How To Invest Money - Percentage Return Versus Dollar Return

So I guess everybody is waiting to see where do I begin and how do I start. I'm going to go so simple its not funny today! Hopefully you will be educated enough to 'spot out' the people who knows what they are talking about and the other people who THINKS they know what they are talking about in terms of how to invest money!

What is the difference between Percentage Return and Dollar Return? And which one should you care about?

Lets step through an example using stock trading...
You think you are smart and you made $1,000 on a trading a stock over night and you brag about it to your mates because you think you know how to invest money like the pros do! You bought $40,000 worth of stocks and returned a hard cold $1,000 and you are feeling like a hero.

Now, I'm new at investing and have less money than you. I did my research, done my paper trading, followed my plan and invested my $10,000 and it returned $500.

Question is... Who do you think is a smarter investor? and actually made more money?
You'll be surprised that most people think making $1,000 using $40,000 is better than making $500 using $10,000! If this is you, STOP what you are doing and understand this!

1,000/40,000 = 2.5% return
500/10,000 = 5% return (This guy is clearly the HERO)

If you are asking why then you need to read this slower!

If both person had the same amount of money say $40,000.
Person A will return $1,000 which is 2.5% return
Person B will return $2,000 which is 5% return

Just because you have more or less money doesn't make you a zero or a hero! How to invest money begins with getting the most return with the money that you have. Obviously if you have more money (assuming you can get the same return the next time) then you will make more money!

Its that simple. Next time when you are talking to your mates about investing and they say they made $10,000 on one trade. What you should do is ask him how much of his own money did he use to make that $10,000!

Percentage Return is about how much return you get for the money that you put in
Dollar Return is the dollar value you return regardless of how much money you invested

Listen to the people who know how to invest money, don't waste your time with people who are chasing the 'glorious' kill/win so that they can show off.