Real return
Return after adjusting for inflation. (1 + nominal) ÷ (1 + inflation) − 1.
Where it is explained in full
Inflation: the quiet subtraction. A number that grows can still buy less. Real return is what you earned minus what prices did, and the arithmetic is slightly less obvious than subtraction.
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Words beside it
- After tax return
What you actually keep after the tax on gains, dividends, and interest.
- Cash on cash return
Yearly cash a rental property leaves you divided by the cash you put in.
- Nominal return
Return measured in dollars, before adjusting for inflation.
- Sequence of returns risk
The danger that bad years arrive early in retirement when you are withdrawing.
- Total return
Price change plus dividends or interest.
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