Net Return

Net return is the annualized return rate on a capital deployment, after accounting for any costs or fees associated with the deployment itself (but before subtracting the policy loan rate). The spread is then calculated by subtracting the loan rate from the net return.

For example, if you lend capital via a promissory note at 9% interest and there are no associated costs, your net return is 9%. If the deployment is a real estate project that generates an 11% annual return but has 1.5% in management fees, the net return is 9.5%.

In Policy Stack, the net return is a field you enter on each deployment record based on your actual or projected figures. It is used to:

• Calculate the spread for each deployment
• Feed into the Capital Velocity Calculator
• Populate the Income Stacker projections

Recorded Actual net returns use the visual default. Planned and Projected figures carry an inline source label, and mixed-source comparisons label Actual when needed.

Related terms: Spread, Capital Deployment, Capital Velocity