Value after 1st year: $25,000 * 0.80 = $20,000

Tue, 05 May 2026 21:52:13 +0000

Understanding Value Retention After Year 1: How $25,000 Can Grow to $20,000 (80% Retention) When investing, receiving, or managing funds—whether through side income, bonuses, or initial capital—one of the critical concepts to grasp is value retention after the first year. A common observation is: If you start with $25,000 and retain 80% of its value after the first year, what remains is $20,000. But what does this mean, and why does it matter? ### Why Retained Value Matters Imagine launching a small business, receiving performance-based income, or earning bonus revenue: many gain significant early returns. However, sustaining value isn’t just about initial cash—it’s about how much of that capital remains after accounting for growth, reinvestment, expenses, or attrition.