Social return
on an investment is the dollar value you assign to intangible, non-monetary returns. By calculating a social return, you can calculate an investment's true value---often greater or less than its straight income-expenses return on investments (ROI). Social returns on investment calculations are particularly good for small-scale financial decisions you don't generally consider as investments, such as finding a new job or going back to school. Pure cost/benefit analysis does not give these decisions the attention they deserve.
Instructions
1. Establish which non-monetary benefits (or drawbacks) an investment will bring you. If you are looking into investing in hog futures but you keep a kosher kitchen, for example, a negative social return will accompany investing in a meat you personally do not eat for religious reasons.
2. Assign a dollar value to the social returns. This value can be arbitrary because social returns are personal. Basically, ask yourself how much you would pay for the non-monetary benefits, and add this figure to your returns. For example, buying a house near a ski resort can either return standard capital by allowing you to rent it out or speculating on a price rise, or it can carry social capital by encouraging you to go skiing more often because you always have a place to stay. To calculate the true value, assess how much this privilege is worth to you.
3. Add or subtract your dollar values from your standard cost/benefit analysis to come up with the true value of your investment, whether you plan to make a standard investment, charitable donation or career decision.
