Minimum acceptable rate of return

Okay kiddo, so imagine you have some money, let's say $10. You want to invest that money somewhere so you can make more money in the future. But how do you decide where to invest it?

Well, one thing you'll want to think about is how much money you want to make. Let's say you decide you want to make at least $2 in profit from your $10 investment. That means you need to earn a 20% rate of return (20% of $10 is $2).

That 20% rate of return is the minimum acceptable rate of return - it's the lowest amount of profit you're willing to accept from your investment. You don't want to invest your money somewhere that won't give you at least a 20% return, because that wouldn't meet your goals.

So you might look at different investment options and see which ones have a good chance of earning you at least 20%. Maybe you find a stock that is expected to go up in value, or a savings account with a high interest rate.

Whatever you choose, just remember that you want to earn enough money to meet your goals - and that means finding an investment with a minimum acceptable rate of return that works for you.