Nominal value vs. real value
Nominal value is the headline number — the balance shown in your account. Real value is what that balance can actually purchase once you account for rising prices.
Two portfolios can show the same nominal value yet represent very different real wealth, depending on how much prices have risen along the way.
A small rate, a large effect
Inflation compounds, much like investment growth. Even a modest yearly rate steadily reduces purchasing power, and over decades the gap between nominal and real value can grow wide.
Planning with inflation in mind
Long-term plans become more realistic when they account for inflation. Comparing results in today's purchasing power helps you judge whether a strategy is truly growing your wealth or simply keeping pace with rising costs.
Put this into practice.
See inflation in the Compound CalculatorEducational use only
Educational purposes only. Calculator results are estimates based on assumptions and user inputs. They are not financial, investment, legal, or tax advice. Investing involves risk, including possible loss of principal. Past performance does not guarantee future results.