Why Are There Two Returns?
Nominal return is the change in the money value of a portfolio. Real return adjusts for the rise in consumer prices and measures purchasing-power change. If a portfolio rises 20% while prices rise 25%, the account is larger but may buy less.
The Correct Formula
Simply subtracting inflation is only an approximation. A 20% nominal return with 10% inflation produces about 9.1% real return, not 10%.
Which Inflation Index?
US CPI answers a question about US-dollar purchasing power; Turkish CPI answers a question about purchasing power in Türkiye. A personal spending basket can differ from the official index, especially when housing, education or healthcare has a large weight.
Checklist
- Use identical start and end dates for return and inflation
- Show currency effects separately from real return
- Deduct tax and fees before calculating the net nominal result
- Treat CPI-adjusted output as a standardized comparison, not exact personal inflation
How Should You Use the Result?
This analysis is designed to make assumptions visible and reproducible, not to declare one universal winner. Change the amount, start date, currency and contribution frequency in the calculator to see how sensitive the outcome is. Review the worst window as carefully as the best one before making a decision.
A real investment can differ because of execution price, bid-ask spread, commission, tax, product expenses and the data provider's closing-time convention. The figures are therefore a gross historical comparison, not a personal return or a forecast.
