I feel it is hard to explain mining operations and investments in general.
Or, maybe it's not?
Invest in a machine. Run it. (Negative cash flow period 0)
Sum of net earnings from pool. (Positive cash flow period 1)
Sum of net earnings from pool. (Positive cash flow period 2)
.
.
.
Sell the rig (Positive cash flow period 12)
Determine the risk you are willing to take aka Discount Rate (%). Obviously, the discount rate for mining is higher than an insured savings account.
Plug the numbers into
http://www.investopedia.com/calculator/netpresentvalue.aspxIs it positive? Invest.
Negative? Do not invest.
Have 10 positive project estimations and only enough money for 1 project? Rank the projects by NPV, pick the first project.
Last year, sometime when Zcash launched, I compared all my investments to find mining was the best NPV, ROI, IRR, BE value then anything I had going on. Stocks, real estate, and flipping houses all stopped. Sold everything and took the risk.
Try running any investment metric on Ethereum. Imagine you invest 20K in rigs with a 90 day break-even (BE). That's $6666.67 dollars per month gross. Hard to imagine other investments that payoff that well, or that fast. Rent a $20,000 home for $6666.67/month?