on $10 games (for round numbers), you're making $5/game. If a game lasts an hour, you're making $5/hr. $5/hr is the hourly rate. 50% is the ROI.

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Lastly, if they aren't the same how do you compute hourly rate and what is a good to very good hourly rate and which is more important?


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$/hr is ultimately what you're after, right? I can't imagine any reason to think of it in any other way.

eastbay

[ligastar]

eastbay

Your email was very insightful and answered all my questions...thanks a bunch for making these concepts clear to me.

BTW...my ROI through those 1,200 games is 16%. I now have a tangible benchmark to compare future performance against.