Ndubuisi Egwim presents the REST framework for evaluating investments: comparing real return versus risk after accounting for taxes, fees, inflation, and time costs. A property generating $235K gross rental income drops to $132K real return after expenses, a 43% reduction that headline numbers hide.
I use the REST framework without exception every single time. And R from the REST framework is Real Return versus Risk. Because risk and return are two sides of the same coin in my opinion, and for most investors, you cannot evaluate returns without looking at the risk. Not the projected return, not the beautiful pitch deck return, okay? Not— you're looking at— you're actually looking at the real return after tax, after fees, after maintenance, after voids, after inflation, after your own time is costed. Let's say a patient goes and starts planting marijuana on the roof, then you have to ask, does this beat a passive global index fund inside my ISA or my SIP, my pension? Okay, look at Bayer for instance. Gross rental income, $235K. Real return after cost and tax, only $132,000, a 43% reduction even before he gets to the exit, before he sells. Gludia's return, Her real return after fees: $459,000 of growth on her $181K invested. Tax bill: zero. The real return question alone should give any careful investor a reason to pause and consider carefully.
