Inflation-Adjusted Compounding
I built this simulator to strip away nominal illusions and see what my savings are actually worth in today's real buying power. It doesn't guess where the stock markets are heading; it simply applies a user-defined inflation rate to model the erosion of future capital. 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.