Real vs nominal returns, explained
A nominal return ignores inflation. A real return asks what those dollars buy. Using official BLS CPI-U (all items, U.S. city average, not seasonally adjusted), $10,000 in January 2000 had the same purchasing power as $19,961 in Sep 2026 — a 2.00× rise in the price level. From January 1970 the same $10,000 corresponds to $89,138 at that latest CPI month.
Data: U.S. Bureau of Labor Statistics, CPI-U (not seasonally adjusted; a fixed-basket index, not your personal cost of living). Not an official BLS product; not financial advice. Details
The two formulas
The inflation calculator asks the inverse question: what would an earlier amount buy later? That is amount × (CPI later ÷ CPI then). The investment toggle deflates the ending pile back into start-month dollars so you can compare it with the original outlay.
When later monthly contributions are included, each contribution is deflated from the month it was made, then summed. That prevents treating 2024 dollars contributed as if they were 2000 dollars.
Worked examples
| Series | Start | Nominal end value | Nominal CAGR | In start-month dollars | Real CAGR |
|---|---|---|---|---|---|
| Gold | Jan 2000 | $144,542 | 10.5% | $72,413 | 7.7% |
| Gold | Jan 2015 | $32,814 | 10.6% | $22,760 | 7.3% |
| U.S. house prices (FHFA HPI) | Jan 2000 | $32,947 | 4.6% | $16,602 | 1.9% |
| U.S. 3-month Treasury bills (rolled) | Jan 2000 | $17,097 | 2.0% | $8,565 | -0.6% |
Cash under a mattress has a nominal multiple of 1.00× and a real multiple of 1 ÷ the inflation factor. From January 2000 that real multiple is 0.50× — the latest CPI dollars buy less than they did then.
Try the inflation calculator
Convert any amount between two months on the official CPI-U series, or turn on “Adjust for inflation” on an asset calculator or the compare page.