Pre-tax Rate Of Return

You invested in a venture capital fund as a General Partner. You made money. In fact, you tripled your investors' money, net of everything, in 10 years. Nice work. You'll be able to afford the alimony payments easily.

But why the "pre-tax" there? Everyone is taxed, right? Tax is part of the whole equation, isn't it? Well, no, not so much. In fact, half your investors, your limited partners, were university endowments, union pension funds, and a few charities (like The Ford Foundation). Your other half were just individuals who are...taxed like individuals. The foundations and endowments and pension funds pay no tax. So when you want to give a return rate number to your investors, you'll always do it on a pre-tax basis, because many don't pay tax...and if you tried to guess at what everyone's tax rate was, you'd go crazy(er). And your ex already thinks you are, so you don't need to provide her with yet more evidence.

When in doubt, go pre-tax when quoting returns.