Cost Efficiency Explained: How Much of Your Gains Actually Survive?
The One-Sentence Definition
Cost efficiency is the share of your total gain that's left after subtracting fees and taxes, expressed as a percentage. 100% means costs ate nothing; 70% means 30% of your gains went to fees and taxes.
Cost efficiency is calculated automatically in Turbobulls from your transaction history. See it on your dashboard →
The Intuition: What You Keep, Not What You Made
Person A: 95% efficient
Made 10,000 in gains. Paid 300 in fees and 200 in taxes. Kept 9,500. Cost efficiency = 95%. Almost nothing leaked away.Person B: 65% efficient
Same 10,000 of gains, but paid 1,200 in commissions (frequent trader) and 2,300 in short-term capital gains tax. Kept 6,500. Cost efficiency = 65%. A third of every gain disappears.The difference compounds. Over 20 years, the cost-efficient investor has dramatically more wealth even with identical gross returns.
What the Portfolio Badge Means
Inside Turbobulls, every metric carries a small scope badge that tells you what data feeds it. Cost efficiency carries the Portfolio badge.
That means it looks at your investment activity only:
- All capital gains (realized + unrealized)
- All currency gains (FX effects)
- All income (dividends, interest)
- Minus all fees and taxes
It deliberately ignores wallet cash, debt, and anything outside your tracked investing activity.
How to Read the Number
| Cost efficiency | What it typically means |
|---|---|
| 90% - 100% | Excellent. Low fees, tax-efficient holdings. Most index investors and buy-and-hold strategies land here. |
| 75% - 90% | Good. Some friction from active trading, but not destructive. |
| 50% - 75% | Worth investigating. Active trading, high broker commissions, or short-term gains taxes are dragging you. |
| < 50% | Costs are eating you. Half or more of your gross gains are disappearing to fees and taxes. |
| 100% (no gain) | Default value when you have no gains yet. Not meaningful until you've made profit. |
Stop Letting Costs Quietly Eat Your Returns
Why Costs Matter More Than You Think
Costs feel small per trade. A 0.1% commission feels trivial. A 30% tax on a quick win feels like the cost of doing business. But here's the trap: costs come out of gains, not out of total return.
If you make 5% gross and pay 1.5% in costs, you keep 3.5%. That's a 30% drag on your actual return, not 1.5%. Over 30 years, that compounds into roughly 60% less wealth.
How Turbobulls Calculates Cost Efficiency
In plain words: Turbobulls adds up all the wealth you generated from investing, then subtracts all the fees and taxes you paid, and reports the surviving share as a percentage.
cost efficiency = (1 − (fees + taxes) / totalGain) × 100
Find total gain. Realized + unrealized capital gains + currency gains + income (dividends, interest). Everything that grew your wealth from investing.
Find total costs. All fees paid (broker commissions, FX conversion) + all taxes paid (capital gains, dividend withholding).
Compute the ratio. Divide total costs by total gain - this is the percentage of gains lost to friction.
Convert to surviving share. Subtract from 100% to get the cost efficiency.
When Cost Efficiency Matters - and When to Ignore It
- Evaluating active vs passive. Active trading typically tanks this score - is the alpha worth the friction?
- Choosing tax strategies. Long-term vs short-term holds, IRA vs taxable accounts, tax-loss harvesting.
- Comparing brokers. High-commission brokers leave a measurable dent here.
- Long horizons. Cost drag compounds over decades - even small differences matter.
- You're new to tracking. Without meaningful gains yet, the number isn't representative.
- You have negative gains. Defaults to 100% - useless signal.
- Your portfolio is tiny. A few dollars in fees on a small position can look catastrophic.
- You want gross return. Cost efficiency is specifically about net performance.
The Full Picture: Pair Cost Efficiency With These
Cost efficiency tells you what survives. Pair it with these for the full performance picture:
Find Out How Much of Your Gains Actually Survive
Turbobulls computes cost efficiency automatically from every fee and tax you log. Spot high-friction strategies before they cost you years of compounding.
- Automatic cost efficiency across your entire portfolio
- Per-broker breakdown to compare commission impact
- Tracks both broker fees and tax payments per transaction
- Pairs with ROI and Lifetime ROI for gross-vs-net comparisons
- Multi-currency cost tracking (including FX conversion fees)
- Zero manual calculations - log a fee or tax, see updated metrics
Read more
Realized vs Unrealized Gains: The Difference Between Paper Profit and Real Money
Realized gains are profits locked in by selling. Unrealized gains are paper profits that can vanish. Learn why the distinction matters for taxes, mental accounting, and risk.
Currency Gain Explained: How Much of Your Return Came From FX, Not the Asset?
Currency gain isolates the FX-driven portion of your investment returns. Learn how Turbobulls separates it from capital gain, why it matters for multi-currency investors, and what to do with the insight.
Lifetime ROI Explained: How Has All Your Invested Capital Performed?
Lifetime ROI is the return on all capital you've ever deployed - including positions you've since sold. Learn how Turbobulls calculates it, why it differs from ROI (open), and what it tells you about your full trading history.