Does Adding Money Improve Your Return?
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Put $1,000 into a practice portfolio, watch it become $1,100, and the arithmetic is easy. You are up 10%. Now add another $1,000 of your own money. The account says $2,100. Are you up 105%?
Obviously not, and everybody knows that when it is put that plainly. What is much less obvious is that the same mistake, in smaller and subtler forms, is the single most common way people misjudge how their investing is actually going. This guide is about the difference between money you added and money you earned, why the two get confused, and why a simulator has to be deliberately built so they cannot be. Nothing here is financial advice.
Two questions that sound identical
There are two reasonable things you might mean by "how did my investments do this year", and they have different answers.
The first is about your money: how much more of it do you have, counting everything that happened, including the fact that you paid in more in March than in September. The second is about your decisions: how well did the things you picked actually perform, regardless of how much money happened to be riding on them at any given moment.
The finance industry has names for both. The first is usually called a money-weighted return, the second a time-weighted return. You do not need the terminology, but you do need to know that two honest calculations can produce two different numbers for the same account over the same year, and neither is lying.
Why contributions flatter you
The reason this matters is that one of those numbers can be moved without doing anything clever, simply by paying in more.
Imagine two people who both finish the year with $12,000 in an account. The first started with $11,000 and their investments gained $1,000. The second started with $2,000, added $9,500 through the year, and their investments gained $500. The first person is a considerably better investor. The second person has a bigger account. If the only number you look at is the balance, or the change in the balance, you cannot tell them apart.
This is not a hypothetical failure mode. It is the normal experience of anyone paying into an account every month, which is most people. Balances go up steadily, the account feels like it is working, and the part that is genuinely investment performance is invisible underneath the part that is just saving. Saving is good. It is simply not the same skill, and improving at one does not tell you anything about the other.
The correction, in one idea
The fix professionals use is to stop treating a deposit as an event that affects performance at all.
When money arrives, the account gets bigger, but the yardstick you are measuring against gets bigger by exactly the same amount at exactly the same moment. Paying in therefore moves you neither up nor down. Only the market can do that. Withdrawals work identically in reverse. Do this consistently and what is left is a clean record of how the holdings performed, with every contribution and withdrawal filtered out.
That is the whole trick, and it is worth understanding because it explains a number that otherwise looks broken: a fund can report a solid annual return in a year when many of its investors personally lost money, because the investors chose when to pay in and the fund's published figure deliberately ignores timing.
Where the confusion does real damage
Three situations, all common, all worth recognising before they happen to you.
The first is judging a strategy. If you are testing an approach and also adding money while you test it, the rising balance will make almost any approach look sound. You cannot evaluate a strategy against a number that goes up because of your paycheck.
The second is comparing yourself to someone else. Two people quoting their returns may not be quoting the same kind of number, and the one with the larger figure may simply have contributed more, later, into a rising market.
The third is the honest self-assessment that never happens. People who have paid in steadily for years often believe they are good at investing when what they have actually been good at is budgeting. That is a real achievement and a more reliable one, but mistaking it for investing skill leads to taking risks the track record does not support.
What a simulator has to get right
All of which explains a design decision that would otherwise look like a technicality.
CustomBank is connected to two investing simulators from the same studio, CustomStocks and CustomCrypto, and a practice balance can move between them. When it arrives, the receiving portfolio treats it the way the professional calculation does: the balance goes up, and the baseline it is scored against goes up by the same amount at the same time. Moving money across is therefore neutral. It cannot make your practice performance look better or worse, only larger.
If it worked the other way, the whole exercise would be worthless. You could post a spectacular result by moving more money over, which teaches precisely the wrong lesson, and it would be the lesson that transfers most easily to real life, where the same illusion is available and considerably more expensive.
Everything involved is virtual. None of the three is a real financial institution: there is no bank behind CustomBank, no brokerage behind CustomStocks, and no exchange or wallet behind CustomCrypto. No real money enters or leaves any of them, so there is nothing to pay in and nothing to take out, and none of this is financial advice. All three are free on iPhone and Android.
Practice Tip: Before you add anything to a practice portfolio, write down what it is worth. When you add, write down how much. The difference between the ending value and the sum of those two numbers is the only part that belongs to your decisions.
A running total that separates the two
Keeping score properly needs three quantities, not one: what you have put in, what you have taken back out, and what is still working.
CustomBank tracks exactly that across both investing simulators, as a lifetime tally of money sent out, money brought home, and the net position of whatever remains invested. It is deliberately not a percentage. A percentage invites the comparison this whole guide is warning about, whereas three plain figures make the distinction between contribution and performance impossible to lose sight of.
It is also cumulative rather than per-session, which matters more than it sounds. Investing judgement shows up over long stretches and many decisions, and a scorecard that resets hides exactly the pattern worth seeing.
The short version
Money you add is not return. A balance that grows because you funded it and a balance that grows because your holdings gained are different achievements, and only one of them is a statement about your investing.
The professional convention is to neutralise contributions entirely, so paying in moves the total without moving the score. A practice environment that does the same thing is not being pedantic. It is refusing to teach you a flattering habit that would cost you real money later.