What is the Investment Income to Investment Capital ratio all about?

"If money is your hope for independence you will never have it. The only real security that a man will have in this world is a reserve of knowledge, experience, and ability." - Henry Ford

The key to all investing is risk and return. Taking measured risk is fine only if it gives you what you consider an adequate return.
This ratio is a measure of how much RETURN (Investment Income) you received from your investment capital.
One strategy would be to invest all of your money in a bank and receive a low rate of interest. Investing in other forms of capital is more risky and therefore should give you a greater return.
As a ‘rule of thumb’ compare this ratio to the interest you can get from a bank and then decide if the additional risk is giving you the additional return you think is necessary.

"Most of the important things in the world have been accomplished by people who have kept on trying when there seemed to be no hope at all." - Dale Carnegie

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