Inflation-Adjusted Capital Compounding Calculator
An illustrative simulator designed to model the long-term impact of inflation on compounded capital growth. It calculates the future value of investments using user-defined growth rates while concurrently discounting outputs against a specified inflation rate to visualise the real purchasing power of future wealth based strictly on static inputs. Disclaimer
Frequently Asked Questions
What is the difference between Nominal and Real rates of return?
On this site, I model my projections using two different lenses to help me visualize my future:
Nominal Return: This represents the actual cash value I expect to see on a statement. I use this primarily for my Debt and Mortgage simulations, as the principal owed doesn't typically adjust with inflation, only the interest rate does.
Real Return (Inflation-Adjusted): This represents the "buying power" of my money in today’s terms. When I model Income and Portfolio Targets, I find it more helpful to "pre-shrink" the growth rate by an estimated inflation figure. This helps me estimate what that future pot could actually buy in 2040, rather than just looking at a large, potentially misleading nominal number.