Question 1

What is the difference between nominal and real return?

Accepted Answer

Nominal return is the raw percentage your money grew. Real return subtracts the effect of inflation to show how much your purchasing power actually increased. If prices rose 4% and your investment rose 4%, your nominal return is 4% but your real return is roughly zero — you can buy the same amount as before.

Question 2

Why not just subtract inflation from my return?

Accepted Answer

Because returns compound. The precise formula is (1 + nominal) ÷ (1 + inflation) − 1, not nominal − inflation. The shortcut is close for small numbers but drifts as returns and inflation rise. For a 50% nominal return with 10% inflation, the real return is about 36.4%, not 40%.

Calculadora de retorno ajustado pela inflação

Um saldo crescente ainda pode ser uma perda real