Required Return Calculator (VND)
If you are building wealth in Vietnam, your goals are usually framed in Vietnamese dong over a fixed horizon: turn the 200.000.000 VND you have today into 1.000.000.000 VND in 15 years for a property deposit, a child's education, or a repatriation fund. The decisive question is rarely which asset to buy first — it is what annual return your portfolio must earn to get there. That number is the required return (or hurdle rate), and this calculator solves for it in one step.
In the example above, the money must grow 5×, which works out to a required return of 11.33%/year sustained for the full 15 years. Knowing this hurdle before you commit money guards against two opposite mistakes: setting a target that demands a return almost no asset class delivers consistently, or being so conservative that you never reach the goal at all. Once you have the hurdle rate, you can hold it against the historical returns of each option available to you in Vietnam — term deposits, bonds, open-ended funds, equities — and see where your goal sits on the risk ladder.
The widget takes your current amount, target amount and number of years, and returns the required annual return, the growth multiple, and the gap versus a conservative 6%/year benchmark. One caveat applies throughout: the 6%/year figure is an illustrative assumption used only as a conservative reference point — it is not a quoted deposit rate or a market return. Real returns on every asset vary and are not guaranteed.
How the required return is computed
Lump-sum case (no contributions)
If you have a single starting amount and leave it to grow, the annual required return is:
r = (Target / Present)^(1 / Years) − 1
| Symbol | Meaning |
|---|---|
| r | Required annual return as a decimal |
| Target | The amount you want at the end |
| Present | The amount you have now |
| Years | The investment horizon |
Verifiable example: (1.000.000.000 / 200.000.000)^(1/15) − 1 = 5^(1/15) − 1 = 11.33%/year. This is simply the future-value formula FV = P × (1 + r)^t solved for r: instead of supplying a rate to find the result, you supply the result you want and back out the rate.
Adding monthly contributions
When you also add a fixed amount every month (PMT), there is no closed-form solution for r. The calculator uses bisection: it guesses a rate, computes the future value of both the lump sum and the contribution stream — P × (1 + r_m)^m + PMT × ((1 + r_m)^m − 1)/r_m × (1 + r_m), where r_m = (1 + r)^(1/12) − 1 is the effective monthly rate — and narrows the search window until the result matches the target. Regular contributions pull the required return down sharply, because part of the target is filled with new cash rather than with investment gains.
Reading the output
- Growth multiple = Target / Present tells you how many times your money must multiply. A bigger multiple or a shorter horizon both push the required return higher.
- Gap to the 6%/year benchmark gives you a feel for how demanding the goal is. If the required return only slightly exceeds 6%, the goal is fairly safe; if it sits well above, you must either accept materially more risk or extend the horizon / add contributions.
What the model leaves out
The model assumes a constant return for the whole horizon and ignores taxes, fees and inflation. In reality annual returns swing widely, especially for equities. Treat the result as the average return you need to average, not a promise — and remember that earning it requires accepting commensurate risk.
Worked example: required return by horizon
Illustrative assumptions: grow 200.000.000 VND into 1.000.000.000 VND (a 5× multiple) using the lump sum only, no contributions. Same destination, but more time means a lower required return:
| Years | Required return / year | Vs 6%/year benchmark |
|---|---|---|
| 5 years | 37.97% | +31.97 pts |
| 10 years | 17.46% | +11.46 pts |
| 15 years | 11.33% | +5.33 pts |
| 20 years | 8.38% | +2.38 pts |
| 25 years | 6.65% | +0.65 pts |
| 30 years | 5.51% | −0.49 pts |
Two things jump out. First, time is the most powerful lever: hitting the same target in 5 years demands 37.97%/year — a return almost nothing in Vietnam delivers consistently — whereas giving yourself 15 years needs only 11.33%/year, and 30 years just 5.51%/year. Second, at the 15-year mark the required return sits 5.33 percentage points above the conservative 6% benchmark: if your money only earned 6%/year, after 15 years 200.000.000 VND would reach just 479.311.639 VND — 520.688.361 VND short of the 1.000.000.000 VND goal.
When you add monthly contributions
If, on top of the 200.000.000 VND starting amount, you also contribute 3.000.000 VND every month for 15 years, you pay in 740.000.000 VND in total. The required return to reach 1.000.000.000 VND then drops to roughly 3.08%/year — below even the 6% reference. This is the clearest illustration of a key principle: contribution discipline can substitute for demanding a high return, and it is usually the lower-risk path to the same destination.
Frequently asked questions
What is a required return?
The required return (or hurdle rate) is the average annual return your investment must earn to turn your current amount into a target amount over a set number of years. Example: turning 200.000.000 VND into 1.000.000.000 VND in 15 years needs 11.33%/year. It is the future-value calculation run in reverse — you fix the destination and solve for the growth rate it implies.
What is the required return formula?
r = (Target / Present)^(1 / Years) − 1. Verifiable: (1.000.000.000 / 200.000.000)^(1/15) − 1 = 5^(1/15) − 1 = 11.33%/year. With monthly contributions there is no closed form, so the tool solves for r by bisection: it adjusts the rate until the future value of the lump sum plus the contribution stream equals your target exactly.
What return turns 200 million into 1 billion VND in 15 years?
The money must grow 5×, which means a required return of 11.33%/year sustained for 15 years (assuming no contributions, taxes or fees). Shorten the horizon to 10 years and it jumps to 17.46%/year; stretch it to 20 years and you need only 8.38%/year. Time is the single biggest lever.
Is my financial goal realistic?
Compare the required return against the historical returns of whatever you plan to invest in. If it only slightly exceeds the conservative 6%/year benchmark, the goal is fairly safe; if it sits far above — a 5-year version of this goal demands 37.97%/year, which almost nothing delivers consistently in Vietnam — extend the horizon or add contributions rather than betting on an unrealistic return.
How do monthly contributions change the required return?
Regular contributions pull the required return down substantially, because part of the target is funded with new cash instead of investment gains. For the same 1.000.000.000 VND goal in 15 years: the lump sum alone needs 11.33%/year, but adding 3.000.000 VND/month (paying in 740.000.000 VND total) drops it to roughly 3.08%/year — below even the 6% reference.
Where does the 6%/year benchmark come from?
It is purely an illustrative assumption used as a conservative reference point so you can gauge how demanding a goal is — it is not a quoted deposit rate or a market return. Real returns on every asset class vary and are not guaranteed. Replace it with a return assumption appropriate to the specific asset you intend to use before making any decision.
How is required return different from CAGR?
Both use the same formula but face opposite directions in time. CAGR looks backward: you already have a start and end value and want the compound growth rate you actually achieved. Required return looks forward: you set a target and back out the growth rate you would need to reach it. FiMo has a dedicated CAGR calculator for the backward-looking question.