Real return calculator.

Real assets (property, infrastructure, commodities, gold) historically provide inflation hedge by maintaining real (inflation-adjusted) value. 100k in real assets returning 4% real over 20 years with 3% inflation: nominal return ~7.12%, ending value 395k nominal but 219k real - real value approximately doubled.

Real return = (1 + nominal return) / (1 + inflation) - 1. 10k at 7% nominal during 4% inflation: real return = 1.07/1.04 - 1 = 2.88%. Less impressive than headline 7%. Real assets matter most when inflation rises - bonds and cash get crushed, real assets often hold value or appreciate.

Real asset categories: (1) Property/REITs - 1-2% real returns long-term. (2) Infrastructure (toll roads, utilities) - 3-5% real returns. (3) Commodities (gold, oil) - inflation hedge, no real return long-term. (4) TIPS (Treasury Inflation-Protected Securities) - exact inflation match plus small real yield. (5) Farmland - 4-6% real returns. Mix in 10-30% portfolio allocation for inflation protection. Don't overweight - real assets often illiquid and underperform during disinflation periods.

Quick example

With initial investment of 100,000 and real annual return of 4% (plus annual inflation of 3% and investment period of 20 years), the result is 219,112.31. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.

Which inputs matter most

You enter Initial Investment, Real Annual Return %, Annual Inflation %, and Investment Period. Not every input has equal weight. Flip one at a time toward extreme values to feel which ones move the needle most for your situation.

What's happening under the hood

Real and nominal compound returns; inflation drag = nominal FV - real FV. The formula is listed in full below. If the number looks off, you can retrace the calculation by hand — that's the point of showing the working.

Where this fits in planning

This is a "what-if" tool, not a forecast. Use it to test ideas before committing: what happens if the rate is 2% lower than hoped, what happens if you add five more years. The value is in the scenarios you run, not the single answer you get from the defaults.

What this doesn't capture

Steady-rate math ignores real-world volatility. Actual returns are lumpy; sequence-of-returns risk matters most in drawdown; fees and taxes drag on compound growth; and behaviour changes in drawdowns can reduce outcomes below the projection. Treat the number as one scenario, not a forecast.