The One Number Every Investor Must Know—But Rarely Does

We invest, save, and take risks without knowing our required rate of return

- ASHISH KHETAN

Picture this: It's the final overs of a nail-biting IPL match. Team B needs 60 runs from 36 balls. The math is simple—10 runs per over. The strategy is crystal clear: Batsmen know when to swing big, when to rotate the strike, and when to hold their nerve. Every decision is driven by one number: the required run rate.

Now, imagine the same match—same players, same chase—but this time, no one tells them the target. Just go out and bat. Sounds absurd, right?

And yet, that's exactly how most people approach their financial goals. We invest, save, and take risks—all without knowing our own required rate of return (RRR)—the personal target that should guide every financial move we make.

What is the required rate of return? Simply put, RRR is the minimum annual return your investments need to generate to help you meet your life's financial goals—retirement, your child's education, that house you dream of, or even the sabbatical you are planning.

It's not about market predictions or the next hot stock. It's not even about maximizing returns. It's about you. Your income, expenses, liabilities, lifestyle, and aspirations. Your finish line. And the time you have to get there.